sv3
As filed with the Securities and Exchange Commission on April 20, 2007
Registration Statement No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DCP MIDSTREAM PARTNERS, LP
DCP MIDSTREAM PARTNERS FINANCE CORP.
(Exact name of registrant as specified in its charter)
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Delaware
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4922
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03-0567133 |
Delaware
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4922
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20-8872324 |
(State or Other Jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer |
Incorporation or Organization)
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Classification Code Number)
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Identification No.) |
370 17th Street, Suite 2775
Denver, Colorado 80202
(303) 633-2900
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Michael S. Richards
General Counsel
370 17th Street, Suite 2775
Denver, Colorado 80202
(303) 633-2900
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copy to:
Douglas E. McWilliams
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, Texas 77002
(713) 758-2222
Approximate date of commencement of proposed sale to the public: From time to time after the
effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective
amendment thereto that shall become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to General
Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Title of each class of |
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Proposed maximum aggregate |
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Amount of |
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securities to be registered |
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offering price |
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registration fee (6) |
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Common Units |
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Debt Securities (1)(2) |
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Guarantees of Debt Securities (2) |
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Total |
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$1,500,000,000 (3)(4)(5) |
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$46,050 |
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(1) |
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If any debt securities are issued at an original issue discount, then the offering price
of such debt securities shall be in such amount as shall result in an aggregate initial
offering price not to exceed $1,500,000,000, less the dollar amount of any registered
securities previously issued. |
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(2) |
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If a series of debt securities is guaranteed, such series will be guaranteed by all
subsidiaries other than minor subsidiaries as such term is interpreted in securities
regulations governing financial reporting for guarantors. Pursuant to Rule 457(n), no separate
fee is payable with respect to the guarantees of the debt securities being registered. |
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(3) |
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Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o).
In no event will the aggregate initial offering price of all securities offered from time to
time pursuant to the prospectus included as a part of this
Registration Statement exceed $1,500,000,000.
To the extent
applicable, the aggregate amount of common units registered is further limited to that which is
permissible under Rule 415 (a)(4) under the Securities Act. Any securities registered hereunder
may be sold separately or as units with other securities registered hereunder. |
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There are being registered hereunder a presently indeterminate number of common units and an
indeterminate principal amount of debt securities. This registration statement also covers an
indeterminate amount of securities as may be issued in exchange for, or upon conversion or
exercise of, as the case may be, the securities registered hereunder. |
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The proposed maximum aggregate offering price for each class of securities to be registered
is not specified pursuant to General Instruction, II.D. of Form S-3. |
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(6) |
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Calculated in accordance with Rule 457(o). |
The following are co-registrants that may guarantee the debt securities:
DCP Midstream Operating, LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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20-3471253 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
DCP Midstream Operating, LP
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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20-3471253 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
DCP Assets Holding GP, LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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20-4625827 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
DCP Assets Holding, LP
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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25-1920235 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
DCP Black Lake Holding, LP
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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20-4744732 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
Associated Louisiana Intrastate Pipe Line, LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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84-1124822 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
DCP Intrastate Pipeline, LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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84-1039750 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
Pelico Pipeline, LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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84-1484856 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
Gas Supply Resources LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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76-0434864 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
GSRI Transportation LLC
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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76-0651473 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
Wilbreeze Pipeline, LP
(Exact Name of Registrant As Specified In Its Charter)
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Delaware
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20-4626508 |
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number) |
The registrants hereby amend this registration statement on such date or dates as may be
necessary to delay its effective date until the registrants 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 Securities and Exchange Commission, acting pursuant to
said Section 8(a), may determine.
Subject to completion, dated April __, 2007
PROSPECTUS
DCP Midstream Partners, LP
DCP Midstream Partners Finance Corp.
Common Units
Debt Securities
We may offer, from time to time, in one or more series:
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common units representing limited partnership interests in DCP Midstream Partners, LP; and |
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debt securities, which may be either senior debt securities or subordinated debt securities. |
DCP Midstream Partners Finance Corp. may act as co-issuer of the debt securities, and all
other direct or indirect subsidiaries of DCP Midstream Partners, LP, other than minor
subsidiaries as such item is interpreted in securities regulations governing financial reporting
for guarantors, may guarantee the debt securities.
The securities we may offer:
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will have a maximum aggregate offering price of $1,500,000,000; |
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will be offered at prices and on terms to be set forth in one or more accompanying
prospectus supplements; and |
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may be offered separately or together, or in separate series. |
Our common units are traded on the New York Stock Exchange under the symbol DPM. We will
provide information in the prospectus supplement for the trading market, if any, for any debt
securities we may offer.
This prospectus provides you with a general description of the securities we may offer. Each
time we offer to sell securities we will provide a prospectus supplement that will contain specific
information about those securities and the terms of that offering. The prospectus supplement also
may add, update or change information contained in this prospectus. This prospectus may be used to
offer and sell securities only if accompanied by a prospectus supplement. You should read this
prospectus and any prospectus supplement carefully before you invest. You should also read the
documents we refer to in the Where You Can Find More Information section of this prospectus for
information on us and our financial statements.
Limited partnerships are inherently different than corporations. You should carefully
consider each of the factors described under Risk Factors beginning on page II-1 of this prospectus
before you make an investment in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2007
TABLE OF CONTENTS
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2 |
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3 |
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II-1 |
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II-1 |
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II-12 |
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II-13 |
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II-19 |
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II-22 |
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II-23 |
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II-24 |
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II-25 |
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II-26 |
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II-27 |
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II-28 |
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II-30 |
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II-30 |
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II-31 |
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II-31 |
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II-32 |
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II-32 |
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II-32 |
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II-33 |
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II-33 |
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II-33 |
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II-34 |
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II-34 |
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II-34 |
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II-35 |
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II-35 |
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II-36 |
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II-36 |
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II-37 |
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II-37 |
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II-38 |
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II-39 |
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II-40 |
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II-41 |
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II-42 |
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II-42 |
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II-49 |
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II-49 |
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II-49 |
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II-50 |
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II-50 |
i
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized any other person to provide you with different information. You
should not assume that the information incorporated by reference or provided in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
ii
GUIDE TO READING THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission, or SEC, utilizing a shelf registration process or continuous
offering process. Under this shelf registration process, we may, from time to time, sell up to
$1,500,000,000 of the securities described in this prospectus in one or more offerings. Each
time we offer securities, we will provide you with this prospectus and a prospectus supplement that
will describe, among other things, the specific amounts and prices of the securities being offered
and the terms of the offering, including, in the case of debt securities, the specific terms of the
securities.
That prospectus supplement may include additional risk factors or other special considerations
applicable to those securities and may also add, update, or change information in this prospectus.
If there is any inconsistency between the information in this prospectus and any prospectus
supplement, you should rely on the information in that prospectus supplement.
Throughout this prospectus, when we use the terms we, us, or DCP, we are referring
either to DCP Midstream Partners, LP, the registrant itself, or to DCP Midstream Partners, LP and
its operating subsidiaries collectively, as the context requires. References in this prospectus to
our general partner refer to DCP Midstream GP, LP and/or DCP Midstream GP, LLC, the general
partner of DCP Midstream GP, LP, as appropriate.
WHERE YOU CAN FIND MORE INFORMATION
We incorporate by reference information into this prospectus, which means that we disclose
important information to you by referring you to another document filed separately with the SEC.
The information incorporated by reference is deemed to be part of this prospectus, except for any
information superseded by information contained expressly in this prospectus, and the information
we file later with the SEC will automatically supersede this information. You should not assume
that the information in this prospectus is current as of any date other than the date on the front
page of this prospectus.
Any information that we file under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus, and that is deemed filed, with the SEC
will automatically update and supersede this information. We incorporate by reference:
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Our Annual Report on Form 10-K for the year ended December 31, 2006; |
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Our Current Report on Form 8-K filed April 20, 2007; and |
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The description of our common units contained in our registration statement on Form
8-A filed on November 18, 2005, and any subsequent amendment or report filed for the
purpose of updating such description. |
You may request a copy of any document incorporated by reference in this prospectus and any
exhibit specifically incorporated by reference in those documents, at no cost, by writing or
telephoning us at the following address or phone number:
DCP Midstream Partners, LP
Secretary
370 17th Street, Suite 2775
Denver, Colorado
(303) 633-2900
Additionally, you may read and copy any documents filed by us at the SECs public
reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are
also available to the public from commercial document retrieval services and at the SECs web site
at http://www.sec.gov.
We also make available free of charge on our internet website at http://www.dcppartners.com
our annual reports on Form 10-K and our quarterly reports on Form 10-Q, and any amendments to those
reports, as soon as reasonably practicable after we electronically file such material with the SEC.
Information contained on our website is not
incorporated by reference into this prospectus and you should not consider information
contained on our website as part of this prospectus.
1
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus and our reports, filings and other public
announcements may from time to time contain statements that do not directly or exclusively relate
to historical facts. Such statements are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. You can typically identify forward-looking
statements by the use of forward-looking words, such as may, could, project, believe,
anticipate, expect, estimate, potential, plan, forecast and other similar words.
All statements that are not statements of historical facts, including statements regarding our
future financial position, business strategy, budgets, projected costs and plans and objectives of
management for future operations, are forward-looking statements.
These forward-looking statements reflect our intentions, plans, expectations, assumptions and
beliefs about future events and are subject to risks, uncertainties and other factors, many of
which are outside our control. Important factors that could cause actual results to differ
materially from the expectations expressed or implied in the forward-looking statements include
known and unknown risks. Known risks and uncertainties include, but are not limited to, the risks
set forth under Risk Factors beginning on page 5 as well as the following risks and
uncertainties:
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the level and success of natural gas drilling around our assets, and our ability to
connect supplies to our gathering and processing systems in light of competition; |
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our ability to grow through acquisitions, contributions from our parents, or organic
growth projects, and the successful integration and future performance of such assets; |
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our ability to access the debt and equity markets, which will depend on general market
conditions, interest rates and our ability to effectively hedge such rates with derivative
financial instruments to limit a portion of the adverse effects of potential changes in
interest rates, and the credit ratings for our debt obligations; |
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the extent of changes in commodity prices, our ability to effectively hedge to limit a
portion of the adverse impact of potential changes in prices through derivative financial
instruments, and the potential impact of price on natural gas drilling, demand for our
services, and the volume of NGLs and condensate extracted; |
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our ability to purchase propane from our principal suppliers for our wholesale propane
logistics business; |
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our ability to construct facilities in a timely fashion, which is partially dependent on
obtaining required building, environmental and other permits issued by federal, state and
municipal governments, or agencies thereof, the availability of specialized contractors and
laborers, and the price of and demand for supplies; |
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the creditworthiness of counterparties to our transactions; |
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weather and other natural phenomena, including their potential impact on demand for the
commodities we sell and our and third-party-owned infrastructure; |
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changes in laws and regulations, particularly with regard to taxes, safety and
protection of the environment or the increased regulation of our industry; |
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industry changes, including the impact of consolidations, alternative energy sources,
technological advances and changes in competition; |
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the amount of collateral required to be posted from time to time in our transactions; and |
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general economic, market and business conditions. |
In light of these risks, uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a different extent or at a different
time than we have described. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
2
DCP MIDSTREAM PARTNERS, LP
Overview
We are a Delaware limited partnership formed by DCP Midstream, LLC (formerly known as Duke
Energy Field Services, LLC) to own, operate, acquire and develop a diversified portfolio of
complementary midstream energy assets. We are currently engaged in the business of gathering,
compressing, treating, processing, transporting and selling natural gas, the business of producing,
transporting and selling propane and other natural gas liquids, or NGLs, and the business of
storing propane. Supported by our relationship with DCP Midstream, LLC and its parents, Spectra
Energy Corp (the natural gas business which was spun off from Duke Energy Corporation, or Duke
Energy, effective January 2, 2007), which we refer to as Spectra Energy, and ConocoPhillips, we
intend to acquire and construct additional assets and we have a management team dedicated to
executing our growth strategy.
Our operations are organized into three business segments, Natural Gas Services, Wholesale
Propane Logistics and NGL Logistics.
Our Natural Gas Services segment is comprised of our North Louisiana system, which is an
integrated pipeline system located in northern Louisiana and southern Arkansas that gathers,
compresses, treats, processes, transports and sells natural gas, and that sells NGLs. This system
consists of the following:
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the Minden processing plant and gathering system, which includes a cryogenic natural gas
processing plant supplied by approximately 700 miles of natural gas gathering pipelines,
connected to approximately 460 receipt points, with throughput and processing capacity of
approximately 115 million cubic feet per day, or MMcf/d; |
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the Ada processing plant and gathering system, which includes a refrigeration natural
gas processing plant supplied by approximately 130 miles of natural gas gathering
pipelines, connected to approximately 210 receipt points, with throughput capacity of
approximately 80 MMcf/d; and |
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the Pelico Pipeline, LLC system, or Pelico system, an approximately 600-mile intrastate
natural gas gathering and transportation pipeline with throughput capacity of approximately
250 MMcf/d and connections to the Minden and Ada processing plants and approximately 450
other receipt points. The Pelico system delivers natural gas to multiple interstate and
intrastate pipelines, as well as directly to industrial and utility end-use markets. |
Our Wholesale Propane Logistics segment, which we acquired in November 2006, consists of the
following:
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six owned propane rail terminals located in the Midwest and northeastern United States,
with aggregate storage capacity of 25 thousand barrels, or MBbls; |
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one leased propane marine terminal located in Providence, Rhode Island, with storage
capacity of 450 MBbls; |
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one propane pipeline terminal that is under construction in Midland, Pennsylvania; and |
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access to several open access pipeline terminals. |
Our NGL Logistics segment consists of the following:
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our Seabreeze pipeline, an approximately 68-mile intrastate NGL pipeline in Texas with
throughput capacity of 33 thousand barrels per day, or MBbls/d; |
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our Wilbreeze pipeline, the construction of which was completed in December 2006, an
approximately 39-mile intrastate NGL pipeline in Texas, which connects a DCP Midstream, LLC
gas processing plant to the Seabreeze pipeline with throughput capacity of 11 MBbls/d; and |
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our 45% interest in the Black Lake Pipe Line Company, or Black Lake, the owner of an
approximately 317-mile interstate NGL pipeline in Louisiana and Texas with throughput
capacity of 40 MBbls/d. |
3
Partnership Structure and Management
Our operations are conducted through, and our operating assets are owned by, our subsidiaries.
We own our interests in our subsidiaries through our 100% ownership interest in our operating
partnership, DCP Midstream Operating, LP. DCP Midstream GP, LLC is the general partner of our
general partner, DCP Midstream GP, LP, and has sole responsibility for conducting our business and
managing our operations. DCP Midstream Partners Finance Corp., our wholly-owned subsidiary, has no
material assets or any liabilities other than as a co-issuer of our debt securities. Its
activities will be limited to co-issuing our debt securities and engaging in other activities
incidental thereto.
Our principal executive office is located at 370 17th Street, Suite 2775, Denver, Colorado
80202. Our telephone number is (303) 633-2900. Our common units are traded on the New York Stock
Exchange under the symbol DPM.
4
RISK FACTORS
Limited partner interests are inherently different from capital stock of a corporation,
although many of the business risks to which we are subject are similar to those that would be
faced by a corporation engaged in similar businesses. Before you invest in our securities, you
should carefully consider the following risk factors as well as those contained in our most recent
Annual Report on Form 10-K that is incorporated by reference herein and those that may be included
in any applicable prospectus supplement, together with all of the other information included in
this prospectus, any prospectus supplement and any other documents we incorporate by reference.
If any of the following risks were actually to occur, our business, financial condition or
results of operations could be materially adversely affected. In that case, we might not be able to
pay the minimum quarterly distribution on our common units, the trading price of our common units
could decline and you could lose all or part of your investment.
Risks Related to Our Business
We may not have sufficient cash from operations following the establishment of cash reserves and
payment of fees and expenses, including cost reimbursements to our general partner, to enable
us to make cash distributions to holders of our common units and subordinated units at the
initial distribution rate under our cash distribution policy.
In order to make our cash distributions at our minimum distribution rate of $0.35 per common
unit per quarter, or $1.40 per unit per year, we require available cash of approximately $6.3
million per quarter, or $25.3 million per year, based on the common units, Class C units and
subordinated units currently outstanding. We may not have sufficient available cash from operating
surplus each quarter to enable us to make cash distributions at the minimum distribution rate under
our cash distribution policy. The amount of cash we can distribute on our units principally depends
upon the amount of cash we generate from our operations, which will fluctuate from quarter to
quarter based on, among other things:
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the fees we charge and the margins we realize for our services; |
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the prices of, level of production of, and demand for, natural gas, propane, condensate and NGLs; |
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the volume of natural gas we gather, treat, compress, process, transport and sell,
the volume of propane and NGLs we transport and sell, and the volumes of propane we
store; |
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the relationship between natural gas and NGL prices; |
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the level of competition from other midstream energy companies; |
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the impact of weather conditions on the demand for natural gas and propane; |
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the level of our operating and maintenance and general and administrative costs; and |
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prevailing economic conditions. |
In addition, the actual amount of cash we will have available for distribution will depend on
other factors, some of which are beyond our control, including:
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the level of capital expenditures we make; |
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the cost and form of payment of acquisitions; |
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our debt service requirements and other liabilities; |
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fluctuations in our working capital needs; |
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our ability to borrow funds and access capital markets; |
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restrictions contained in our debt agreements; and |
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the amount of cash reserves established by our general partner. |
II-1
The amount of cash we have available for distribution to holders of our common units and
subordinated units depends primarily on our cash flow and not solely on profitability.
You should be aware that the amount of cash we have available for distribution depends
primarily upon our cash flow and not solely on profitability, which will be affected by non-cash
items. As a result, we may make cash distributions during periods when we record losses for
financial accounting purposes and may not make cash distributions during periods when we record net
earnings for financial accounting purposes.
Because of the natural decline in production from existing wells, our success depends on our
ability to obtain new sources of supplies of natural gas and NGLs, which are dependent on certain
factors beyond our control. Any decrease in supplies of natural gas or NGLs could adversely affect
our business, operating results and our ability to make cash distributions.
Our gathering and transportation pipeline systems are connected to or dependent on the level
of production from natural gas wells, from which production will naturally decline over time. As a
result, our cash flows associated with these wells will also decline over time. In order to
maintain or increase throughput levels on our gathering and transportation pipeline systems and NGL
pipelines and the asset utilization rates at our natural gas processing plants, we must continually
obtain new supplies. The primary factors affecting our ability to obtain new supplies of natural
gas and NGLs, and to attract new customers to our assets include the level of successful drilling
activity near these systems, and our ability to compete for volumes from successful new wells.
The level of drilling activity is dependent on economic and business factors beyond our
control. The primary factor that impacts drilling decisions is natural gas prices. Currently,
natural gas prices are high in relation to historical prices. For example, the rolling twelve-month
average NYMEX daily settlement price of natural gas futures contracts has increased from $3.22 per
MMBtu as of December 31, 2002 to $7.23 per MMBtu as of December 31, 2006. If the high price for
natural gas were to decline, the level of drilling activity could decrease. A sustained decline in
natural gas prices could result in a decrease in exploration and development activities in the
fields served by our gathering and pipeline transportation systems and our natural gas treating and
processing plants, which would lead to reduced utilization of these assets. Other factors that
impact production decisions include producers capital budgets, the ability of producers to obtain
necessary drilling and other governmental permits, access to drilling rigs and regulatory changes.
Because of these factors, even if new natural gas reserves are discovered in areas served by our
assets, producers may choose not to develop those reserves. If we are not able to obtain new
supplies of natural gas to replace the natural decline in volumes from existing wells due to
reductions in drilling activity or competition, throughput on our pipelines and the utilization
rates of our treating and processing facilities would decline, which could have a material adverse
effect on our business, results of operations, financial condition and ability to make cash
distributions to you.
The cash flow from our Natural Gas Services segment is affected by natural gas, NGL and condensate
prices, and decreases in these prices could adversely affect our ability to make distributions to
holders of our common units and subordinated units.
Our Natural Gas Services segment is affected by the level of natural gas, NGL and condensate
prices. NGL and condensate prices generally fluctuate on a basis that correlates to fluctuations in
crude oil prices. In the past, the prices of natural gas and crude oil have been extremely
volatile, and we expect this volatility to continue. The markets and prices for natural gas, NGLs,
condensate and crude oil depend upon factors beyond our control. These factors include supply of
and demand for these commodities, which fluctuate with changes in market and economic conditions
and other factors, including:
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the impact of weather; |
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the level of domestic and offshore production; |
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the availability of imported natural gas, NGLs and crude oil; |
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actions taken by foreign oil and gas producing nations; |
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the availability of local, intrastate and interstate transportation systems; |
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the availability and marketing of competitive fuels; |
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the impact of energy conservation efforts; and |
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the extent of governmental regulation and taxation. |
Our primary natural gas gathering and processing arrangements that expose us to commodity
price risk are our percentage-of-proceeds arrangements. Under percentage-of-proceeds arrangements,
we generally purchase natural gas from producers for an agreed percentage of the proceeds from the
sale of residue gas and NGLs resulting from our processing activities, and then sell the resulting
residue gas and NGLs at market prices. Under these types of arrangements, our revenues and our cash
flows increase or decrease, whichever is applicable, as the price of natural gas and NGLs
fluctuate. We have hedged a significant portion of our share of anticipated natural gas and NGL
commodity price risk associated with these arrangements through 2010. Additionally, as part of our
gathering operations, we recover and sell condensate. The margins we earn from condensate sales are
directly correlated with crude oil prices. We have hedged a significant portion of our share of
anticipated condensate commodity price risk through 2011.
Our hedging activities may have a material adverse effect on our earnings, profitability, cash
flows and financial condition.
We have hedged a significant portion of our expected natural gas and NGL commodity price risk
relating to our percentage of proceeds gathering and processing contracts through 2010 by entering
into derivative financial instruments relating to the future price of natural gas and crude oil. In
addition, we have hedged a significant portion of our expected condensate commodity price risk
relating to condensate recovered from our gathering operations through 2011, respectively, by
entering into derivative financial instruments relating to the future price of crude oil.
Additionally, we have entered into interest rate swap agreements to hedge a portion of the variable
rate revolving debt under our Credit Agreement to a fixed rate obligation, thereby reducing the
exposure to market rate fluctuations. The intent of these arrangements is to reduce the volatility
in our cash flows resulting from fluctuations in commodity prices and interest rates.
We will continue to evaluate whether to enter into any new hedging arrangements, but there can
be no assurance that we will enter into any new hedging arrangement or that our future hedging
arrangements will be on terms similar to our existing hedging arrangements. Also, we may seek in
the future to further limit our exposure to changes in natural gas, NGL and condensate commodity
prices and interest rates by using financial derivative instruments and other hedging mechanisms
from time to time. To the extent we hedge our commodity price and interest rate risk, we will
forego the benefits we would otherwise experience if commodity prices or interest rates were to
change in our favor.
Despite our hedging program, we remain exposed to risks associated with fluctuations in
commodity prices. The extent of our commodity price risk is related largely to the effectiveness
and scope of our hedging activities. For example, the derivative instruments we utilize are based
on posted market prices, which may differ significantly from the actual natural gas, NGL and
condensate prices that we realize in our operations. Furthermore, we have entered into derivative
transactions related to only a portion of the volume of our expected natural gas supply and
production of NGLs and condensate from our processing plants; as a result, we will continue to have
direct commodity price risk to the unhedged portion. Our actual future production may be
significantly higher or lower than we estimate at the time we entered into the derivative
transactions for that period. If the actual amount is higher than we estimate, we will have greater
commodity price risk than we intended. If the actual amount is lower than the amount that is
subject to our derivative financial instruments, we might be forced to satisfy all or a portion of
our derivative transactions without the benefit of the cash flow from our sale of the underlying
physical commodity, resulting in a reduction of our liquidity.
As a result of these factors, our hedging activities may not be as effective as we intend in
reducing the volatility of our cash flows, and in certain circumstances may actually increase the
volatility of our earnings and cash flows. In addition, even though our management monitors our
hedging activities, these activities can result in substantial losses. Such losses could occur
under various circumstances, including if a counterparty does not perform its
II-3
obligations under the
applicable hedging arrangement, the hedging arrangement is imperfect or ineffective, or our hedging
policies and procedures are not properly followed or do not work as planned. Our earnings and cash
flows could also be subject to increased volatility in the event our derivatives do not continue to
qualify for hedge accounting. Also, to the extent we are unable to obtain, or choose not to seek
hedge accounting in conjunction with any future acquisitions as a result of the type of commodity
risk assumed, or structure of such acquisition, our earnings and cash flows could be subject to
increased volatility. We cannot assure you that the steps we take to monitor our hedging activities
will detect and prevent violations of our risk management policies and procedures, particularly if
deception or other intentional misconduct is involved.
We typically do not obtain independent evaluations of natural gas reserves dedicated to our
gathering and pipeline systems; therefore, volumes of natural gas on our systems in the future
could be less than we anticipate.
We typically do not obtain independent evaluations of natural gas reserves connected to our
systems due to the unwillingness of producers to provide reserve information as well as the cost of
such evaluations. Accordingly, we do not have independent estimates of total reserves dedicated to
our systems or the anticipated life of such reserves. If the total reserves or estimated life of
the reserves connected to our gathering systems is less than we anticipate and we are unable to
secure additional sources of natural gas, then the volumes of natural gas on our systems in the
future could be less than we anticipate. A decline in the volumes of natural gas on our systems
could have a material adverse effect on our business, results of operations, financial condition
and our ability to make cash distributions to you.
We depend on certain natural gas producer customers for a significant portion of our supply of
natural gas and NGLs. The loss of any of these customers could result in a decline in our volumes,
revenues and cash available for distribution.
We rely on certain natural gas producer customers for a significant portion of our natural gas
and NGL supply. Our two largest suppliers for the year ended December 31, 2006, Anadarko Petroleum
Corporation and ConocoPhillips, accounted for approximately 31% and 29%, respectively, of our 2006
natural gas supply in our Natural Gas Services segment. In our NGL Logistics segment, our largest
NGL supplier is DCP Midstream, LLC, who obtains NGLs from various third party producer customers.
While some of these customers are subject to long-term contracts, we may be unable to negotiate
extensions or replacements of these contracts, on favorable terms, if at all. The loss of all or
even a portion of the natural gas and NGL volumes supplied by these customers, as a result of
competition or otherwise, could have a material adverse effect on our business, results of
operations and financial condition, unless we were able to acquire comparable volumes from other
sources.
If we are not able to purchase propane from our principal suppliers, our results of operations in
our wholesale propane logistics business would be adversely affected.
Most of our propane purchases are made under supply contracts that have a term of between one
to five years and provide various pricing formulas. Our primary suppliers of propane collectively
accounted for approximately 48% of the propane volumes we purchased in 2006. In the event that we
are unable to purchase propane from our significant suppliers, our failure to obtain alternate
sources of supply at competitive prices and on a timely basis would hurt our ability to satisfy
customer demand, reduce our revenues and adversely affect our results of operations
We may not be able to grow or effectively manage our growth.
A principal focus of our strategy is to continue to grow the per unit distribution on our
units by expanding our business. Our future growth will depend upon a number of factors, some of
which we can control and some of which we cannot. These factors include our ability to:
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identify businesses engaged in managing, operating or owning pipelines, processing and
storage assets or other midstream assets for acquisitions, joint ventures and construction
projects; |
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consummate accretive acquisitions or joint ventures and complete construction projects; |
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appropriately identify any liabilities associated with any acquired businesses or assets; |
II-4
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integrate any acquired or constructed businesses or assets successfully with our
existing operations and into our operating and financial systems and controls; |
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hire, train and retain qualified personnel to manage and operate our growing business; and |
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obtain required financing for our existing and new operations. |
A deficiency in any of these factors could adversely affect our ability to achieve growth in
the level of our cash flows or realize benefits from acquisitions, joint ventures or construction
projects. In addition, competition from other buyers could reduce our acquisition opportunities or
cause us to pay a higher price than we might otherwise pay. In addition, DCP Midstream, LLC and its
affiliates are not restricted from competing with us. DCP Midstream, LLC and its affiliates may
acquire, construct or dispose of midstream or other assets in the future without any obligation to
offer us the opportunity to purchase or construct those assets.
We may not successfully balance our purchases and sales of natural gas and propane, which would
increase our exposure to commodity price risks.
We purchase from producers and other customers a substantial amount of the natural gas that
flows through our natural gas gathering, processing and transportation systems for resale to third
parties, including natural gas marketers and end-users. In addition, in our wholesale propane
logistics business, we purchase propane from a variety of sources and resell the propane to retail
distributors. We may not be successful in balancing our purchases and sales. A producer or supplier
could fail to deliver contracted volumes or deliver in excess of contracted volumes, or a purchaser
could purchase less than contracted volumes. Any of these actions could cause our purchases and
sales to be unbalanced. While we attempt to balance our purchases and sales, if our purchases and
sales are unbalanced, we will face increased exposure to commodity price risks and could have
increased volatility in our operating income and cash flows.
Our NGL pipelines could be adversely affected by any decrease in NGL prices relative to the price
of natural gas.
The profitability of our NGL pipelines is dependent on the level of production of NGLs from
processing plants connected to our NGL pipelines. When natural gas prices are high relative to NGL
prices, it is less profitable to process natural gas because of the higher value of natural gas
compared to the value of NGLs and because of the increased cost (principally that of natural gas as
a feedstock and fuel) of separating the mixed NGLs from the natural gas. As a result, we may
experience periods in which higher natural gas prices reduce the volume of natural gas processed at
plants connected to our NGL pipelines, which would reduce the volumes and gross margins
attributable to our NGL pipelines.
If third-party pipelines and other facilities interconnected to our natural gas and NGL pipelines
and facilities become unavailable to transport or produce natural gas and NGLs, our revenues and
cash available for distribution could be adversely affected.
We depend upon third party pipelines and other facilities that provide delivery options to and
from our pipelines and facilities for the benefit of our customers. For example, the volumes of
NGLs that are transported on our Seabreeze pipeline and the Black Lake pipeline are dependent upon
a number of processing plants and NGL pipelines owned and operated by DCP Midstream, LLC and other
third parties, including Williams Markham Gas Plant, Enterprise Products Matagorda Plant, TEPPCO
Partners, L.P.s South Dean NGL pipeline, Regency Intrastate Gas, LLCs Dubach processing plant and
Chesapeake Energy Corporations Black Lake processing plant. In addition, our Pelico pipeline
system is interconnected to several third-party intrastate and interstate pipelines, including
pipelines owned by Southern Natural Gas Company, Texas Gas Transmission, LLC, CenterPoint Energy
Mississippi River Transmission Corporation, Texas Eastern Transmission LP, CenterPoint Energy Gas
Transmission Company, Crosstex LIG, LLC, Gulf South Pipeline Company, Tennessee Natural Gas
Company and Regency Intrastate Gas, LLC. Since we do not own or operate any of these pipelines or
other facilities, their continuing operation is not within our control. If any of these third-party
pipelines and other facilities become unavailable to transport or produce natural gas and NGLs, our
revenues and cash available for distribution could be adversely affected.
II-5
Our wholesale propane logistics business would be adversely affected if service at our terminals
were interrupted.
Historically, a substantial portion of the propane we purchase to support our wholesale
propane logistics business is delivered to us at our rail terminals or is delivered by ship to us
at our leased marine terminal in Providence, Rhode Island. We also rely on shipments of propane
via TEPPCO Partners, LPs pipeline to open access terminals. Any significant interruption in the
service at these terminals would adversely affect our ability to obtain propane, which could reduce
the amount of propane that we distribute, our revenues or cash available for distribution.
Our industry is highly competitive, and increased competitive pressure could adversely affect our
business and operating results.
We compete with similar enterprises in our respective areas of operation. Some of our
competitors are large oil, natural gas and petrochemical companies that have greater financial
resources and access to supplies of natural gas, propane and NGLs than we do. Some of these
competitors may expand or construct gathering, processing and transportation systems that would
create additional competition for the services we provide to our customers. In addition, our
customers who are significant producers of natural gas may develop their own gathering, processing
and transportation systems in lieu of using ours. Likewise, our customers who produce NGLs may
develop their own systems to transport NGLs in lieu of using ours. Additionally, our wholesale
propane distribution customers may develop their own sources of propane supply in lieu of seeking
supplies from us. Our ability to renew or replace existing contracts with our customers at rates
sufficient to maintain current revenues and cash flows could be adversely affected by the
activities of our competitors and our customers. All of these competitive pressures could have a
material adverse effect on our business, results of operations, financial condition and ability to
make cash distributions.
Since weather conditions may adversely affect the overall demand for propane, our wholesale propane
business is vulnerable to, and could be adversely affected by, warm winters.
Weather conditions could have an impact on the demand for wholesale propane because the
end-users of propane depend on propane principally for heating purposes. As a result, warm weather
conditions could adversely impact the demand for and prices of propane. Actual weather conditions
can substantially change from one year to the next. Furthermore, since our wholesale propane
logistics business is located almost solely in the northeast, warmer than normal temperatures in
the northeast can decrease the total volume of propane we sell. Such conditions may also cause
downward pressure on the price of propane, which could result in a lower of cost or market
adjustment to the value of our inventory. Consequently, our operating results may vary due to
actual changes in temperature.
Competition from alternative energy sources and energy efficiency and technological advances may
reduce the demand for propane, which could reduce the volumes of propane that we distribute.
Competition from alternative energy sources, including natural gas and electricity, has been
increasing as a result of reduced regulation of many utilities, including natural gas and
electricity. In addition, propane competes with heating oil primarily in residential applications.
Propane is generally not competitive with natural gas in areas where natural gas pipelines already
exist because natural gas is a less expensive source of energy than propane. The gradual expansion
of natural gas distribution systems and availability of natural gas in the northeast, which has
historically depended upon propane, could reduce the demand for propane, which could adversely
affect the volumes of propane that we distribute. In addition, stricter conservation measures in
the future or technological
advances in heating, conservation, energy generation or other devices could reduce the demand
for propane in the future, which could adversely affect the volumes of propane that we distribute.
A change in the jurisdictional characterization of some of our assets by federal, state or local
regulatory agencies or a change in policy by those agencies may result in increased regulation of
our assets, which may cause our revenues to decline and operating expenses to increase.
II-6
Our natural gas gathering and intrastate transportation operations are generally exempt from
FERC regulation under the NGA, except for Section 311 as discussed below, but FERC regulation still
affects these businesses and the markets for products derived from these businesses. FERCs
policies and practices across the range of its oil and natural gas regulatory activities,
including, for example, its policies on open access transportation, ratemaking, capacity release
and market center promotion, indirectly affect intrastate markets. In recent years, FERC has
pursued pro-competitive policies in its regulation of interstate oil and natural gas pipelines.
However, we cannot assure you that FERC will continue this approach as it considers matters such as
pipeline rates and rules and policies that may affect rights of access to oil and natural gas
transportation capacity. In addition, the distinction between FERC-regulated transmission services
and federally unregulated gathering services has been the subject of regular litigation, so, in
such a circumstance, the classification and regulation of some of our gathering facilities and
intrastate transportation pipelines may be subject to change based on future determinations by FERC
and the courts.
In addition, the rates, terms and conditions of some of the transportation services we provide
on our Pelico pipeline system is subject to FERC regulation under Section 311 of the NGPA. Under
Section 311, rates charged for transportation must be fair and equitable, and amounts collected in
excess of fair and equitable rates are subject to refund with interest. The Pelico system is
currently charging rates for its Section 311 transportation services that were deemed fair and
equitable under a rate settlement with FERC. The Pelico system made a new rate filing on December
1, 2006, that proposed a transportation rate of $0.2617 per MMBtu, and no changes to the terms and
conditions of the Pelico systems Section 311 transportation services. The Black Lake pipeline
system is an interstate transporter of NGLs and is subject to FERC jurisdiction under the
Interstate Commerce Act and the Elkins Act.
Other state and local regulations also affect our business. Our non-proprietary gathering
lines are subject to ratable take and common purchaser statutes in Louisiana. Ratable take statutes
generally require gatherers to take, without undue discrimination, oil or natural gas production
that may be tendered to the gatherer for handling. Similarly, common purchaser statutes generally
require gatherers to purchase without undue discrimination as to source of supply or producer.
These statutes restrict our right as an owner of gathering facilities to decide with whom we
contract to purchase or transport oil or natural gas. Federal law leaves any economic regulation of
natural gas gathering to the states. The states in which we operate have adopted complaint-based
regulation of oil and natural gas gathering activities, which allows oil and natural gas producers
and shippers to file complaints with state regulators in an effort to resolve grievances relating
to oil and natural gas gathering access and rate discrimination. Other state regulations may not
directly regulate our business, but may nonetheless affect the availability of natural gas for
purchase, processing and sale, including state regulation of production rates and maximum daily
production allowable from gas wells. While our proprietary gathering lines currently are subject to
limited state regulation, there is a risk that state laws will be changed, which may give producers
a stronger basis to challenge proprietary status of a line, or the rates, terms and conditions of a
gathering line providing transportation service.
We may incur significant costs and liabilities in the future resulting from a failure to comply
with new or existing environmental regulations or an accidental release of hazardous substances or
hydrocarbons into the environment.
Our operations are subject to stringent and complex federal, state and local environmental
laws and regulations. These include, for example, (1) the federal Clean Air Act and comparable
state laws and regulations that impose obligations related to air emissions; (2) the federal
Resource Conservation and Recovery Act, or RCRA, and comparable state laws that impose requirements
for the discharge of waste from our facilities; and (3) the Comprehensive Environmental Response
Compensation and Liability Act of 1980, or CERCLA, also known as Superfund, and comparable state
laws that regulate the cleanup of hazardous substances that may have been
released at properties currently or previously owned or operated by us or locations to which
we have sent waste for disposal. Failure to comply with these laws and regulations or newly adopted
laws or regulations may trigger a variety of administrative, civil and criminal enforcement
measures, including the assessment of monetary penalties, the imposition of remedial requirements,
and the issuance of orders enjoining future operations. Certain environmental regulations,
including CERCLA and analogous state laws and regulations, impose strict, joint and several
liability for costs required to clean up and restore sites where hazardous substances or
hydrocarbons have been disposed or otherwise released. Moreover, it is not uncommon for neighboring
landowners and other third
II-7
parties to file claims for personal injury and property damage allegedly
caused by the release of hazardous substances, hydrocarbons or other waste products into the
environment.
There is inherent risk of the incurrence of environmental costs and liabilities in our
business due to our handling of natural gas and other petroleum products, air emissions related to
our operations, and historical industry operations and waste disposal practices. For example, an
accidental release from one of our facilities could subject us to substantial liabilities arising
from environmental cleanup and restoration costs, claims made by neighboring landowners and other
third parties for personal injury and property damage and fines or penalties for related violations
of environmental laws or regulations. Moreover, the possibility exists that stricter laws,
regulations or enforcement policies could significantly increase our compliance costs and the cost
of any remediation that may become necessary. We may not be able to recover these costs from
insurance or from indemnification from DCP Midstream, LLC.
We may incur significant costs and liabilities resulting from pipeline integrity programs and
related repairs.
Pursuant to the Pipeline Safety Improvement Act of 2002, the United States Department of
Transportation, or DOT, has adopted regulations requiring pipeline operators to develop integrity
management programs for transportation pipelines located where a leak or rupture could do the most
harm in high consequence areas. The regulations require operators to:
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perform ongoing assessments of pipeline integrity; |
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identify and characterize applicable threats to pipeline segments that could impact a
high consequence area; |
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improve data collection, integration and analysis; |
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repair and remediate the pipeline as necessary; and |
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implement preventive and mitigating actions. |
We currently estimate that we will incur costs of approximately $4.1 million between 2007 and
2011 to implement pipeline integrity management program testing along certain segments of our
natural gas and NGL pipelines. This does not include the costs, if any, of any repair, remediation,
preventative or mitigating actions that may be determined to be necessary as a result of the
testing program, which costs could be substantial. While DCP Midstream, LLC has agreed to indemnify
us for our pro rata share of any capital contributions associated with certain repair costs
relating to the Black Lake pipeline resulting from such testing program, the actual costs of making
such repairs, including any lost cash flows resulting from shutting down our pipelines during the
pendency of such repairs, could substantially exceed the amount of such indemnity.
We currently transport all of the NGLs produced at our Minden plant on the Black Lake
pipeline. According, in the event that the Black Lake pipeline becomes inoperable due to any
necessary repairs resulting from our integrity testing program or for any other reason for any
significant period of time, we would need to transport NGLs by other means. The Minden plant has an
existing alternate pipeline connection that would permit the transportation of NGLs to a local
fractionator for processing and distribution with sufficient pipeline takeaway and fractionation
capacity to handle all of the Minden plants NGL production. We do not, however, currently have
commercial arrangements in place with the alternative pipeline. While we believe we could establish
alternate transportation arrangements, there can be no assurance that we will in fact be able to
enter into such arrangements.
Our construction of new assets may not result in revenue increases and is subject to regulatory,
environmental, political, legal and economic risks, which could adversely affect our results of
operations and financial condition.
One of the ways we intend to grow our business is through the construction of new midstream
assets. The construction of additions or modifications to our existing systems or propane
terminals, and the construction of new midstream assets involves numerous regulatory,
environmental, political and legal uncertainties beyond our control and may require the expenditure
of significant amounts of capital. If we undertake these projects, they may not be completed on
schedule or at the budgeted cost, or at all. Moreover, our revenues may not increase immediately
upon
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the expenditure of funds on a particular project. For instance, if we construct a new pipeline
or terminal, the construction may occur over an extended period of time, and we will not receive
any material increases in revenues until the project is completed. Moreover, we may construct
facilities to capture anticipated future growth in production in a region in which such growth does
not materialize. Since we are not engaged in the exploration for and development of natural gas and
oil reserves, we often do not have access to third-party estimates of potential reserves in an area
prior to constructing facilities in such area. To the extent we rely on estimates of future
production in our decision to construct additions to our systems, such estimates may prove to be
inaccurate because there are numerous uncertainties inherent in estimating quantities of future
production. As a result, new facilities may not be able to attract enough throughput to achieve our
expected investment return, which could adversely affect our results of operations and financial
condition. In addition, the construction of additions to our existing gathering, transportation and
propane terminal assets may require us to obtain new rights-of-way prior to constructing new
facilities. We may be unable to obtain such rights-of-way to connect new natural gas supplies to
our existing gathering lines, expand our network of propane terminals, or capitalize on other
attractive expansion opportunities. Additionally, it may become more expensive for us to obtain new
rights-of-way or to renew existing rights-of-way. In addition, the construction of additional
propane terminals may require greater capital investment if the commodity prices of certain
supplies such as steel increase. If the cost of renewing or obtaining new rights-of-way increases,
or the cost of constructing new facilities is impacted by certain commodity prices, our cash flows
could be adversely affected.
If we do not make acquisitions on economically acceptable terms, our future growth will be limited.
Our ability to grow depends, in part, on our ability to make acquisitions that result in an
increase in the cash generated from operations per unit. If we are unable to make these accretive
acquisitions either because we are: (1) unable to identify attractive acquisition candidates or
negotiate acceptable purchase contracts with them; (2) unable to obtain financing for these
acquisitions on economically acceptable terms; or (3) outbid by competitors, then our future growth
and ability to increase distributions will be limited. Furthermore, even if we do make acquisitions
that we believe will be accretive, these acquisitions may nevertheless result in a decrease in the
cash generated from operations per unit. Additionally, net assets contributed by DCP Midstream,
LLC represent a transfer of net assets between entities under common control, and are recognized at
DCP Midstream, LLCs basis in the net assets transferred. The amount of the purchase price in
excess of DCP Midstream, LLCs basis in the net assets, if any, is recognized as a reduction to
partners equity. Contributions from DCP Midstream, LLC may significantly increase our debt to
capitalization ratios.
Any acquisition involves potential risks, including, among other things:
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mistaken assumptions about volumes, revenues and costs, including synergies; |
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an inability to integrate successfully the businesses we acquire; |
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the assumption of unknown liabilities; |
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limitations on rights to indemnity from the seller; |
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mistaken assumptions about the overall costs of equity or debt; |
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the diversion of managements and employees attention from other business concerns; |
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unforeseen difficulties operating in new product areas or new geographic areas; and |
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customer or key employee losses at the acquired businesses. |
If we consummate any future acquisitions, our capitalization and results of operations may
change significantly, and you will not have the opportunity to evaluate the economic, financial and
other relevant information that we will consider in determining the application of these funds and
other resources.
Our acquisition strategy is based, in part, on our expectation of ongoing divestitures of
energy assets by industry participants. A material decrease in such divestitures would limit our
opportunities for future acquisitions and could adversely affect our operations and cash flows
available for distribution to our unitholders.
II-9
We do not own all of the land on which our pipelines, facilities and rail terminals are located,
which could disrupt our operations.
We do not own all of the land on which our pipelines, facilities and rail terminals have been
constructed, and we are therefore subject to the possibility of more onerous terms and/or increased
costs to retain necessary land use if we do not have valid rights of way or if such rights of way
lapse or terminate. We obtain the rights to construct and operate our pipelines, surface sites and
rail terminals on land owned by third parties and governmental agencies for a specific period of
time. Our loss of these rights, through our inability to renew right-of-way contracts or otherwise,
could have a material adverse effect on our business, results of operations and financial condition
and our ability to make cash distributions to you.
Our business involves many hazards and operational risks, some of which may not be fully covered by
insurance. If a significant accident or event occurs that is not fully insured, our operations and
financial results could be adversely affected.
Our operations are subject to many hazards inherent in the gathering, compressing, treating,
processing and transporting of natural gas, propane and NGLs, and the storage of propane,
including:
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damage to pipelines, plants and terminals, related equipment and surrounding properties
caused by hurricanes, tornadoes, floods, fires and other natural disasters and acts of
terrorism; |
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inadvertent damage from construction, farm and utility equipment; |
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leaks of natural gas, propane, NGLs and other hydrocarbons or losses of natural gas,
propane or NGLs as a result of the malfunction of equipment or facilities; |
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contaminants in the pipeline system; |
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fires and explosions; and |
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other hazards that could also result in personal injury and loss of life, pollution and
suspension of operations. |
These risks could result in substantial losses due to personal injury and/or loss of life, severe
damage to and destruction of property and equipment and pollution or other environmental damage and
may result in curtailment or suspension of our related operations. A natural disaster or other
hazard affecting the areas in which we operate could have a material adverse effect on our
operations. We are not fully insured against all risks inherent to our business. In accordance with
typical industry practice, we do not have any property insurance on any of our underground pipeline
systems that would cover damage to the pipelines. We are not insured against all environmental
accidents that might occur, which may include toxic tort claims, other than those considered to be
sudden and accidental. If a significant accident or event occurs that is not fully insured, it
could adversely affect our operations and financial condition. In addition, we may not be able to
maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of
market conditions, premiums and deductibles for certain of our insurance policies have increased
substantially, and could escalate further. In some instances, certain insurance could become
unavailable or available only for reduced amounts of coverage.
Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other
business opportunities.
As of December 7, 2005, we entered into a credit facility, consisting of a $100.1 million
collateralized term loan facility and a $250.0 million revolving credit facility for working
capital and other general partnership purposes. We had outstanding balances of $100.0 million under
the term loan facility and $168.0 million under the revolving credit facility as of December 31,
2006. The term loan facility maximum borrowing is $100.1 million, and once repaid such amount may
not be reborrowed. However, once a portion of the term loan is repaid, the revolving credit
facility will increase ratably. We continue to have the ability to incur additional debt, subject
to limitations in our credit facility. Our level of debt could have important consequences to us,
including the following:
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our ability to obtain additional financing, if necessary, for working capital, capital
expenditures, acquisitions or other purposes may be impaired or such financing may not be
available on favorable terms; |
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we will need a portion of our cash flow to make interest payments on our debt, reducing
the funds that would otherwise be available for operations, future business opportunities
and distributions to unitholders; |
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our debt level will make us more vulnerable to competitive pressures or a downturn in
our business or the economy generally; and |
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our debt level may limit our flexibility in responding to changing business and economic
conditions. |
Our ability to obtain new debt funding or service our existing debt will depend upon, among other
things, our future financial and operating performance, which will be affected by prevailing
economic conditions and financial, business, regulatory and other factors, some of which are beyond
our control. In addition, our ability to service debt under our revolving credit facility will
depend on market interest rates, since we anticipate that the interest rates applicable to our
borrowings will fluctuate with movements in interest rate markets. If our operating results are not
sufficient to service our current or future indebtedness, we will be forced to take actions such as
reducing distributions, reducing or delaying our business activities, acquisitions, investments or
capital expenditures, selling assets, restructuring or refinancing our debt, or seeking additional
equity capital. We may not be able to effect any of these actions on satisfactory terms, or at all.
During 2006 we entered into interest rate swap agreements to hedge the variable interest rate on
$125.0 million of the balance outstanding under our credit agreement.
Restrictions in our credit facility will limit our ability to make distributions to you and may
limit our ability to capitalize on acquisitions and other business opportunities.
Our credit facility contains covenants limiting our ability to make distributions, incur
indebtedness, grant liens, make acquisitions, investments or dispositions and engage in
transactions with affiliates. Furthermore, our credit facility contains covenants requiring us to
maintain certain financial ratios and tests. Any subsequent replacement of our credit facility or
any new indebtedness could have similar or greater restrictions.
Increases in interest rates could adversely impact our unit price and our ability to issue
additional equity to make acquisitions, incur debt or for other purposes.
Interest rates on future credit facilities and debt offerings could be higher than current
levels, causing our financing costs to increase accordingly. As with other yield-oriented
securities, our unit price is impacted by the level of our cash distributions and implied
distribution yield. The distribution yield is often used by investors to compare and rank related
yield-oriented securities for investment decision-making purposes. Therefore, changes in interest
rates, either positive or negative, may affect the yield requirements of investors who invest in
our units, and a rising interest rate environment could have an adverse impact on our unit price
and our ability to issue additional equity to make acquisitions, incur debt or for other purposes.
Due to our lack of industry and geographic diversification, adverse developments in our midstream
operations or operating areas would reduce our ability to make distributions to our unitholders.
We rely on the revenues generated from our midstream energy businesses, and as a result, our
financial condition depends upon prices of, and continued demand for, natural gas, propane,
condensate and NGLs. Due to our lack of diversification in industry type and location, an adverse
development in one of these businesses or operating areas would have a significantly greater impact
on our financial condition and results of operations than if we maintained more diverse assets.
We are exposed to the credit risks of our key producer customers and propane purchasers, and any
material nonpayment or nonperformance by our key producer customers or our propane purchasers could
reduce our ability to make distributions to our unitholders.
We are subject to risks of loss resulting from nonpayment or nonperformance by our producer
customers and propane purchasers. Any material nonpayment or nonperformance by our key producer
customers or our propane purchasers could reduce our ability to make distributions to our
unitholders. Furthermore, some of our producer
II-11
customers or our propane purchasers may be highly
leveraged and subject to their own operating and regulatory risks, which could increase the risk
that they may default on their obligations to us.
Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our
business. Continued hostilities in the Middle East or other sustained military campaigns may
adversely impact our results of operations.
The long-term impact of terrorist attacks, such as the attacks that occurred on September 11,
2001 or the attacks in London, and the threat of future terrorist attacks on our industry in
general, and on us in particular, is not known at this time. Increased security measures taken by
us as a precaution against possible terrorist attacks have resulted in increased costs to our
business. Uncertainty surrounding continued hostilities in the Middle East or other sustained
military campaigns may affect our operations in unpredictable ways, including disruptions of crude
oil supplies, propane shipments or storage facilities, and markets for refined products, and the
possibility that infrastructure facilities could be direct targets of, or indirect casualties of,
an act of terror.
Changes in the insurance markets attributable to terrorist attacks may make certain types of
insurance more difficult for us to obtain. Moreover, the insurance that may be available to us may
be significantly more expensive than our existing insurance coverage. Instability in the financial
markets as a result of terrorism or war could also affect our ability to raise capital.
Risks Related to Debt Securities
We have a holding company structure in which our subsidiaries conduct our operations and own our
operating assets.
We are a holding company, and our subsidiaries conduct all of our operations and own all of
our operating assets. We have no significant assets other than the membership interests and the
other equity interests in our subsidiaries. As a result, our ability to make required payments on
our debt securities depends on the performance of our subsidiaries and their ability to distribute
funds to us. The ability of our subsidiaries to make distributions to us may be restricted by,
among other things, our existing credit facility and applicable state limited liability company and
partnership laws and other laws and regulations. If we are unable to obtain the funds necessary to
pay the principal amount at the maturity of our debt securities, or to repurchase our debt
securities upon an occurrence of a change in control, we may be required to adopt one or more
alternatives, such as a refinancing of our debt securities. We cannot assure you that we would be
able to refinance our debt securities.
We do not have the same flexibility as other types of organizations to accumulate cash which may
limit cash available to service our debt securities or to repay them at maturity.
Subject to the limitations on restricted payments contained in the indenture governing our
debt securities and in our credit facility and other indebtedness, we distribute all of our
available cash each quarter to our limited partners and our general partner. Available cash is
defined in our partnership agreement, and it generally means, for each fiscal quarter, all cash on
hand at the end of the quarter:
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less the amount of cash reserves established by our general partner to: |
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provide for the proper conduct of our business; |
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comply with applicable law, any of our debt instruments or other agreements; or |
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provide funds for distributions to our unitholders and to our general
partner for any one or more of the next four quarters; |
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plus, if our general partner so determines, all or a portion of cash on hand on the
date of determination of available cash for the quarter. |
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As a result, we do not accumulate significant amounts of cash and thus do not have the same
flexibility as corporations or other entities that do not pay dividends or have complete
flexibility regarding the amounts they will distribute to their equity holders. The timing and
amount of our distributions could significantly reduce the cash available to pay the principal,
premium (if any) and interest on our debt securities. The board of directors of our general partner
will determine the amount and timing of such distributions and has broad discretion to establish
and make additions to our reserves or the reserves of our operating subsidiaries as it determines
are necessary or appropriate.
Although our payment obligations to our unitholders will be subordinate to our payment
obligations to holders of our debt securities, the value of our units will decrease in correlation
with decreases in the amount we distribute per unit. Accordingly, if we experience a liquidity
problem in the future, we may not be able to issue equity to recapitalize.
The subsidiary guarantees could be deemed fraudulent conveyances under certain circumstances, and a
court may try to subordinate or void the subsidiary guarantees.
Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a
guarantee can be voided, or claims under a guarantee may be subordinated to all other debts of that
guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced
by its guarantee:
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intended to hinder, delay or defraud any present or future creditor or received less
than reasonably equivalent value or fair consideration for the incurrence of the guarantee; |
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was insolvent or rendered insolvent by reason of such incurrence; |
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was engaged in a business or transaction for which the guarantors remaining assets
constituted unreasonably small capital; or |
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intended to incur, or believed that it would incur, debts beyond its ability to pay
those debts as they mature. |
In addition, any payment by that guarantor under a guarantee could be voided and required to
be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor. The
measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the
law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally,
however, a subsidiary guarantor would be considered insolvent if:
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the sum of its debts, including contingent liabilities, was greater than the fair
saleable value of all of its assets; |
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the present saleable value of its assets was less than the amount that would be required
to pay its probable liability, including contingent liabilities, on existing debts as they
become absolute and mature; or |
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it could not pay its debts as they became due. |
Risks Inherent in an Investment in Our Common Units
DCP Midstream, LLC controls our general partner, which has sole responsibility for conducting our
business and managing our operations. DCP Midstream, LLC has conflicts of interest, which may
permit it to favor its own interests to your detriment.
DCP Midstream, LLC owns and controls our general partner. Some of our general partners
directors, and some of its executive officers, are directors or officers of DCP Midstream, LLC or
its parents. Therefore, conflicts of interest may arise between DCP Midstream, LLC and its
affiliates, including our general partner, on the one hand, and us and our unitholders, on the
other hand. In resolving these conflicts of interest, our general partner may favor its own
interests and the interests of its affiliates over the interests of our unitholders. These
conflicts include, among others, the following situations:
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neither our partnership agreement nor any other agreement requires DCP Midstream, LLC to
pursue a business strategy that favors us. DCP Midstream, LLCs directors and officers have
a fiduciary duty to make these decisions in the best interests of the owners of DCP
Midstream, LLC, which may be contrary to our interests; |
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our general partner is allowed to take into account the interests of parties other than
us, such as DCP Midstream, LLC and its affiliates, in resolving conflicts of interest; |
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DCP Midstream, LLC and its affiliates, including Spectra Energy and ConocoPhillips, are
not limited in their ability to compete with us. Please read DCP Midstream, LLC and its
affiliates are not limited in their ability to compete with us below; |
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our general partner may make a determination to receive a quantity of our Class B units
in exchange for resetting the target distribution levels related to its incentive
distribution rights without the approval of the special committee of our general partner or
our unitholders; |
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some officers of DCP Midstream, LLC who provide services to us also will devote
significant time to the business of DCP Midstream, LLC, and will be compensated by DCP
Midstream, LLC for the services rendered to it; |
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our general partner has limited its liability and reduced its fiduciary duties, and has
also restricted the remedies available to our unitholders for actions that, without the
limitations, might constitute breaches of fiduciary duty; |
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our general partner determines the amount and timing of asset purchases and sales,
borrowings, issuance of additional partnership securities and reserves, each of which can
affect the amount of cash that is distributed to unitholders; |
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our general partner determines the amount and timing of any capital expenditures and
whether a capital expenditure is a maintenance capital expenditure, which reduces operating
surplus, or an expansion capital expenditure, which does not reduce operating surplus. This
determination can affect the amount of cash that is distributed to our unitholders and the
ability of the subordinated units to convert to common units; |
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our general partner determines which costs incurred by it and its affiliates are
reimbursable by us; |
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our partnership agreement does not restrict our general partner from causing us to pay
it or its affiliates for any services rendered to us or entering into additional
contractual arrangements with any of these entities on our behalf; |
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our general partner intends to limit its liability regarding our contractual and other
obligations and, in some circumstances, is entitled to be indemnified by us; |
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our general partner may exercise its limited right to call and purchase common units if
it and its affiliates own more than 80% of the common units; |
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our general partner controls the enforcement of obligations owed to us by our general
partner and its affiliates; and |
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our general partner decides whether to retain separate counsel, accountants or others to
perform services for us. |
DCP Midstream, LLC and its affiliates are not limited in their ability to compete with us, which
could cause conflicts of interest and limit our ability to acquire additional assets or businesses,
which in turn could adversely affect our results of operations and cash available for distribution
to our unitholders.
Neither our partnership agreement nor the Omnibus Agreement, as amended, between us, DCP
Midstream, LLC and others will prohibit DCP Midstream, LLC and its affiliates, including Spectra
Energy and ConocoPhillips, from owning assets or engaging in businesses that compete directly or
indirectly with us. In addition, DCP Midstream, LLC and its affiliates, including Spectra Energy
and ConocoPhillips, may acquire, construct or dispose of additional midstream or other assets in
the future, without any obligation to offer us the opportunity to purchase or construct any of
those assets. Each of these entities is a large, established participant in the midstream energy
business, and
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each has significantly greater resources and experience than we have, which factors
may make it more difficult for us to compete with these entities with respect to commercial
activities as well as for acquisition candidates. As a result, competition from these entities
could adversely impact our results of operations and cash available for distribution.
Cost reimbursements due to our general partner and its affiliates for services provided, which will
be determined by our general partner, will be substantial and will reduce our cash available for
distribution to you.
Pursuant to the Omnibus Agreement, as amended, we entered into with DCP Midstream, LLC, our
general partner and others, DCP Midstream, LLC will receive reimbursement for the payment of
operating expenses related to our operations and for the provision of various general and
administrative services for our benefit. Payments for these services will be substantial and will
reduce the amount of cash available for distribution to unitholders. In addition, under Delaware
partnership law, our general partner has unlimited liability for our obligations, such as our debts
and environmental liabilities, except for our contractual obligations that are expressly made
without recourse to our general partner. To the extent our general partner incurs obligations on
our behalf, we are obligated to reimburse or indemnify it. If we are unable or unwilling to
reimburse or indemnify our general partner, our general partner may take actions to cause us to
make payments of these obligations and liabilities. Any such payments could reduce the amount of
cash otherwise available for distribution to our unitholders.
Our partnership agreement limits our general partners fiduciary duties to holders of our common
units and subordinated units.
Although our general partner has a fiduciary duty to manage us in a manner beneficial to us
and our unitholders, the directors and officers of our general partner have a fiduciary duty to
manage our general partner in a manner beneficial to its owner, DCP Midstream, LLC. Our partnership
agreement contains provisions that reduce the standards to which our general partner would
otherwise be held by state fiduciary duty laws. For example, our partnership agreement permits our
general partner to make a number of decisions either in its individual capacity, as opposed to in
its capacity as our general partner or otherwise free of fiduciary duties to us and our
unitholders. This entitles our general partner to consider only the interests and factors that it
desires, and it has no duty or obligation to
give any consideration to any interest of, or factors affecting, us, our affiliates or any
limited partner. Examples include:
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the exercise of its right to reset the target distribution levels of its incentive
distribution rights at higher levels and receive, in connection with this reset, a
number of Class B units that are convertible at any time following the first
anniversary of the issuance of these Class B units into common units; |
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its limited call right; |
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its voting rights with respect to the units it owns; |
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its registration rights; and |
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its determination whether or not to consent to any merger or consolidation of the
partnership or amendment to the partnership agreement. |
By purchasing a common unit, a common unitholder will agree to become bound by the provisions
in the partnership agreement, including the provisions discussed above.
Our partnership agreement restricts the remedies available to holders of our common units and
subordinated units for actions taken by our general partner that might otherwise constitute
breaches of fiduciary duty.
Our partnership agreement contains provisions that restrict the remedies available to
unitholders for actions taken by our general partner that might otherwise constitute breaches of
fiduciary duty. For example, our partnership agreement:
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provides that our general partner will not have any liability to us or our
unitholders for decisions made in its capacity as a general partner so long as it acted
in good faith, meaning it believed the decision was in the best interests of our
partnership; |
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generally provides that affiliated transactions and resolutions of conflicts of
interest not approved by the special committee of the board of directors of our general
partner and not involving a vote of unitholders must be on terms no less favorable to
us than those generally being provided to or available from unrelated third parties or
must be fair and reasonable to us, as determined by our general partner in good faith
and that, in determining whether a transaction or resolution is fair and reasonable,
our general partner may consider the totality of the relationships between the parties
involved, including other transactions that may be particularly advantageous or
beneficial to us; and |
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provides that our general partner and its officers and directors will not be liable
for monetary damages to us, our limited partners or assignees for any acts or omissions
unless there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that the general partner or those other persons
acted in bad faith or engaged in fraud or willful misconduct or, in the case of a
criminal matter, acted with knowledge that the conduct was criminal. |
Our general partner may elect to cause us to issue Class B units to it in connection with a
resetting of the target distribution levels related to our general partners incentive distribution
rights without the approval of the special committee of our general partner or holders of our
common units and subordinated units. This may result in lower distributions to holders of our
common units in certain situations.
Our general partner has the right, at a time when there are no subordinated units outstanding
and it has received incentive distributions at the highest level to which it is entitled (48%) for
each of the prior four consecutive fiscal quarters, to reset the initial cash target distribution
levels at higher levels based on the distribution at the time of the exercise of the reset
election. Following a reset election by our general partner, the minimum quarterly distribution
amount will be reset to an amount equal to the average cash distribution amount per common unit for
the two fiscal quarters immediately preceding the reset election (such amount is referred to as the
reset minimum quarterly distribution) and the target distribution levels will be reset to
correspondingly higher levels based on percentage increases above the reset minimum quarterly
distribution amount.
In connection with resetting these target distribution levels, our general partner will be
entitled to receive a number of Class B units. The Class B units will be entitled to the same cash
distributions per unit as our common units and will be convertible into an equal number of common
units. The number of Class B units to be issued will be equal to that number of common units whose
aggregate quarterly cash distributions equaled the average of the distributions to our general
partner on the incentive distribution rights in the prior two quarters. We anticipate that our
general partner would exercise this reset right in order to facilitate acquisitions or internal
growth projects that would not be sufficiently accretive to cash distributions per common unit
without such conversion; however, it is possible that our general partner could exercise this reset
election at a time when it is experiencing, or may be expected to experience, declines in the cash
distributions it receives related to its incentive distribution rights and may therefore desire to
be issued our Class B units, which are entitled to receive cash distributions from us on the same
priority as our common units, rather than retain the right to receive incentive distributions based
on the initial target distribution levels. As a result, a reset election may cause our common
unitholders to experience dilution in the amount of cash distributions that they would have
otherwise received had we not issued new Class B units to our general partner in connection with
resetting the target distribution levels related to our general partner incentive distribution
rights.
Holders of our common units have limited voting rights and are not entitled to elect our general
partner or its directors.
Unlike the holders of common stock in a corporation, unitholders have only limited voting
rights on matters affecting our business and, therefore, limited ability to influence managements
decisions regarding our business. Unitholders will not elect our general partner or its board of
directors, and will have no right to elect our general partner or its board of directors on an
annual or other continuing basis. The board of directors of our general partner will be chosen by
the members of our general partner. Furthermore, if the unitholders were dissatisfied with the
performance of our general partner, they will have little ability to remove our general partner. As
a result of these
II-16
limitations, the price at which the common units will trade could be diminished
because of the absence or reduction of a takeover premium in the trading price.
Even if holders of our common units are dissatisfied, they may be unable to remove our general
partner without its consent.
The unitholders may be unable to remove our general partner without its consent because our
general partner and its affiliates own sufficient units to be able to prevent its removal. The vote
of the holders of at least 66 2/3% of all outstanding units voting together as a single class is
required to remove the general partner. As of April 20, 2007, our general partner and its
affiliates owned approximately 41.5% of our aggregate outstanding common, Class C and subordinated
units. Also, if our general partner is removed without cause during the subordination period and
units held by our general partner and its affiliates are not voted in favor of that removal, all
remaining subordinated units will automatically convert into common units and any existing
arrearages on our common units will be extinguished. A removal of our general partner under these
circumstances would adversely affect our common units by prematurely eliminating their distribution
and liquidation preference over our subordinated units, which would otherwise have continued until
we had met certain distribution and performance tests. Cause is narrowly defined to mean that a
court of competent jurisdiction has entered a final, non-appealable judgment finding the general
partner liable for actual fraud or willful or wanton misconduct in its capacity as our general
partner. Cause does not include most cases of charges of poor management of the business, so the
removal of the general partner because of the unitholders dissatisfaction with our general
partners performance in managing our partnership will most likely result in the termination of the
subordination period and conversion of all subordinated units to common units.
Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our
common units.
Unitholders voting rights are further restricted by the partnership agreement provision
providing that any units held by a person that owns 20% or more of any class of units then
outstanding, other than our general partner, its affiliates, their transferees and persons who
acquired such units with the prior approval of the board of directors of our general partner,
cannot vote on any matter. Our partnership agreement also contains provisions limiting the
ability of unitholders to call meetings or to acquire information about our operations, as
well as other provisions limiting the unitholders ability to influence the manner or direction of
management.
Control of our general partner may be transferred to a third party without unitholder consent.
Our general partner may transfer its general partner interest to a third party in a merger or
in a sale of all or substantially all of its assets without the consent of the unitholders.
Furthermore, our partnership agreement does not restrict the ability of the owners of our general
partner from transferring all or a portion of their respective ownership interest in our general
partner to a third party. The new owners of our general partner would then be in a position to
replace the board of directors and officers of the general partner with its own choices and thereby
influence the decisions taken by the board of directors and officers.
We may issue additional units without your approval, which would dilute your existing ownership
interests.
Our partnership agreement does not limit the number of additional limited partner interests
that we may issue at any time without the approval of our unitholders. The issuance by us of
additional common units or other equity securities of equal or senior rank will have the following
effects:
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our unitholders proportionate ownership interest in us will decrease; |
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the amount of cash available for distribution on each unit may decrease; |
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because a lower percentage of total outstanding units will be subordinated units,
the risk that a shortfall in the payment of the minimum quarterly distribution will be
borne by our common unitholders will increase; |
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the ratio of taxable income to distributions may increase; |
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the relative voting strength of each previously outstanding unit may be diminished; and |
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the market price of the common units may decline. |
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Affiliates of our general partner may sell common units in the public or private markets, which
sales could have an adverse impact on the trading price of the common units.
DCP Midstream, LLC and its affiliates hold an aggregate of 7,143 common units, 200,312 Class C
units, and 7,142,857 subordinated units. The Class C units will automatically convert to common
units once the Class C units represent less than 1% of the total outstanding limited partner units.
All of the subordinated units will convert into common units at the end of the subordination
period, as set forth in our partnership agreement, and some may convert earlier. The sale of any of
these units in the public or private markets could have an adverse impact on the price of the
common units or on any trading market that may develop.
Our general partner has a limited call right that may require you to sell your units at an
undesirable time or price.
If at any time our general partner and its affiliates own more than 80% of the common units,
our general partner will have the right, but not the obligation, which it may assign to any of its
affiliates or to us, to acquire all, but not less than all, of the common units held by
unaffiliated persons at a price not less than their then-current market price. As a result, you may
be required to sell your common units at an undesirable time or price and may not receive any
return on your investment. You may also incur a tax liability upon a sale of your units. Our
general partner and its affiliates own less than 1% of our outstanding common units. At the
expiration of the subordination period, assuming no additional issuances of common units, our
general partner and its affiliates will own approximately 43% of our outstanding common units.
The liability of holders of limited partner interests may not be limited if a court finds that
unitholder action constitutes control of our business.
A general partner of a partnership generally has unlimited liability for the obligations of
the partnership, except for those contractual obligations of the partnership that are expressly
made without recourse to the general partner. Our partnership is organized under Delaware law and
we conduct business in a number of other states. The limitations on the liability of holders of
limited partner interests for the obligations of a limited partnership have not been clearly
established in some of the other states in which we do business. Holders of limited partner
interests could be liable for any and all of our obligations as if such holder were a general
partner if:
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a court or government agency determined that we were conducting business in a state
but had not complied with that particular states partnership statute; or |
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the right of holders of limited partner interests to act with other unitholders to
remove or replace the general partner, to approve some amendments to our partnership
agreement or to take other actions under our partnership agreement constitute control
of our business. |
Unitholders may have liability to repay distributions that were wrongfully distributed to them.
Under certain circumstances, unitholders may have to repay amounts wrongfully returned or
distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act,
we may not make a distribution to you if the distribution would cause our liabilities to exceed the
fair value of our assets. Delaware law provides that for a period of three years from the date of
the impermissible distribution, limited partners who received the distribution and who knew at the
time of the distribution that it violated Delaware law will be liable to the limited partnership
for the distribution amount. Substituted limited partners are liable for the obligations of the
assignor to make contributions to the partnership that are known to the substituted limited partner
at the time it became a limited partner and for unknown obligations if the liabilities could be
determined from the partnership agreement. Liabilities to partners on account of their partnership
interest and liabilities that are non-recourse to the partnership are not counted for purposes of
determining whether a distribution is permitted.
II-18
Tax Risks to Common Unitholders
Our tax treatment depends on our status as a partnership for federal income tax purposes, as well
as our not being subject to a material amount of entity-level taxation by individual states. If the
Internal Revenue Service treats us as a corporation or we become subject to a material amount of
entity-level taxation for state tax purposes, it would substantially reduce the amount of cash
available for distribution to our unitholders.
The anticipated after-tax economic benefit of an investment in the common units depends
largely on our being treated as a partnership for federal income tax purposes. We have not
requested, and do not plan to request, a ruling from the Internal Revenue Service, which we refer
to as the IRS, on this or any other tax matter affecting us.
If we were treated as a corporation for federal income tax purposes, we would pay federal
income tax on our taxable income at the corporate tax rate, which is currently a maximum of 35% and
would likely pay state income tax at varying rates. Distributions to the unitholder would generally
be taxed again as corporate distributions, and no income, gains, losses or deductions would flow
through to them. Because a tax would be imposed upon us as a corporation, our cash available for
distribution to the unitholder would be substantially reduced. Therefore, treatment of us as a
corporation would result in a material reduction in the anticipated cash flow and after-tax return
to the unitholders, likely causing a substantial reduction in the value of our common units.
Current law may change so as to cause us to be treated as a corporation for federal income tax
purposes or otherwise subject us to entity-level taxation. In addition, because of widespread state
budget deficits and other reasons, several states are evaluating ways to subject partnerships to
entity-level taxation through the imposition of state income, franchise and other forms of
taxation. For example, beginning in 2008, we will be required to pay Texas franchise tax at a
maximum effective rate of 0.7% of our gross income apportioned to Texas in the prior year.
Imposition of such a tax on us by Texas and, if applicable, by any other state will reduce,
the cash available for distribution to the unitholder. The partnership agreement provides that if a
law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation
as a corporation or otherwise subjects us to entity-level taxation for federal, state or local
income tax purposes, the minimum quarterly distribution amount and the target distribution levels
will be adjusted to reflect the impact of that law on us.
If the IRS contests the federal income tax positions we take, the market for our common units may
be adversely impacted, and the cost of any IRS contest will reduce our cash available for
distribution to our unitholders.
We have not requested a ruling from the IRS with respect to our treatment as a partnership for
federal income tax purposes or any other matter affecting us. Any contest with the IRS may
materially and adversely impact the market for our common units and the price at which they trade.
In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and
our general partner because the costs will reduce our cash available for distribution.
The unitholder may be required to pay taxes on income from us even if the unitholder does not
receive any cash distributions from us.
Because our unitholders will be treated as partners to whom we will allocate taxable income,
which could be different in amount than the cash we distribute, the unitholder will be required to
pay any federal income taxes and, in some cases, state and local income taxes on your share of our
taxable income even if you receive no cash distributions from us. The unitholders may not receive
cash distributions from us equal to their share of our taxable income or even equal to the tax
liability that results from that income.
Tax gain or loss on disposition of common units could be more or less than expected.
If the unitholder sells their common units, they will recognize a gain or loss equal to the
difference between the amount realized and their tax basis in those common units. Because
distributions to the unitholders in excess of the total net taxable income allocated to them for a
common unit decreases their tax basis in that common unit, the amount, if any, of such prior excess
distributions will, in effect, become taxable income to them if the common unit is sold at a price
greater than their tax basis in that common unit, even if the price is less than their original
cost.
II-19
Furthermore, a substantial portion of the amount realized, whether or not representing gain,
may be taxed as ordinary income due to potential recapture items, including depreciation recapture.
In addition, because the amount realized includes a unitholders share of our nonrecourse
liabilities, if the unitholder sells their units, they may incur a tax liability in excess of the
amount of cash they receive from the sale. Please read Material Tax Consequences Disposition of
Common Units Recognition of Gain or Loss for a further discussion of the foregoing.
Tax-exempt entities and foreign persons face unique tax issues from owning common units that may
result in adverse tax consequences to them.
Investment in common units by tax-exempt entities, such as individual retirement accounts
(known as IRAs), other retirement plans and non-U.S. persons raises issues unique to them. For
example, virtually all of our income allocated to organizations that are exempt from federal income
tax, including IRAs and other retirement plans, will be unrelated business taxable income and will
be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the
highest applicable effective tax rate, and non-U.S. persons will be required to file United States
federal tax returns and pay tax on their share of our taxable income. If the unitholder is a
tax-exempt entity or a foreign person, they should consult their tax advisor before investing in
our common units.
We will treat each purchaser of our common units as having the same tax benefits without regard to
the actual common units purchased. The IRS may challenge this treatment, which could adversely
affect the value of the common units.
Because we cannot match transferors and transferees of common units and because of other
reasons, we will adopt depreciation and amortization positions that may not conform to all aspects
of existing Treasury Regulations.
A successful IRS challenge to those positions could adversely affect the amount of tax
benefits available to the unitholder. It also could affect the timing of these tax benefits or the
amount of gain from the sale of common units and could have a negative impact on the value of our
common units or result in audit adjustments to your tax returns. Please read Material Tax
Consequences Tax Consequences of Unit Ownership Section 754 Election for a further discussion
of the effect of the depreciation and amortization positions we adopted.
Unitholders may be subject to state and local taxes and return filing requirements in states where
they do not reside as a result of investing in our units.
In addition to federal income taxes, the unitholder may be subject to other taxes, including
foreign, state and local taxes, unincorporated business taxes and estate, inheritance or intangible
taxes that are imposed by the various jurisdictions in which we conduct business or own property,
even if you do not live in any of those jurisdictions. The unitholder may be required to file
foreign, state and local income tax returns and pay state and local income taxes in some or all of
these jurisdictions. Further, the unitholder may be subject to penalties for failure to comply with
those requirements. We own assets and conduct business in the States of Louisiana, Texas, Arkansas,
New York, Pennsylvania, Ohio, Massachusetts, Vermont, New Hampshire, Rhode Island, Connecticut and
Maine. Each of these states, other than Texas, currently imposes a personal income tax on
individuals. A majority of these states impose an income tax on corporations and other entities.
As we make acquisitions or expand our business, we may own assets or do business in additional
states that impose a personal income tax. It is your responsibility to file all United States
federal, foreign, state and local tax returns. Our counsel has not rendered an opinion on the
foreign, state or local tax consequences of an investment in the common units.
II-20
The sale or exchange of 50% or more of our capital and profits interests during any twelve-month
period will result in the termination of our partnership for federal income tax purposes.
We will be considered to have terminated for federal income tax purposes if there is a sale or
exchange of 50% or more of the total interests in our capital and profits within a twelve-month
period. Our termination would, among other things, result in the closing of our taxable year for
all unitholders and could result in a deferral of depreciation deductions allowable in computing
our taxable income. In the case of a unitholder reporting on a taxable year other than a fiscal
year ending December 31, the closing of our taxable year may result in more than twelve months of
our taxable income or loss being includable in his taxable income for the year of termination. Our
termination currently would not affect our classification as a partnership for federal income tax
purposes, but instead, we would be treated as a new partnership for tax purposes. If treated as a
new partnership, we must make new tax elections and could be subject to penalties if we are unable
to determine that a termination occurred. Please read Material Tax ConsequencesDisposition of
Common UnitsConstructive Termination for a discussion of the consequences of our termination for
federal income tax purposes.
II-21
USE OF PROCEEDS
Unless otherwise indicated to the contrary in an accompanying prospectus supplement, we will
use the net proceeds from the sale of the securities covered by this prospectus for general
partnership purposes, which may include debt repayment, future acquisitions, capital expenditures
and additions to working capital.
II-22
RATIO OF EARNINGS TO FIXED CHARGES
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DCP Midstream Partners, LP |
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Year Ended December 31, |
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2002 |
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2003 |
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2004 |
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2005 |
2006 |
Ration of earnings (loss) to fixed charges |
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152.00 |
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168.00 |
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303.00 |
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32.60 |
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3.56 |
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II-23
DESCRIPTION OF THE COMMON UNITS
The Units
We currently have outstanding common units, subordinated units and Class C units, each of
which are separate classes of limited partner interests in us. The holders of units are entitled to
participate in partnership distributions and exercise the rights or privileges available to limited
partners under our partnership agreement. For a description of the relative rights and preferences
of holders of common units, subordinated units and Class C units in and to partnership
distributions, please read this section and Our Cash Distribution Policy and Restrictions on
Distributions. For a general discussion of the expected federal income tax consequences of owning
and disposing of common units, please read Material Tax Considerations.
Our outstanding common units are listed on the New York Stock Exchange under the symbol DPM.
Any additional common units we issue will also be listed on the New York Stock Exchange.
Subordinated Units
Our subordinated units are a separate class of limited partner interests in our partnership,
and the rights of holders of subordinated units to participate in distributions to partners differ
from, and are subordinated to, the rights of the holders of our common units. During the
subordination period, our subordinated units will not be entitled to receive any distributions
until our common units have received the minimum quarterly distribution plus any arrearages from
prior quarters. The term of the subordination period is described under Our Cash Distribution
Policy and Restrictions on DistributionsSubordination Period.
Class B Units
Our general partner has the right, at a time when there are no subordinated units outstanding
and it has received incentive distributions at the highest level to which it is entitled (48%) for
each of the prior four consecutive fiscal quarters, to reset the initial cash target distribution
levels at higher levels based on the distribution at the time of the exercise of the reset
election. In connection with resetting these target distribution levels, our general partner will
be entitled to receive a number of Class B units. The Class B units will be entitled to the same
cash distributions per unit as our common units and will be convertible into an equal number of
common units. The number of Class B units to be issued will be equal to that number of common units
whose aggregate quarterly cash distributions equaled the average of the distributions to our
general partner on the incentive distribution rights in the prior two quarters. For a more detailed
description of our general partners right to reset the target distribution levels upon which the
incentive distribution payments are based and the concurrent right of our general partner to
receive Class B units in connection with this reset, please read Our Cash Distribution Policy and
Restrictions on Distributions General Partners Rights to Reset Target Distribution Levels.
Class C Units
On November 1, 2006, we issued to DCP LP Holdings, LP, a wholly-owned subsidiary of DCP
Midstream, LLC, 200,312 Class C units as partial consideration for the acquisition of Gas Supply
Resources, LLC, or GSR, by the Partnership. The Class C units have the same liquidation preference,
rights to cash distributions and voting rights as the common units. The Class C units will
automatically convert to common units once the Class C units represent less than 1% of the total
outstanding limited partner units. After two years, if the Class C units are not converted into
common units, either automatically or by common unitholder approval, they will receive 115% of the
distribution amount for common units. The Class C units were issued to DCP LP Holdings, LP in a
private offering conducted in accordance with the exemption from the registration requirements of
the securities laws afforded by Section 4(2) of the Securities Act of 1933, as amended.
Number of Units
As of April 20, 2007, we had outstanding 10,357,143 common units, 7,142,857 subordinated
units, no Class B
units and 200,312 Class C units. There is currently no established public trading market for
our subordinated units or Class C units.
II-24
Voting Rights
The following is a summary of the unitholder vote required for the matters specified below.
Matters requiring the approval of a unit majority require:
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during the subordination period, the approval of a majority of the common units and
Class C units, excluding those common units and Class C units held by our general partner
and its affiliates, and a majority of the subordinated units, voting as separate classes;
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after the subordination period, the approval of a majority of the common units, Class C
units and Class B units, if any, voting as a class. |
In voting their common, Class C, Class B and subordinated units, our general partner and its
affiliates will have no fiduciary duty or obligation whatsoever to us or the limited partners,
including any duty to act in good faith or in the best interests of us or the limited partners.
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Issuance of additional
units
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No approval right. |
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Amendment of the partnership
agreement
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Certain amendments may be made by the general partner
without the approval of the unitholders. Other amendments
generally require the approval of a unit majority. Please
read Amendment of the Partnership Agreement. |
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Merger of our partnership or
the sale of all or
substantially all of our
assets
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Unit majority in certain circumstances. Please read
Merger, Consolidation, Conversion, Sale or Other
Disposition of Assets. |
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Dissolution of our
partnership
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Unit majority. Please read Termination and Dissolution. |
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Continuation of our business
upon dissolution
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Unit majority. Please read Termination and Dissolution. |
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Withdrawal of the general
partner
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Under most circumstances, the approval of a majority of
the common units, excluding common units held by our
general partner and its affiliates, is required for the
withdrawal of our general partner prior to December 31,
2015 in a manner that would cause a dissolution of our
partnership. Please read Withdrawal or Removal of the
General Partner. |
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Removal of the general
partner
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Not less than 66 2/3% of the outstanding units, voting as
a single class, including units held by our general
partner and its affiliates. Please read Withdrawal or
Removal of the General Partner. |
II-25
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Transfer of the general
partner interest
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Our general partner may transfer all, but not less than
all, of its general partner interest in us without a vote
of our unitholders to an affiliate or another person in
connection with its merger or consolidation with or into,
or sale of all or substantially all of its assets, to such
person. The approval of a majority of the common units,
excluding common units held by the general partner and its
affiliates, is required in other circumstances for a
transfer of the general partner interest to a third party
prior to December 31, 2015. See Transfer of General
Partner Units. |
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Transfer of incentive
distribution rights
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Except for transfers to an affiliate or another person as
part of our general partners merger or consolidation,
sale of all or substantially all of its assets or the sale
of all of the ownership interests in such holder, the
approval of a majority of the common units, excluding
common units held by the general partner and its
affiliates, is required in most circumstances for a
transfer of the incentive distribution rights to a third
party prior to December 31, 2015. Please read Transfer
of Incentive Distribution Rights. |
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Transfer of ownership
interests in our general
partner
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No approval required at any time. Please read Transfer
of Ownership Interests in the General Partner. |
Limited Liability
Assuming that a limited partner does not participate in the control of our business within the
meaning of the Delaware Act and that he otherwise acts in conformity with the provisions of the
partnership agreement, his liability under the Delaware Act will be limited, subject to possible
exceptions, to the amount of capital he is obligated to contribute to us for his common units plus
his share of any undistributed profits and assets. If it were determined, however, that the right,
or exercise of the right, by the limited partners as a group:
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to remove or replace the general partner; |
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to approve some amendments to the partnership agreement; or |
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to take other action under the partnership agreement; |
constituted participation in the control of our business for the purposes of the Delaware Act,
then the limited partners could be held personally liable for our obligations under the laws of
Delaware, to the same extent as the general partner. This liability would extend to persons who
transact business with us who reasonably believe that the limited partner is a general partner.
Neither the partnership agreement nor the Delaware Act specifically provides for legal recourse
against the general partner if a limited partner were to lose limited liability through any fault
of the general partner. While this does not mean that a limited partner could not seek legal
recourse, we know of no
precedent for this type of a claim in Delaware case law.
Under the Delaware Act, a limited partnership may not make a distribution to a partner if,
after the distribution, all liabilities of the limited partnership, other than liabilities to
partners on account of their partnership interests and liabilities for which the recourse of
creditors is limited to specific property of the partnership, would exceed the fair
II-26
value of the
assets of the limited partnership. For the purpose of determining the fair value of the assets of a
limited partnership, the Delaware Act provides that the fair value of property subject to liability
for which recourse of creditors is limited shall be included in the assets of the limited
partnership only to the extent that the fair value of that property exceeds the nonrecourse
liability. The Delaware Act provides that a limited partner who receives a distribution and knew at
the time of the distribution that the distribution was in violation of the Delaware Act shall be
liable to the limited partnership for the amount of the distribution for three years. Under the
Delaware Act, a substituted limited partner of a limited partnership is liable for the obligations
of his assignor to make contributions to the partnership, except that such person is not obligated
for liabilities unknown to him at the time he became a limited partner and that could not be
ascertained from the partnership agreement.
Our subsidiaries conduct business in three states and we may have subsidiaries that conduct
business in other states in the future. Maintenance of our limited liability as a limited partner
of the operating partnership may require compliance with legal requirements in the jurisdictions in
which the operating partnership conducts business, including qualifying our subsidiaries to do
business there.
Limitations on the liability of limited partners for the obligations of a limited partner have
not been clearly established in many jurisdictions. If, by virtue of our partnership interest in
our operating partnership or otherwise, it were determined that we were conducting business in any
state without compliance with the applicable limited partnership or limited liability company
statute, or that the right or exercise of the right by the limited partners as a group to remove or
replace the general partner, to approve some amendments to the partnership agreement, or to take
other action under the partnership agreement constituted participation in the control of our
business for purposes of the statutes of any relevant jurisdiction, then the limited partners could
be held personally liable for our obligations under the law of that jurisdiction to the same extent
as the general partner under the circumstances. We will operate in a manner that the general
partner considers reasonable and necessary or appropriate to preserve the limited liability of the
limited partners.
Issuance of Additional Securities
Our partnership agreement authorizes us to issue an unlimited number of additional partnership
securities for the consideration and on the terms and conditions determined by our general partner
without the approval of the unitholders.
It is possible that we will fund acquisitions through the issuance of additional common units,
subordinated units or other partnership securities. Holders of any additional common units we issue
will be entitled to share equally with the then-existing holders of common units in our
distributions of available cash. In addition, the issuance of additional common units or other
partnership securities may dilute the value of the interests of the then-existing holders of common
units in our net assets.
In accordance with Delaware law and the provisions of our partnership agreement, we may also
issue additional partnership securities that, as determined by our general partner, may have
special voting rights to which the common units are not entitled. In addition, our partnership
agreement does not prohibit the issuance by our subsidiaries of equity securities, which may
effectively rank senior to the common units.
Upon issuance of additional partnership securities (other than the issuance of partnership
securities issued in connection with a reset of the incentive distribution target levels relating
to our general partners incentive distribution rights or the issuance of partnership securities
upon conversion of outstanding partnership securities), our general partner will be entitled, but
not required, to make additional capital contributions to the extent necessary to maintain its 2%
general partner interest in us. Our general partners 2% interest in us will be reduced if we issue
additional units in the future and our general partner does not contribute a proportionate amount
of capital to us to
maintain its 2% general partner interest. Moreover, our general partner will have the right,
which it may from time to time assign in whole or in part to any of its affiliates, to purchase
common units, subordinated units or other partnership securities whenever, and on the same terms
that, we issue those securities to persons other than our general partner and its affiliates, to
the extent necessary to maintain the percentage interest of the general partner and its affiliates,
including such interest represented by common units and subordinated units, that existed
immediately prior to each issuance. The holders of common units will not have preemptive rights to
acquire additional common units or other partnership securities.
II-27
Amendment of the Partnership Agreement
General. Amendments to our partnership agreement may be proposed only by or with the consent
of our general partner. However, our general partner will have no duty or obligation to propose any
amendment and may decline to do so free of any fiduciary duty or obligation whatsoever to us or the
limited partners, including any duty to act in good faith or in the best interests of us or the
limited partners. In order to adopt a proposed amendment, other than the amendments discussed
below, our general partner is required to seek written approval of the holders of the number of
units required to approve the amendment or call a meeting of the limited partners to consider and
vote upon the proposed amendment. Except as described below, an amendment must be approved by a
unit majority.
Prohibited Amendments. No amendment may be made that would:
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enlarge the obligations of any limited partner without its consent, unless approved by
at least a majority of the type or class of limited partner interests so affected; or |
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enlarge the obligations of, restrict in any way any action by or rights of, or reduce in
any way the amounts distributable, reimbursable or otherwise payable by us to our general
partner or any of its affiliates without the consent of our general partner, which consent
may be given or withheld at its option. |
The provision of our partnership agreement preventing the amendments having the effects
described in any of the clauses above can be amended upon the approval of the holders of at least
90% of the outstanding units voting together as a single class (including units owned by our
general partner and its affiliates). As of April 20, 2007, our general partner and its affiliates
owned approximately 41.5% of the outstanding common, subordinated and Class C units.
No Unitholder Approval. Our general partner may generally make amendments to our partnership
agreement without the approval of any limited partner or assignee to reflect:
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a change in our name, the location of our principal place of our business, our
registered agent or our registered office; |
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the admission, substitution, withdrawal or removal of partners in accordance with our
partnership agreement; |
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a change that our general partner determines to be necessary or appropriate to qualify
or continue our qualification as a limited partnership or a partnership in which the
limited partners have limited liability under the laws of any state or to ensure that
neither we nor the operating partnership nor any of its subsidiaries will be treated as an
association taxable as a corporation or otherwise taxed as an entity for federal income tax
purposes; |
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an amendment that is necessary, in the opinion of our counsel, to prevent us or our
general partner or its directors, officers, agents or trustees from in any manner being
subjected to the provisions of the Investment Company Act of 1940, the Investment Advisors
Act of 1940, or plan asset regulations adopted under the Employee Retirement Income
Security Act of 1974, or ERISA, whether or not substantially similar to plan asset
regulations currently applied or proposed; |
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an amendment that our general partner determines to be necessary or appropriate for the
authorization of additional partnership securities or rights to acquire partnership
securities, including any amendment that our general partner determines is necessary or
appropriate in connection with: |
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the adjustments of the minimum quarterly distribution, first target distribution,
second target distribution and third target distribution in connection with the reset
of our general partners incentive distribution rights as described under Our Cash
Distribution Policy and Restrictions on Distributions General Partners Right to Reset Incentive Distribution Levels; or |
II-28
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the implementation of the provisions relating to our general partners right to
reset its incentive distribution rights in exchange for Class B units; and |
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any modification of the incentive distribution rights made in connection with the
issuance of additional partnership securities or rights to acquire partnership
securities, provided that, any such modifications and related issuance of partnership
securities have received approval by a majority of the members of the conflicts
committee of our general partner; |
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any amendment expressly permitted in our partnership agreement to be made by our general
partner acting alone; |
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an amendment effected, necessitated or contemplated by a merger agreement that has been
approved under the terms of our partnership agreement; |
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any amendment that our general partner determines to be necessary or appropriate for the
formation by us of, or our investment in, any corporation, partnership or other entity, as
otherwise permitted by our partnership agreement; |
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a change in our fiscal year or taxable year and related changes; |
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conversions into, mergers with or conveyances to another limited liability entity that
is newly formed and has no assets, liabilities or operations at the time of the conversion,
merger or conveyance other than those it receives by way of the conversion, merger or
conveyance; or |
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any other amendments substantially similar to any of the matters described in the
clauses above. |
In addition, our general partner may make amendments to our partnership agreement without the
approval of any limited partner if our general partner determines that those amendments:
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do not adversely affect the limited partners (or any particular class of limited
partners) in any material respect; |
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are necessary or appropriate to satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order, ruling or regulation of any federal or state
agency or judicial authority or contained in any federal or state statute; |
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are necessary or appropriate to facilitate the trading of limited partner interests or
to comply with any rule, regulation, guideline or requirement of any securities exchange on
which the limited partner interests are or will be listed for trading; |
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are necessary or appropriate for any action taken by our general partner relating to
splits or combinations of units under the provisions of our partnership agreement; or |
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are required to effect the intent expressed in this prospectus or the intent of the
provisions of our partnership agreement or are otherwise contemplated by our partnership
agreement. |
Opinion of Counsel and Unitholder Approval. Our general partner will not be required to
obtain an opinion of counsel that an amendment will not result in a loss of limited liability to
the limited partners or result in our being treated as an entity for federal income tax purposes in
connection with any of the amendments. No other amendments to our partnership agreement will become
effective without the approval of holders of at least 90% of the outstanding units voting as a
single class unless we first obtain an opinion of counsel to the effect that the
amendment will not affect the limited liability under applicable law of any of our limited
partners.
In addition to the above restrictions, any amendment that would have a material adverse effect
on the rights or
II-29
preferences of any type or class of outstanding units in relation to other classes
of units will require the approval of at least a majority of the type or class of units so
affected. Any amendment that reduces the voting percentage required to take any action is required
to be approved by the affirmative vote of limited partners whose aggregate outstanding units
constitute not less than the voting requirement sought to be reduced.
Merger, Consolidation, Conversion, Sale or Other Disposition of Assets
A merger, consolidation or conversion of us requires the prior consent of our general partner.
However, our general partner will have no duty or obligation to consent to any merger,
consolidation or conversion and may decline to do so free of any fiduciary duty or obligation
whatsoever to us or the limited partners, including any duty to act in good faith or in the best
interest of us or the limited partners.
In addition, the partnership agreement generally prohibits our general partner without the
prior approval of the holders of a unit majority, from causing us to, among other things, sell,
exchange or otherwise dispose of all or substantially all of our assets in a single transaction or
a series of related transactions, including by way of merger, consolidation or other combination,
or approving on our behalf the sale, exchange or other disposition of all or substantially all of
the assets of our subsidiaries. Our general partner may, however, mortgage, pledge, hypothecate or
grant a security interest in all or substantially all of our assets without that approval. Our
general partner may also sell all or substantially all of our assets under a foreclosure or other
realization upon those encumbrances without that approval. Finally, our general partner may
consummate any merger without the prior approval of our unitholders if we are the surviving entity
in the transaction, our general partner has received an opinion of counsel regarding limited
liability and tax matters, the transaction would not result in a material amendment to the
partnership agreement, each of our units will be an identical unit of our partnership following the
transaction, and the partnership securities to be issued do not exceed 20% of our outstanding
partnership securities immediately prior to the transaction.
If the conditions specified in the partnership agreement are satisfied, our general partner
may convert us or any of our subsidiaries into a new limited liability entity or merge us or any of
our subsidiaries into, or convey all of our assets to, a newly formed entity if the sole purpose of
that conversion, merger or conveyance is to effect a mere change in our legal form into another
limited liability entity, our general partner has received an opinion of counsel regarding limited
liability and tax matters, and the governing instruments of the new entity provide the limited
partners and the general partner with the same rights and obligations as contained in the
partnership agreement. The unitholders are not entitled to dissenters rights of appraisal under
the partnership agreement or applicable Delaware law in the event of a conversion, merger or
consolidation, a sale of substantially all of our assets or any other similar transaction or event.
Termination and Dissolution
We will continue as a limited partnership until terminated under our partnership agreement. We
will dissolve upon:
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the election of our general partner to dissolve us, if approved by the holders of units
representing a unit majority; |
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there being no limited partners, unless we are continued without dissolution in
accordance with applicable Delaware law; |
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the entry of a decree of judicial dissolution of our partnership; or |
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the withdrawal or removal of our general partner or any other event that results in its
ceasing to be our general partner other than by reason of a transfer of its general partner
interest in accordance with our
partnership agreement or withdrawal or removal following approval and admission of a
successor. |
Upon a dissolution under the last clause above, the holders of a unit majority may also elect,
within specific time limitations, to continue our business on the same terms and conditions
described in our partnership agreement by appointing as a successor general partner an entity
approved by the holders of units representing a unit majority,
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subject to our receipt of an opinion
of counsel to the effect that:
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the action would not result in the loss of limited liability of any limited partner; and |
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neither our partnership, our operating partnership nor any of our other subsidiaries
would be treated as an association taxable as a corporation or otherwise be taxable as an
entity for federal income tax purposes upon the exercise of that right to continue. |
Liquidation and Distribution of Proceeds
Upon our dissolution, unless we are continued as a new limited partnership, the liquidator
authorized to wind up our affairs will, acting with all of the powers of our general partner that
are necessary or appropriate to liquidate our assets and apply the proceeds of the liquidation as
described in Our Cash Distribution Policy and Restrictions on Distributions Distributions of
Cash Upon Liquidation. The liquidator may defer liquidation or distribution of our assets for a
reasonable period of time or distribute assets to partners in kind if it determines that a sale
would be impractical or would cause undue loss to our partners.
Withdrawal or Removal of the General Partner
Except as described below, our general partner has agreed not to withdraw voluntarily as our
general partner prior to December 31, 2015 without obtaining the approval of the holders of at
least a majority of the outstanding common units, excluding common units held by the general
partner and its affiliates, and furnishing an opinion of counsel regarding limited liability and
tax matters. On or after December 31, 2015, our general partner may withdraw as general partner
without first obtaining approval of any unitholder by giving 90 days written notice, and that
withdrawal will not constitute a violation of our partnership agreement. Notwithstanding the
information above, our general partner may withdraw without unitholder approval upon 90 days
notice to the limited partners if at least 50% of the outstanding common units are held or
controlled by one person and its affiliates other than the general partner and its affiliates. In
addition, the partnership agreement permits our general partner in some instances to sell or
otherwise transfer all of its general partner interest in us without the approval of the
unitholders. Please read Transfer of General Partner Units and Transfer of Incentive
Distribution Rights.
Upon withdrawal of our general partner under any circumstances, other than as a result of a
transfer by our general partner of all or a part of its general partner interest in us, the holders
of a unit majority, voting as separate classes, may select a successor to that withdrawing general
partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited
liability and tax matters cannot be obtained, we will be dissolved, wound up and liquidated, unless
within a specified period after that withdrawal, the holders of a unit majority agree in writing to
continue our business and to appoint a successor general partner. Please read Termination and
Dissolution.
Our general partner may not be removed unless that removal is approved by the vote of the
holders of not less than 66 2/3% of the outstanding units, voting together as a single class,
including units held by our general partner and its affiliates, and we receive an opinion of
counsel regarding limited liability and tax matters. Any removal of our general partner is also
subject to the approval of a successor general partner by the vote of the holders of a majority of
the outstanding common units, Class C units and Class B units, if any, voting as a separate class,
and subordinated units, voting as a separate class. The ownership of more than 33 1/3% of the
outstanding units by our general partner and its affiliates would give them the practical ability
to prevent our general partners removal.
Our partnership agreement also provides that if our general partner is removed as our general
partner under circumstances where cause does not exist and units held by the general partner and
its affiliates are not voted in favor of that removal:
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the subordination period will end, and all outstanding subordinated units will
immediately convert into common units on a one-for-one basis; |
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any existing arrearages in payment of the minimum quarterly distribution on the common
units will be extinguished; and |
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our general partner will have the right to convert its general partner interest and its
incentive distribution rights into common units or to receive cash in exchange for those
interests based on the fair market value of those interests at that time. |
In the event of removal of a general partner under circumstances where cause exists or
withdrawal of a general partner where that withdrawal violates our partnership agreement, a
successor general partner will have the option to purchase the general partner interest and
incentive distribution rights of the departing general partner for a cash payment equal to the fair
market value of those interests. Under all other circumstances where a general partner withdraws or
is removed by the limited partners, the departing general partner will have the option to require
the successor general partner to purchase the general partner interest of the departing general
partner and its incentive distribution rights for fair market value. In each case, this fair market
value will be determined by agreement between the departing general partner and the successor
general partner. If no agreement is reached, an independent investment banking firm or other
independent expert selected by the departing general partner and the successor general partner will
determine the fair market value. Or, if the departing general partner and the successor general
partner cannot agree upon an expert, then an expert chosen by agreement of the experts selected by
each of them will determine the fair market value.
If the option described above is not exercised by either the departing general partner or the
successor general partner, the departing general partners general partner interest and its
incentive distribution rights will automatically convert into common units equal to the fair market
value of those interests as determined by an investment banking firm or other independent expert
selected in the manner described in the preceding paragraph.
In addition, we will be required to reimburse the departing general partner for all amounts
due the departing general partner, including, without limitation, all employee-related liabilities,
including severance liabilities, incurred for the termination of any employees employed by the
departing general partner or its affiliates for our benefit.
Transfer of General Partner Units
Except for transfer by our general partner of all, but not less than all, of its general
partner units to:
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an affiliate of our general partner (other than an individual); or |
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another entity as part of the merger or consolidation of our general partner with or
into another entity or the transfer by our general partner of all or substantially all of
its assets to another entity, |
our general partner may not transfer all or any of its general partner units to another person
prior to December 31, 2015 without the approval of the holders of at least a majority of the
outstanding common units, excluding common units held by our general partner and its affiliates. As
a condition of this transfer, the transferee must assume, among other things, the rights and duties
of our general partner, agree to be bound by the provisions of our partnership agreement, and
furnish an opinion of counsel regarding limited liability and tax matters.
Our general partner and its affiliates may at any time, transfer units to one or more persons,
without unitholder approval, except that they may not transfer subordinated units to us.
Transfer of Ownership Interests in the General Partner
At any time, DCP Midstream, LLC and its affiliates may sell or transfer all or part of their
partnership interests in our general partner, or their membership interest in DCP Midstream GP,
LLC, the general partner of our general partner, to an affiliate or third party without the
approval of our unitholders.
Transfer of Incentive Distribution Rights
Our general partner or its affiliates or a subsequent holder may transfer its incentive
distribution rights to an affiliate of the holder (other than an individual) or another entity as
part of the merger or consolidation of such holder with or into another entity, the sale of all of
the ownership interest in the holder or the sale of all or
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substantially all of its assets to, that
entity without the prior approval of the unitholders. Prior to December 31, 2015, other transfers
of incentive distribution rights will require the affirmative vote of holders of a majority of the
outstanding common units, excluding common units held by our general partner and its affiliates. On
or after December 31, 2015, the incentive distribution rights will be freely transferable.
Change of Management Provisions
Our partnership agreement contains specific provisions that are intended to discourage a
person or group from attempting to remove DCP Midstream GP, LP as our general partner or otherwise
change our management. If any person or group other than our general partner and its affiliates
acquires beneficial ownership of 20% or more of any class of units, that person or group loses
voting rights on all of its units. This loss of voting rights does not apply to any person or group
that acquires the units from our general partner or its affiliates and any transferees of that
person or group approved by our general partner or to any person or group who acquires the units
with the prior approval of the board of directors of our general partner.
Our partnership agreement also provides that if our general partner is removed as our general
partner under circumstances where cause does not exist and units held by our general partner and
its affiliates are not voted in favor of that removal:
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the subordination period will end and all outstanding subordinated units will
immediately convert into common units on a one-for-one basis; |
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any existing arrearages in payment of the minimum quarterly distribution on the common
units will be extinguished; and |
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our general partner will have the right to convert its general partner units and its
incentive distribution rights into common units or to receive cash in exchange for those
interests based on the fair market value of those interests at that time. |
Limited Call Right
If at any time our general partner and its affiliates own more than 80% of the then-issued and
outstanding limited partner interests of any class, our general partner will have the right, which
it may assign in whole or in part to any of its affiliates or to us, to acquire all, but not less
than all, of the limited partner interests of the class held by unaffiliated persons as of a record
date to be selected by our general partner, on at least 10 but not more than 60 days notice. The
purchase price in the event of this purchase is the greater of:
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the highest cash price paid by either of our general partner or any of its affiliates
for any limited partner interests of the class purchased within the 90 days preceding the
date on which our general partner first mails notice of its election to purchase those
limited partner interests; and |
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the current market price as of the date three days before the date the notice is mailed. |
As a result of our general partners right to purchase outstanding limited partner interests,
a holder of limited partner interests may have his limited partner interests purchased at a price
that may be lower than market prices at various times prior to such purchase or lower than a
unitholder may anticipate the market price to be in the future. The tax consequences to a
unitholder of the exercise of this call right are the same as a sale by that unitholder of his
common units in the market. Please read Material Tax Consequences Disposition of Common Units.
Meetings; Voting
Except as described below regarding a person or group owning 20% or more of any class of units
then outstanding, record holders of units on the record date will be entitled to notice of, and to
vote at, meetings of our limited partners and to act upon matters for which approvals may be
solicited.
Our general partner does not anticipate that any meeting of unitholders will be called in the
foreseeable future.
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Any action that is required or permitted to be taken by the unitholders may be
taken either at a meeting of the unitholders or without a meeting if consents in writing describing
the action so taken are signed by holders of the number of units necessary to authorize or take
that action at a meeting. Meetings of the unitholders may be called by our general partner or by
unitholders owning at least 20% of the outstanding units of the class for which a meeting is
proposed. Unitholders may vote either in person or by proxy at meetings. The holders of a majority
of the outstanding units of the class or classes for which a meeting has been called represented in
person or by proxy will constitute a quorum unless any action by the unitholders requires approval
by holders of a greater percentage of the units, in which case the quorum will be the greater
percentage.
Each record holder of a unit has a vote according to his percentage interest in us, although
additional limited partner interests having special voting rights could be issued. Please read
Issuance of Additional Securities. However, if at any time any person or group, other than our
general partner and its affiliates, or a direct or subsequently approved transferee of our general
partner or its affiliates, acquires, in the aggregate, beneficial ownership of 20% or more of any
class of units then outstanding, that person or group will lose voting rights on all of its units
and the units may not be voted on any matter and will not be considered to be outstanding when
sending notices of a meeting of unitholders, calculating required votes, determining the presence
of a quorum or for other similar purposes. Common units held in nominee or street name account will
be voted by the broker or other nominee in accordance with the instruction of the beneficial owner
unless the arrangement between the beneficial owner and his nominee provides otherwise. Except as
our partnership agreement otherwise provides, subordinated units will vote together with common
units, Class C and Class B units, if any, as a single class.
Any notice, demand, request, report or proxy material required or permitted to be given or
made to record holders of common units under our partnership agreement will be delivered to the
record holder by us or by the transfer agent.
Status as Limited Partner
By transfer of common units in accordance with our partnership agreement, each transferee of
common units shall be admitted as a limited partner with respect to the common units transferred
when such transfer and admission is reflected in our books and records. Except as described under
Limited Liability, the common units will be fully paid, and unitholders will not be required to
make additional contributions.
Non-Citizen Assignees; Redemption
If we are or become subject to federal, state or local laws or regulations that, in the
reasonable determination of our general partner, create a substantial risk of cancellation or
forfeiture of any property that we have an interest in because of the nationality, citizenship or
other related status of any limited partner, we may redeem the units held by the limited partner at
their current market price. In order to avoid any cancellation or forfeiture, our general partner
may require each limited partner to furnish information about his nationality, citizenship or
related status. If a limited partner fails to furnish information about his nationality,
citizenship or other related status within 30 days after a request for the information or our
general partner determines after receipt of the information that the limited partner is not an
eligible citizen, the limited partner may be treated as a non-citizen assignee. A non-citizen
assignee,
is entitled to an interest equivalent to that of a limited partner for the right to share in
allocations and distributions from us, including liquidating distributions. A non-citizen assignee
does not have the right to direct the voting of his units and may not receive distributions in-kind
upon our liquidation.
Indemnification
Under our partnership agreement, in most circumstances, we will indemnify the following
persons, to the fullest extent permitted by law, from and against all losses, claims, damages or
similar events:
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our general partner; |
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any departing general partner; |
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any person who is or was an affiliate of a general partner or any departing general partner; |
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any person who is or was a director, officer, member, partner, fiduciary or trustee of
any entity set forth in the preceding three bullet points; |
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any person who is or was serving as director, officer, member, partner, fiduciary or
trustee of another person at the request of our general partner or any departing general
partner; and |
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any person designated by our general partner. |
Any indemnification under these provisions will only be out of our assets. Unless it otherwise
agrees, our general partner will not be personally liable for, or have any obligation to contribute
or lend funds or assets to us to enable us to effectuate, indemnification. We may purchase
insurance against liabilities asserted against and expenses incurred by persons for our activities,
regardless of whether we would have the power to indemnify the person against liabilities under our
partnership agreement.
Reimbursement of Expenses
Our partnership agreement requires us to reimburse our general partner for all direct and
indirect expenses it incurs or payments it makes on our behalf and all other expenses allocable to
us or otherwise incurred by our general partner in connection with operating our business. These
expenses include salary, bonus, incentive compensation and other amounts paid to persons who
perform services for us or on our behalf and expenses allocated to our general partner by its
affiliates. The general partner is entitled to determine in good faith the expenses that are
allocable to us.
Books and Reports
Our general partner is required to keep appropriate books of our business at our principal
offices. The books will be maintained for both tax and financial reporting purposes on an accrual
basis. For tax and fiscal reporting purposes, our fiscal year is the calendar year.
We will furnish or make available to record holders of common units, within 120 days after the
close of each fiscal year, an annual report containing audited financial statements and a report on
those financial statements by our independent public accountants. Except for our fourth quarter, we
will also furnish or make available summary financial information within 90 days after the close of
each quarter.
We will furnish each record holder of a unit with information reasonably required for tax
reporting purposes within 90 days after the close of each calendar year. This information is
expected to be furnished in summary form so that some complex calculations normally required of
partners can be avoided. Our ability to furnish this summary information to unitholders will depend
on the cooperation of unitholders in supplying us with specific information.
Every unitholder will receive information to assist him in determining his federal and state
tax liability and filing his federal and state income tax returns, regardless of whether he
supplies us with information.
Right to Inspect Our Books and Records
Our partnership agreement provides that a limited partner can, for a purpose reasonably
related to his interest as a limited partner, upon reasonable written demand stating the purpose of
such demand and at his own expense, have furnished to him:
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a current list of the name and last known address of each partner; |
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a copy of our tax returns; |
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information as to the amount of cash, and a description and statement of the agreed
value of any other property or services, contributed or to be contributed by each partner
and the date on which each partner became a partner; |
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copies of our partnership agreement, our certificate of limited partnership, related
amendments and powers of attorney under which they have been executed; |
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information regarding the status of our business and financial condition; and |
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any other information regarding our affairs as is just and reasonable. |
Our general partner may, and intends to, keep confidential from the limited partners trade
secrets or other information the disclosure of which our general partner believes in good faith is
not in our best interests or that we are required by law or by agreements with third parties to
keep confidential.
Registration Rights
Under our partnership agreement, we have agreed to register for resale under the Securities
Act and applicable state securities laws any common units, subordinated units or other partnership
securities proposed to be sold by our general partner or any of its affiliates or their assignees
if an exemption from the registration requirements is not otherwise available. These registration
rights continue for two years following any withdrawal or removal of DCP Midstream GP, LP as
general partner. We are obligated to pay all expenses incidental to the registration, excluding
underwriting discounts and a structuring fee.
Transfer of Common Units
By transfer of common units in accordance with our partnership agreement, each transferee of
common units shall be admitted as a limited partner with respect to the common units transferred
when such transfer and admission is reflected in our books and records. Each transferee:
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represents that the transferee has the capacity, power and authority to become bound by
our partnership agreement; |
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automatically agrees to be bound by the terms and conditions of, and is deemed to have
executed, our partnership agreement; and |
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gives the consents and approvals contained in our partnership agreement, such as the
approval of all transactions and agreements that we entered into in connection with our
formation and our initial public offering. |
A transferee will become a substituted limited partner of our partnership for the transferred
common units
automatically upon the recording of the transfer on our books and records. Our general partner
will cause any transfers to be recorded on our books and records no less frequently than quarterly.
We may, at our discretion, treat the nominee holder of a common unit as the absolute owner. In
that case, the beneficial holders rights are limited solely to those that it has against the
nominee holder as a result of any agreement between the beneficial owner and the nominee holder.
Common units are securities and are transferable according to the laws governing transfers of
securities. In addition to other rights acquired upon transfer, the transferor gives the transferee
the right to become a substituted limited partner in our partnership for the transferred common
units.
Until a common unit has been transferred on our books, we and the transfer agent may treat the
record holder of the unit as the absolute owner for all purposes, except as otherwise required by
law or stock exchange regulations.
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OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS
General
Rationale for Our Cash Distribution Policy. Our cash distribution policy reflects a basic
judgment that our unitholders will be better served by our distributing our cash available after
expenses and reserves rather than retaining it. Because we believe we will generally finance any
non-maintenance capital investments from external financing sources, we believe that our investors
are best served by our distributing all of our available cash. Because we are not subject to an
entity-level federal income tax, we have more cash to distribute to you than would be the case were
we subject to tax. Our cash distribution policy is consistent with the terms of our partnership
agreement, which requires that we distribute all of our available cash quarterly.
Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy.
There is no guarantee that unitholders will receive quarterly distributions from us. Our
distribution policy is subject to certain restrictions and may be changed at any time, including:
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Our distribution policy is subject to restrictions on distributions under our credit
facility. Specifically, the agreement related to our credit facility contains material
financial tests and covenants that we must satisfy. Should we be unable to satisfy these
restrictions under our credit facility or if we are otherwise in default under our credit
facility, we would be prohibited from making cash distributions to you notwithstanding our
stated cash distribution policy. |
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The board of directors of our general partner will have the authority to establish
reserves for the prudent conduct of our business and for future cash distributions to our
unitholders, and the establishment of those reserves could result in a reduction in cash
distributions to you from levels we currently anticipate pursuant to our stated
distribution policy. |
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While our partnership agreement requires us to distribute all of our available cash, our
partnership agreement, including provisions requiring us to make cash distributions
contained therein, may be amended. Although during the subordination period, with certain
exceptions, our partnership agreement may not be amended without the approval of the public
common unitholders, our partnership agreement can be amended with the approval of a
majority of the outstanding common units and Class C units and any Class B units issued
upon the reset of incentive distribution rights, if any, voting as a class (including
common units held by affiliates of DCP Midstream, LLC) after the subordination period has
ended. |
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Even if our cash distribution policy is not modified or revoked, the amount of
distributions we pay under our cash distribution policy and the decision to make any
distribution is determined by of our general partner, taking into consideration the terms
of our partnership agreement. |
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Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, we may not
make a distribution to you if the distribution would cause our liabilities to exceed the
fair value of our assets. |
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We may lack sufficient cash to pay distributions to our unitholders due to increases in
our general and administrative expense, principal and interest payments on our outstanding
debt, tax expenses, working capital requirements and anticipated cash needs. |
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We own a 45% interest in the Black Lake Pipe Line Company, DCP Midstream, LLC owns a 5%
interest and BP owns the other 50% interest. Black Lake Pipe Line Company is required by
the terms of its partnership agreement to make monthly cash distributions equal to 100% of
its available cash, which is defined as receipts less disbursements plus any reduction in
cash reserves or minus any increase in cash reserves. BP, as the operator of this company,
makes all of these determinations. As a result, we generally do not have any control over
the amount or timing of cash distributions made by Black Lake Pipe Line Company. The
partnership agreement of Black Lake Pipe Line Company may not be amended without the
approval of us and BP. In anticipation of a pipeline integrity project, Black Lake Pipe
Line Company
suspended making monthly cash distributions in December 2004 in order to reserve cash to pay
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expenses of this project. We expect that this project will be completed in 2007 and the
monthly cash distributions will resume following the completion of this project. |
Our Ability to Grow is Dependent on Our Ability to Access External Expansion Capital. We
expect that we will distribute all of our available cash to our unitholders. As a result, we expect
that we will rely primarily upon external financing sources, including commercial bank borrowings
and the issuance of debt and equity securities, to fund our acquisitions and expansion capital
expenditures. As a result, to the extent we are unable to finance growth externally, our cash
distribution policy will significantly impair our ability to grow. In addition, because we
distribute all of our available cash, our growth may not be as fast as businesses that reinvest
their available cash to expand ongoing operations. To the extent we issue additional units in
connection with any acquisitions or expansion capital expenditures, the payment of distributions on
those additional units may increase the risk that we will be unable to maintain or increase our per
unit distribution level, which in turn may impact the available cash that we have to distribute on
each unit. There are no limitations in our partnership agreement or our credit facility on our
ability to issue additional units, including units ranking senior to the common units. The
incurrence of additional commercial borrowings or other debt to finance our growth strategy would
result in increased interest expense, which in turn may impact the available cash that we have to
distribute to our unitholders.
Distributions of Available Cash
General. Our partnership agreement requires that, within 45 days after the end of each
quarter, beginning with the quarter ending December 31, 2005, we distribute all of our available
cash to unitholders of record on the applicable record date.
Definition of Available Cash. Available cash, for any quarter, consists of all cash on hand
at the end of that quarter:
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less the amount of cash reserves established by our general partner to: |
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provide for the proper conduct of our business; |
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comply with applicable law, any of our debt instruments or other agreements; or |
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provide funds for distributions to our unitholders and to our general
partner for any one or more of the next four quarters; |
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plus, if our general partner so determines, all or a portion of cash on hand on the
date of determination of available cash for the quarter. |
Minimum Quarterly Distribution. The minimum quarterly distribution, as defined in our
partnership agreement, is $0.35 per unit per quarter, or $1.40 per unit per year. Our current
quarterly distribution is $0.43 per unit, or $1.72 per unit annualized. There is no guarantee that
we will maintain our current distribution or pay the minimum quarterly distribution on the units in
any quarter. Even if our cash distribution policy is not modified or revoked, the amount of
distributions paid under our policy and the decision to make any distribution is determined by our
general partner, taking into consideration the terms of our partnership agreement. We will be
prohibited from making any distributions to unitholders if it would cause an event of default, or
an event of default exists, under our credit agreement.
General Partner Interest and Incentive Distribution Rights. Initially, our general partner
will be entitled to 2% of all quarterly distributions since inception that we make prior to our
liquidation. Our general partner has the right, but not the obligation, to contribute a
proportionate amount of capital to us to maintain its current general partner interest. The general
partners initial 2% interest in these distributions may be reduced if we issue additional units in
the future and our general partner does not contribute a proportionate amount of capital to us to
maintain its 2% general partner interest.
Our general partner also currently holds incentive distribution rights that entitle it to
receive increasing percentages, up to a maximum of 50%, of the cash we distribute from operating
surplus (as defined below) in excess
II-38
of $0.4025 per unit per quarter. The maximum distribution of
50% includes distributions paid to our general partner on its 2% general partner interest and
assumes that our general partner maintains its general partner interest at 2%. The maximum
distribution of 50% does not include any distributions that our general partner may receive on
limited partner units that it owns. Please read General Partner Interest and Incentive
Distribution Rights for additional information.
Operating Surplus and Capital Surplus
General. All cash distributed to unitholders will be characterized as either operating
surplus or capital surplus. Our partnership agreement requires that we distribute available cash
from operating surplus differently than available cash from capital surplus.
Operating Surplus. Operating surplus consists of:
|
|
|
an amount equal to four times the amount needed for any one quarter for us to pay a
distribution on all of our units (including the general partner units) and the incentive
distribution rights at the same per-unit amount as was distributed in the immediately
preceding quarter; plus |
|
|
|
|
all of our cash receipts since our initial public offering, excluding cash from
borrowings, sales of equity and debt securities, sales or other dispositions of assets
outside the ordinary course of business, the termination of interest rate swap
agreements, capital contributions or corporate reorganizations or restructurings; less |
|
|
|
|
all of our operating expenditures since our initial public offering, but excluding
the repayment of borrowings, and including maintenance capital expenditures; less |
|
|
|
|
the amount of cash reserves established by our general partner to provide funds for
future operating expenditures. |
Maintenance capital expenditures represent cash expenditures where we add on to or improve
capital assets owned or acquire or construct new capital assets if such expenditures are
made to maintain, including over the long term, our operating capacity or revenues. Expansion
capital expenditures represent cash expenditures for acquisitions or capital improvements (where we
add on to or improve the capital assets owned, or acquire or construct new gathering lines,
treating facilities, processing plants, fractionation facilities, pipelines, terminals, docks,
truck racks, tankage and other storage, distribution or transportation facilities and related or
similar midstream assets) in each case if such addition, improvement, acquisition or construction
is made to increase our operating capacity or revenues or those of our equity interests. Costs for
repairs and minor renewals to maintain facilities in operating condition and that do not extend the
useful life of existing assets will be treated as operations and maintenance expenses as we incur
them. Our partnership agreement provides that our general partner determines how to allocate a
capital expenditure for the acquisition or expansion of our assets between maintenance capital
expenditures and expansion capital expenditures.
Capital Surplus. Capital surplus consists of:
|
|
|
borrowings; |
|
|
|
|
sales of our equity and debt securities; and |
|
|
|
|
sales or other dispositions of assets for cash, other than inventory, accounts
receivable and other current assets sold in the ordinary course of business or as part
of normal retirement or replacement of assets. |
Characterization of Cash Distributions. Our partnership agreement requires that we treat all
available cash distributed as coming from operating surplus until the sum of all available cash
distributed since our initial public offering equals the operating surplus as of the most recent
date of determination of available cash. Our partnership agreement requires that we treat any
amount distributed in excess of operating surplus, regardless of its source, as
II-39
capital surplus. As
reflected above, operating surplus includes an amount equal to four times the amount needed for any
one quarter for us to pay a distribution on all of our units (including the general partner units)
and the incentive distribution rights at the same per-unit amount as was distributed in the
immediately preceding quarter. This amount, which initially equals $25.0 million, does not reflect
actual cash on hand that is available for distribution to our unitholders. Rather, it is a
provision that will enable us, if we choose, to distribute as operating surplus up to this amount
of cash we receive in the future from non-operating sources, such as asset sales, issuances of
securities, and borrowings, that would otherwise be distributed as capital surplus. We do not
anticipate that we will make any distributions from capital surplus.
Subordination Period
General. Our partnership agreement provides that, during the subordination period (which we
define below and in Appendix B), the common units and Class C units will have the right to receive
distributions of available cash from operating surplus each quarter in an amount equal to $0.35 per
common unit and Class C unit, which amount is defined in our partnership agreement as the minimum
quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on
the common units and Class C units from prior quarters, before any distributions of available cash
from operating surplus may be made on the subordinated units. These units are deemed subordinated
because for a period of time, referred to as the subordination period, the subordinated units will
not be entitled to receive any distributions until the common units have received the minimum
quarterly distribution plus any arrearages from prior quarters. Furthermore, no arrearages will be
paid on the subordinated units. The practical effect of the subordinated units is to increase the
likelihood that during the subordination period there will be available cash to be distributed on
the common units.
Subordination Period. The subordination period will extend until the first day of any quarter
beginning after December 31, 2010 that each of the following tests are met:
|
|
|
distributions of available cash from operating surplus on each of the outstanding common
units, Class C units, subordinated units and general partner units equaled or exceeded the
minimum quarterly distribution for each of the three consecutive, non-overlapping
four-quarter periods immediately preceding that date; |
|
|
|
|
the adjusted operating surplus (as defined below) generated during each of the three
consecutive, non-overlapping four-quarter periods immediately preceding that date equaled
or exceeded the sum of the minimum quarterly distributions on all of the outstanding
common, Class C and subordinated units and general partner units during those periods on a
fully diluted basis during those periods; and |
|
|
|
|
there are no arrearages in payment of the minimum quarterly distribution on the common
units and Class C units. |
Expiration of the Subordination Period. When the subordination period expires, each
outstanding subordinated unit will convert into one common unit and will then participate pro rata
with the other common units in distributions of available cash. In addition, if the unitholders
remove our general partner other than for cause and units held by the general partner and its
affiliates are not voted in favor of such removal:
|
|
|
the subordination period will end and each subordinated unit will immediately convert
into one common unit; |
|
|
|
|
any existing arrearages in payment of the minimum quarterly distribution on the common
units and Class C units will be extinguished; and |
|
|
|
|
the general partner will have the right to convert its general partner units and its
incentive distribution rights
into common units or to receive cash in exchange for those interests. |
Early Conversion of Subordinated Units. If the tests for ending the subordination period are
satisfied for any two consecutive, non-overlapping four-quarter periods ending on or after December
31, 2007, 50% of the subordinated units will convert into an equal number of common units. In
addition to the early conversion of
II-40
subordinated units described above, 50% of the subordinated
units will convert into an equal number of common units if the following tests are met:
|
|
|
distributions of available cash from operating surplus on each of the outstanding common
units, Class C units, subordinated units and general partner units equaled or exceeded
$1.75 (125% of the annualized minimum quarterly distribution) for each of the two
consecutive, non-overlapping four-quarter periods ending on or after December 31, 2008; and |
|
|
|
|
the adjusted operating surplus generated during each of the two consecutive,
non-overlapping four-quarter periods immediately preceding that date equaled or exceeded
the sum of a distribution of $1.75 per common unit (125% of the annualized minimum
quarterly distribution) on all of the outstanding common, Class C and subordinated units
and general partner units during those periods on a fully diluted basis; and |
|
|
|
|
there are no arrearages in payment of the minimum quarterly distribution on the common
units and Class C units. |
The second early conversion of subordinated units may not occur, however, until at least one
year following the end of the period for the first early conversion of subordinated units.
Adjusted Operating Surplus. Adjusted operating surplus is intended to reflect the cash
generated from operations during a particular period and therefore excludes net drawdowns of
reserves of cash generated in prior periods. Adjusted operating surplus consists of:
|
|
|
operating surplus generated with respect to that period; plus |
|
|
|
|
any net decrease made in subsequent periods in cash reserves for operating expenditures
initially established with respect to that period; less |
|
|
|
|
any net decrease in cash reserves for operating expenditures with respect to that period
not relating to an operating expenditure made with respect to that period; plus |
|
|
|
|
any net increase in cash reserves for operating expenditures with respect to that period
required by any debt instrument for the repayment of principal, interest or premium. |
Distributions of Available Cash from Operating Surplus during the Subordination Period
Our partnership agreement requires that we make distributions of available cash from operating
surplus for any quarter during the subordination period in the following manner:
|
|
|
first, 98% to the common and Class C unitholders, pro rata, and 2% to the general
partner, until we distribute for each outstanding common and Class C unit an amount equal
to the minimum quarterly distribution for that quarter; |
|
|
|
|
second, 98% to the common and Class C unitholders, pro rata, and 2% to the general
partner, until we distribute for each outstanding common and Class C unit an amount equal
to any arrearages in payment of the minimum quarterly distribution on the common and Class
C units for any prior quarters during the subordination period; |
|
|
|
|
third, 98% to the subordinated unitholders, pro rata, and 2% to the general partner,
until we distribute for
each subordinated unit an amount equal to the minimum quarterly distribution for that
quarter; and |
|
|
|
|
thereafter, in the manner described in General Partner Interest and Incentive
Distribution Rights below. |
The preceding discussion is based on the assumptions that our general partner maintains its 2%
general partner interest and that we do not issue additional classes of equity securities.
II-41
Distributions of Available Cash from Operating Surplus after the Subordination Period
Our partnership agreement requires that we make distributions of available cash from operating
surplus for any quarter after the subordination period in the following manner:
|
|
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until we
distribute for each outstanding unit an amount equal to the minimum quarterly distribution
for that quarter; and |
|
|
|
|
thereafter, in the manner described in General Partner Interest and Incentive
Distribution Rights below. |
The preceding discussion is based on the assumptions that our general partner maintains its 2%
general partner interest and that we do not issue additional classes of equity securities.
General Partner Interest and Incentive Distribution Rights
Our partnership agreement provides that our general partner initially will be entitled to 2%
of all distributions that we make prior to our liquidation. Our general partner has the right, but
not the obligation, to contribute a proportionate amount of capital to us to maintain its 2%
general partner interest if we issue additional units. Our general partners 2% interest, and the
percentage of our cash distributions to which it is entitled, will be proportionately reduced if we
issue additional units in the future and our general partner does not contribute a proportionate
amount of capital to us in order to maintain its 2% general partner interest. Our general partner
will be entitled to make a capital contribution in order to maintain its 2% general partner
interest in the form of the contribution to us of common units or Class C units based on the
current market value of the contributed common units or Class C units.
Incentive distribution rights represent the right to receive an increasing percentage (13%,
23% and 48%) of quarterly distributions of available cash from operating surplus after the minimum
quarterly distribution and the target distribution levels have been achieved. Our general partner
currently holds the incentive distribution rights, but may transfer these rights separately from
its general partner interest, subject to restrictions in the partnership agreement.
The following discussion assumes that the general partner maintains its 2% general partner
interest and continues to own the incentive distribution rights.
If for any quarter:
|
|
|
we have distributed available cash from operating surplus to the common, Class C and
subordinated unitholders in an amount equal to the minimum quarterly distribution; and |
|
|
|
|
we have distributed available cash from operating surplus on outstanding common units
and Class C units in an amount necessary to eliminate any cumulative arrearages in payment
of the minimum quarterly distribution; |
then, our partnership agreement requires that we distribute any additional available cash from
operating surplus for that quarter among the unitholders and the general partner in the following
manner:
|
|
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until each
unitholder receives a total of $0.4025 per unit for that quarter (the first target distribution); |
|
|
|
|
second, 85% to all unitholders, pro rata, and 15% to the general partner, until each
unitholder receives a total of $0.4375 per unit for that quarter (the second target
distribution); |
|
|
|
|
third, 75% to all unitholders, pro rata, and 25% to the general partner, until each
unitholder receives a total of $0.525 per unit for that quarter (the third target
distribution); and |
|
|
|
|
thereafter, 50% to all unitholders, pro rata, and 50% to the general partner. |
II-42
General Partners Right to Reset Incentive Distribution Levels
Our general partner, as the holder of our incentive distribution rights, has the right under
our partnership agreement to elect to relinquish the right to receive incentive distribution
payments based on the initial cash target distribution levels and to reset, at higher levels, the
minimum quarterly distribution amount and cash target distribution levels upon which the incentive
distribution payments to our general partner would be set. Our general partners right to reset the
minimum quarterly distribution amount and the target distribution levels upon which the incentive
distributions payable to our general partner are based may be exercised, without approval of our
unitholders or the conflicts committee of our general partner, at any time when there are no
subordinated units outstanding and we have made cash distributions to the holders of the incentive
distribution rights at the highest level of incentive distribution for each of the prior four
consecutive fiscal quarters. The reset minimum quarterly distribution amount and target
distribution levels will be higher than the minimum quarterly distribution amount and the target
distribution levels prior to the reset such that our general partner will not receive any incentive
distributions under the reset target distribution levels until cash distributions per unit
following this event increase as described below. We anticipate that our general partner would
exercise this reset right in order to facilitate acquisitions or internal growth projects that
would otherwise not be sufficiently accretive to cash distributions per common unit, taking into
account the existing levels of incentive distribution payments being made to our general partner.
In connection with the resetting of the minimum quarterly distribution amount and the target
distribution levels and the corresponding relinquishment by our general partner of incentive
distribution payments based on the target cash distributions prior to the reset, our general
partner will be entitled to receive a number of newly issued Class B units based on a predetermined
formula described below that takes into account the cash parity value of the average cash
distributions related to the incentive distribution rights received by our general partner for the
two quarters prior to the reset event as compared to the average cash distributions per common unit
during this period.
The number of Class B units that our general partner would be entitled to receive from us in
connection with a resetting of the minimum quarterly distribution amount and the target
distribution levels then in effect would be equal to (x) the average amount of cash distributions
received by our general partner in respect of its incentive distribution rights during the two
consecutive fiscal quarters ended immediately prior to the date of such reset election divided by
(y) the average of the amount of cash distributed per common unit during each of these two
quarters. Each Class B unit will be convertible into one common unit at the election of the holder
of the Class B unit at any time following the first anniversary of the issuance of these Class B
units.
Following a reset election by our general partner, the minimum quarterly distribution amount
will be reset to an amount equal to the average cash distribution amount per common unit for the
two fiscal quarters immediately preceding the reset election (such amount is referred to as the
reset minimum quarterly distribution) and the target distribution levels will be reset to be
correspondingly higher such that we would distribute all of our available cash from operating
surplus for each quarter thereafter as follows:
|
|
|
first, 98% to all unitholders, pro rata, and 2% to the general partner, until each
unitholder receives an amount equal to 115% of the reset minimum quarterly distribution for
that quarter; |
|
|
|
|
second, 85% to all unitholders, pro rata, and 15% to the general partner, until each
unitholder receives an
amount per unit equal to 125% of the reset minimum quarterly distribution for that quarter; |
|
|
|
|
third, 75% to all unitholders, pro rata, and 25% to the general partner, until each
unitholder receives an amount per unit equal to 150% of the reset minimum quarterly
distribution for that quarter; and |
|
|
|
|
thereafter, 50% to all unitholders, pro rata, and 50% to the general partner. |
The following table illustrates the percentage allocation of available cash from operating
surplus between the
II-43
unitholders and our general partner at various levels of cash distribution
levels pursuant to the cash distribution provision of our partnership agreement as well as
following a hypothetical reset of the minimum quarterly distribution and target distribution levels
based on the assumption that the average quarterly cash distribution amount per common unit during
the two fiscal quarters immediately preceding the reset election was $0.60.
|
|
|
|
|
|
|
|
|
|
|
|
|
Marginal Percentage |
|
|
|
|
|
|
Interest in Distributions |
|
|
|
|
Quarterly Distribution per Unit |
|
|
|
General |
|
Quarterly Distribution per Unit |
|
|
Prior to Reset |
|
Unitholders |
|
Partner |
|
following Hypothetical Reset |
Minimum Quarterly
Distribution |
|
$0.35 |
|
98% |
|
2% |
|
$0.60 |
First Target Distribution |
|
up to $0.4025 |
|
98% |
|
2% |
|
up to $0.69 (1) |
Second Target Distribution |
|
above $0.4025 up to $0.4375 |
|
85% |
|
15% |
|
above $0.69 (1) up to $0.75 (2) |
Third Target Distribution |
|
above $0.4375 up to $0.525 |
|
75% |
|
25% |
|
above $0.75 (2) up to $0.90 (3) |
Thereafter |
|
above $0.525 |
|
50% |
|
50% |
|
above $0.90 (3) |
|
|
|
(1) |
|
This amount is 115% of the hypothetical reset minimum quarterly distribution. |
|
(2) |
|
This amount is 125% of the hypothetical reset minimum quarterly distribution. |
|
(3) |
|
This amount is 150% of the hypothetical reset minimum quarterly distribution. |
The following table illustrates the total amount of available cash from operating surplus that
would be distributed to the unitholders and the general partner, including in respect of incentive
distribution rights, or IDRs, based on an average of the amounts distributed for a quarter for the
two quarters immediately prior to the reset. The table assumes that there are 45,000,000 common
units, no Class C units and 918,367 general partner units, representing a 2% general partner
interest, outstanding, and that the average distribution to each common unit is $0.60 for the two
quarters prior to the reset.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Partner Cash Distributions |
|
|
|
|
|
|
|
Common |
|
|
Prior to Reset |
|
|
|
|
|
|
|
Unitholders |
|
|
|
|
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Distribution |
|
Cash |
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per Unit |
|
Distributions |
|
|
Class B |
|
|
Partner |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
Prior to Reset |
|
Prior to Reset |
|
|
Units |
|
|
Interest |
|
|
IDRs |
|
|
Total |
|
|
Distribution |
|
Minimum
Quarterly Distribution |
|
$ 0.35 |
|
|
$ |
15,750,000 |
|
|
$ |
|
|
|
$ |
321,429 |
|
|
$ |
|
|
|
$ |
321,429 |
|
|
$ |
16,071,429 |
|
First Target Distribution |
|
up to $0.4025 |
|
|
2,362,500 |
|
|
|
|
|
|
|
48,214 |
|
|
|
|
|
|
|
48,214 |
|
|
|
2,410,714 |
|
Second
Target Distribution |
|
above $0.4025 up to $0.4375 |
|
|
1,575,000 |
|
|
|
|
|
|
|
37,059 |
|
|
|
240,882 |
|
|
|
277,941 |
|
|
|
1,852,941 |
|
Third Target Distribution |
|
above $0.4375 up to $0.525 |
|
|
3,937,500 |
|
|
|
|
|
|
|
105,000 |
|
|
|
1,207,500 |
|
|
|
1,312,500 |
|
|
|
5,250,000 |
|
Thereafter |
|
above $0.525 |
|
|
3,375,000 |
|
|
|
|
|
|
|
135,000 |
|
|
|
3,240,000 |
|
|
|
3,375,000 |
|
|
|
6,750,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,000,000 |
|
|
$ |
|
|
|
$ |
646,702 |
|
|
$ |
4,688,382 |
|
|
$ |
5,335,084 |
|
|
$ |
32,335,084 |
|
The following table illustrates the total amount of available cash from operating surplus
that would be distributed to the unitholders and the general partner with respect to the quarter in
which the reset occurs. The table reflects that as a result of the reset there are 45,000,000
common units, no Class C units, 7,813,970 Class B units and 1,077,836 general partner units,
representing a 2% general partner interest, outstanding, and that the average distribution to each
common unit is $0.60. The number of Class B units was calculated by dividing (x) the $4,688,382
received by
the general partner in respect of its incentive distribution rights, or IDRs, as the average
of the amounts received by the general partner in respect of its incentive distribution rights for
the two quarters prior to the reset as shown in the table above by (y) the $0.60 of available cash
from operating surplus distributed to each common unit as the average distributed per common unit
for the two quarters prior to the reset.
II-44
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Partner Cash Distributions |
|
|
|
|
|
|
|
Common |
|
|
After Reset |
|
|
|
|
|
|
|
Unitholders |
|
|
|
|
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Distribution |
|
|
Cash |
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per Unit |
|
|
Distributions |
|
|
Class B |
|
|
Partner |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
After Reset |
|
|
After Reset |
|
|
Units |
|
|
Interest |
|
|
IDRs |
|
|
Total |
|
|
Distribution |
|
Minimum Quarterly
Distribution |
|
$ 0.60 |
|
|
$ |
27,000,000 |
|
|
$ |
4,688,382 |
|
|
$ |
646,702 |
|
|
$ |
|
|
|
$ |
5,335,084 |
|
|
$ |
32,335,084 |
|
First Target Distribution |
|
up to $0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Target Distribution |
|
above $0.69 up to $0.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Target Distribution |
|
above $0.75 up to $0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereafter |
|
above $0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,000,000 |
|
|
$ |
4,688,382 |
|
|
$ |
646,702 |
|
|
$ |
|
|
|
$ |
5,335,084 |
|
|
$ |
32,335,084 |
|
Our general partner will be entitled to cause the minimum quarterly distribution amount
and the target distribution levels to be reset on more than one occasion, provided that it may not
make a reset election except at a time when it has received incentive distributions for the prior
four consecutive fiscal quarters based on the highest level of incentive distributions that it is
entitled to receive under our partnership agreement.
Percentage Allocations of Available Cash from Operating Surplus
The following table illustrates the percentage allocations of available cash from operating
surplus between the unitholders and our general partner based on the specified target distribution
levels. The amounts set forth under Marginal Percentage Interest in Distributions are the
percentage interests of our general partner and the unitholders in any available cash from
operating surplus we distribute up to and including the corresponding amount in the column Total
Quarterly Distribution Per Unit, until available cash from operating surplus we distribute reaches
the next target distribution level, if any. The percentage interests shown for the unitholders and
the general partner for the minimum quarterly distribution are also applicable to quarterly
distribution amounts that are less than the minimum quarterly distribution. The percentage
interests set forth below for our general partner include its 2% general partner interest and
assume our general partner has contributed any additional capital to maintain its 2% general
partner interest and has not transferred its incentive distribution rights.
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Total Quarterly |
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Marginal Percentage |
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Distribution |
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Interest in |
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Per Unit |
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Distributions |
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General |
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Target Amount |
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Unitholders |
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Partner |
Minimum Quarterly Distribution |
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$0.35 |
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98% |
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2% |
First Target Distribution |
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up to $0.4025 |
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98% |
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2% |
Second Target Distribution |
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above $0.4025 up to $0.4375 |
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85% |
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15% |
Third Target Distribution |
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above $0.4375 up to $0.525 |
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75% |
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25% |
Thereafter |
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above $0.525 |
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50% |
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50% |
Distributions from Capital Surplus
How Distributions from Capital Surplus Will Be Made. Our partnership agreement requires that
we make distributions of available cash from capital surplus, if any, in the following manner:
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first, 98% to all unitholders, pro rata, and 2% to the general partner, until we
distribute for each common unit that was issued in our initial public offering, an amount
of available cash from capital surplus equal to the initial public offering price; |
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second, 98% to the common unitholders, pro rata, and 2% to the general partner, until we
distribute for each common unit, an amount of available cash from capital surplus equal to
any unpaid arrearages in payment of the minimum quarterly distribution on the common units;
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thereafter, we will make all distributions of available cash from capital surplus as if
they were from operating surplus. |
II-45
Effect of a Distribution from Capital Surplus. Our partnership agreement treats a
distribution of capital surplus as the repayment of the initial unit price from this initial public
offering, which is a return of capital. The initial public offering price less any distributions of
capital surplus per unit is referred to as the unrecovered initial unit price. Each time a
distribution of capital surplus is made, the minimum quarterly distribution and the target
distribution levels will be reduced in the same proportion as the corresponding reduction in the
unrecovered initial unit price. Because distributions of capital surplus will reduce the minimum
quarterly distribution, after any of these distributions are made, it may be easier for the general
partner to receive incentive distributions and for the subordinated units to convert into common
units. However, any distribution of capital surplus before the unrecovered initial unit price is
reduced to zero cannot be applied to the payment of the minimum quarterly distribution or any
arrearages.
Once we distribute capital surplus on a unit issued in our initial public offering in an
amount equal to the initial unit price, our partnership agreement specifies that the minimum
quarterly distribution and the target distribution levels will be reduced to zero. Our partnership
agreement specifies that we then make all future distributions from operating surplus, with 50%
being paid to the holders of units and 50% to the general partner. The percentage interests shown
for our general partner include its 2% general partner interest and assume the general partner has
not transferred the incentive distribution rights.
Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels
In addition to adjusting the minimum quarterly distribution and target distribution levels to
reflect a distribution of capital surplus, if we combine our units into fewer units or subdivide
our units into a greater number of units, our partnership agreement specifies that the following
items will be proportionately adjusted:
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the minimum quarterly distribution; |
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target distribution levels; |
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the unrecovered initial unit price; |
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the number of common units issuable during the subordination period without a unitholder vote; and |
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the number of common units into which a subordinated unit is convertible. |
For example, if a two-for-one split of the common units should occur, the minimum quarterly
distribution, the target distribution levels and the unrecovered initial unit price would each be
reduced to 50% of its initial level, the number of common units issuable during the subordination
period without unitholder vote would double and each subordinated unit would be convertible into
two common units. Our partnership agreement provides that we not make any adjustment by reason of
the issuance of additional units for cash or property.
In addition, if legislation is enacted or if existing law is modified or interpreted by a
governmental taxing authority, so that we become taxable as a corporation or otherwise subject to
taxation as an entity for federal, state or local income tax purposes, our partnership agreement
specifies that the minimum quarterly distribution and the target distribution levels for each
quarter will be reduced by multiplying each distribution level by a fraction, the numerator of
which is available cash for that quarter and the denominator of which is the sum of available cash
for that quarter plus the general partners estimate of our aggregate liability for the quarter for
such income taxes payable by reason of such legislation or interpretation. To the extent that the
actual tax liability differs from the estimated tax liability for any quarter, the difference will
be accounted for in subsequent quarters.
Distributions of Cash Upon Liquidation
General. If we dissolve in accordance with the partnership agreement, we will sell or
otherwise dispose of our assets in a process called liquidation. We will first apply the proceeds
of liquidation to the payment of our creditors. We will distribute any remaining proceeds to the
unitholders and the general partner, in accordance with their capital
account balances, as adjusted to reflect any gain or loss upon the sale or other disposition
of our assets in liquidation.
II-46
The allocations of gain and loss upon liquidation are intended, to the extent possible, to
entitle the holders of outstanding common units to a preference over the holders of outstanding
subordinated units upon our liquidation, to the extent required to permit common unitholders to
receive their unrecovered initial unit price plus the minimum quarterly distribution for the
quarter during which liquidation occurs plus any unpaid arrearages in payment of the minimum
quarterly distribution on the common units. However, there may not be sufficient gain upon our
liquidation to enable the holders of common units to fully recover all of these amounts, even
though there may be cash available for distribution to the holders of subordinated units. Any
further net gain recognized upon liquidation will be allocated in a manner that takes into account
the incentive distribution rights of the general partner.
Manner of Adjustments for Gain. The manner of the adjustment for gain is set forth in the
partnership agreement. If our liquidation occurs before the end of the subordination period, we
will allocate any gain to the partners in the following manner:
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first, to the general partner and the holders of units who have negative balances in
their capital accounts to the extent of and in proportion to those negative balances; |
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second, 98% to the common and Class C unitholders, pro rata, and 2% to the general
partner, until the capital account for each common and Class C unit is equal to the sum of:
(1) the unrecovered initial unit price; (2) the amount of the minimum quarterly
distribution for the quarter during which our liquidation occurs; and (3) any unpaid
arrearages in payment of the minimum quarterly distribution; |
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third, 98% to the subordinated unitholders, pro rata, and 2% to the general partner
until the capital account for each subordinated unit is equal to the sum of: (1) the
unrecovered initial unit price; and (2) the amount of the minimum quarterly distribution
for the quarter during which our liquidation occurs; |
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fourth, 98% to all unitholders, pro rata, and 2% to the general partner, until we
allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the
first target distribution per unit over the minimum quarterly distribution per unit for
each quarter of our existence; less (2) the cumulative amount per unit of any distributions
of available cash from operating surplus in excess of the minimum quarterly distribution
per unit that we distributed 98% to the unitholders, pro rata, and 2% to the general
partner, for each quarter of our existence; |
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fifth, 85% to all unitholders, pro rata, and 15% to the general partner, until we
allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the
second target distribution per unit over the first target distribution per unit for each
quarter of our existence; less (2) the cumulative amount per unit of any distributions of
available cash from operating surplus in excess of the first target distribution per unit
that we distributed 85% to the unitholders, pro rata, and 15% to the general partner for
each quarter of our existence; |
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sixth, 75% to all unitholders, pro rata, and 25% to the general partner, until we
allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the
third target distribution per unit over the second target distribution per unit for each
quarter of our existence; less (2) the cumulative amount per unit of any distributions of
available cash from operating surplus in excess of the second target distribution per unit
that we distributed 75% to the unitholders, pro rata, and 25% to the general partner for
each quarter of our existence; and |
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thereafter, 50% to all unitholders, pro rata, and 50% to the general partner. |
The percentage interests set forth above for our general partner include its 2% general
partner interest and assume the general partner has not transferred the incentive distribution
rights.
If the liquidation occurs after the end of the subordination period, the distinction between
common units and
subordinated units will disappear, so that clause (3) of the second bullet point above and all
of the third bullet point above will no longer be applicable.
II-47
Manner of Adjustments for Losses. If our liquidation occurs before the end of the
subordination period, we will generally allocate any loss to the general partner and the
unitholders in the following manner:
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first, 98% to holders of subordinated units in proportion to the positive balances in
their capital accounts and 2% to the general partner, until the capital accounts of the
subordinated unitholders have been reduced to zero; |
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second, 98% to the holders of common units and Class C units in proportion to the
positive balances in their capital accounts and 2% to the general partner, until the
capital accounts of the common unitholders have been reduced to zero; and |
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thereafter, 100% to the general partner. |
If the liquidation occurs after the end of the subordination period, the distinction between
common units and Class C units and subordinated units will disappear, so that all of the first
bullet point above will no longer be applicable.
Adjustments to Capital Accounts. Our partnership agreement requires that we make adjustments
to capital accounts upon the issuance of additional units. In this regard, our partnership
agreement specifies that we allocate any unrealized and, for tax purposes, unrecognized gain or
loss resulting from the adjustments to the unitholders and the general partner in the same manner
as we allocate gain or loss upon liquidation. In the event that we make positive adjustments to the
capital accounts upon the issuance of additional units, our partnership agreement requires that we
allocate any later negative adjustments to the capital accounts resulting from the issuance of
additional units or upon our liquidation in a manner which results, to the extent possible, in the
general partners capital account balances equaling the amount which they would have been if no
earlier positive adjustments to the capital accounts had been made.
II-48
DESCRIPTION OF DEBT SECURITIES
General
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The debt securities will be: |
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our direct general obligations; |
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either senior debt securities or subordinated debt securities; and |
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issued under separate indentures among us and a trustee. |
DCP Midstream Partners, LP may issue debt securities in one or more series, and DCP Midstream
Partners Finance Corp. may be a co-issuer of one or more series of debt securities. DCP Midstream
Partners Finance Corp. was incorporated under the laws of the State
of Delaware on April 18,
2007, is wholly-owned by DCP Midstream Partners, LP, and has no material assets or any liabilities
other than as a co-issuer of debt securities. Its activities will be limited to co-issuing debt
securities and engaging in other activities incidental thereto. When used in this section
Description of Debt Securities, the terms we, us, our and issuers refer jointly to DCP
Midstream Partners, LP and DCP Midstream Partners Finance Corp., and the terms DCP Midstream
Partners, LP and DCP Midstream Partners Finance refer strictly to DCP Midstream Partners, LP and
DCP Midstream Partners Finance Corp., respectively.
If we offer senior debt securities, we will issue them under a senior indenture. If we issue
subordinated debt securities, we will issue them under a subordinated indenture. The trustee under
each indenture (the Trustee) will be named in the applicable prospectus supplement. A form of
each indenture is filed as an exhibit to the registration statement of which this prospectus is a
part. We have not restated either indenture in its entirety in this description. You should read
the relevant indenture because it, and not this description, controls your rights as holders of the
debt securities. Capitalized terms used in the summary have the meanings specified in the
indentures.
Specific Terms of Each Series of Debt Securities in the Prospectus Supplement
A prospectus supplement and a supplemental indenture or authorizing resolutions relating to
any series of debt securities being offered will include specific terms relating to the offering.
These terms will include some or all of the following:
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whether DCP Midstream Partners Finance will be a co-issuer of the debt securities; |
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the guarantors of the debt securities, if any; |
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whether the debt securities are senior or subordinated debt securities; |
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the title of the debt securities; |
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the total principal amount of the debt securities; |
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the assets, if any, that are pledged as security for the payment of the debt securities; |
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whether we will issue the debt securities in individual certificates to each holder
in registered form, or in the form of temporary or permanent global securities held by
a depository on behalf of holders; |
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the prices at which we will issue the debt securities; |
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the portion of the principal amount that will be payable if the maturity of the debt
securities is accelerated; |
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the currency or currency unit in which the debt securities will be payable, if not U.S. dollars; |
II-49
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the dates on which the principal of the debt securities will be payable; |
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the interest rate that the debt securities will bear and the interest payment dates
for the debt securities; |
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any conversion or exchange provisions; |
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any optional redemption provisions; |
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any sinking fund or other provisions that would obligate us to repurchase or
otherwise redeem the debt securities; |
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any changes to or additional events of default or covenants; and |
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any other terms of the debt securities. |
We may offer and sell debt securities, including original issue discount debt securities, at a
substantial discount below their principal amount. The prospectus supplement will describe special
U.S. federal income tax and any other considerations applicable to those securities. In addition,
the prospectus supplement may describe certain special U.S. federal income tax or other
considerations applicable to any debt securities that are denominated in a currency other than U.S.
dollars.
Guarantees
If specified in the prospectus supplement respecting a series of debt securities, the
subsidiaries of DCP Midstream Partners, LP specified in the prospectus supplement will
unconditionally guarantee to each holder and the Trustee, on a joint and several basis, the full
and prompt payment of principal of, premium, if any, and interest on the debt securities of that
series when and as the same become due and payable, whether at fixed maturity, upon redemption or
repurchase, by declaration of acceleration or otherwise. If a series of debt securities is
guaranteed, such series will be guaranteed by all subsidiaries other than minor subsidiaries as
such term is interpreted in securities regulations governing financial reporting for guarantors.
The prospectus supplement will describe any limitation on the maximum amount of any particular
guarantee and the conditions under which guarantees may be released.
The guarantees will be general obligations of the guarantors. Guarantees of subordinated debt
securities will be subordinated to the Senior Indebtedness of the guarantors on the same basis as
the subordinated debt securities are subordinated to the Senior Indebtedness of DCP Midstream
Partners, LP.
Consolidation, Merger or Asset Sale
Each indenture will, in general, allow us to consolidate or merge with or into another
domestic entity. It will also allow each issuer to sell, lease, transfer or otherwise dispose of
all or substantially all of its assets to another domestic entity. If this happens, the remaining
or acquiring entity must assume all of the issuers responsibilities and liabilities under the
indenture including the payment of all amounts due on the debt securities and performance of the
issuers covenants in the indenture.
However, each indenture will impose certain requirements with respect to any consolidation or
merger with or into an entity, or any sale, lease, transfer or other disposition of all or
substantially all of an issuers assets, including:
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the remaining or acquiring entity must be organized under the laws of the United
States, any state or the District of Columbia; provided that DCP Midstream Partners
Finance may not merge, amalgamate or consolidate with or into another entity other than
a corporation satisfying such requirement for so long as DCP Midstream Partners, LP is
not a corporation; |
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the remaining or acquiring entity must assume the issuers obligations under the
indenture; and |
II-50
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immediately after giving effect to the transaction, no Default or Event of Default
(as defined under Events of Default and Remedies below) may exist. |
The remaining or acquiring entity will be substituted for the issuer in the indenture with the
same effect as if it had been an original party to the indenture, and, except in the case of a
lease of all or substantially all of its assets, the issuer will be relieved from any further
obligations under the indenture.
No Protection in the Event of a Change of Control
Unless otherwise set forth in the prospectus supplement, the debt securities will not contain
any provisions that protect the holders of the debt securities in the event of a change of control
of us or in the event of a highly leveraged transaction, whether or not such transaction results in
a change of control of us.
Modification of Indentures
We may supplement or amend an indenture if the holders of a majority in aggregate principal
amount of the outstanding debt securities of all series issued under the indenture affected by the
supplement or amendment consent to it. Further, the holders of a majority in aggregate principal
amount of the outstanding debt securities of any series may waive past defaults under the indenture
and compliance by us with our covenants with respect to the debt securities of that series only.
Those holders may not, however, waive any default in any payment on any debt security of that
series or compliance with a provision that cannot be supplemented or amended without the consent of
each holder affected. Without the consent of each outstanding debt security affected, no
modification of the indenture or waiver may:
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reduce the principal amount of debt securities whose holders must consent to an
amendment, supplement or waiver; |
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reduce the principal of or change the fixed maturity of any debt security; |
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reduce or waive the premium payable upon redemption or alter or waive the provisions
with respect to the redemption of the debt securities (except as may be permitted in
the case of a particular series of debt securities); |
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reduce the rate of or change the time for payment of interest on any debt security; |
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waive a Default or an Event of Default in the payment of principal of or premium, if
any, or interest on the debt securities (except a rescission of acceleration of the
debt securities by the holders of at least a majority in aggregate principal amount of
the debt securities and a waiver of the payment default that resulted from such
acceleration); |
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except as otherwise permitted under the indenture, release any security that may
have been granted with respect to the debt securities; |
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make any debt security payable in currency other than that stated in the debt
securities; |
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in the case of any subordinated debt security, make any change in the subordination
provisions that adversely affects the rights of any holder under those provisions; |
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make any change in the provisions of the indenture relating to waivers of past
Defaults or the rights of holders of debt securities to receive payments of principal
of or premium, if any, or interest on the debt securities; |
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waive a redemption payment with respect to any debt security (except as may be
permitted in the case of a particular series of debt securities); |
II-51
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except as otherwise permitted in the indenture, release any guarantor from its
obligations under its guarantee or the indenture or change any guarantee in any manner
that would adversely affect the rights of holders; or |
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make any change in the preceding amendment, supplement and waiver provisions (except
to increase any percentage set forth therein). |
We may supplement or amend an indenture without the consent of any holders of the debt
securities in certain circumstances, including:
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to establish the form of terms of any series of debt securities; |
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to cure any ambiguity, defect or inconsistency; |
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to provide for uncertificated notes in addition to or in place of certified notes; |
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to provide for the assumption of an issuers or guarantors obligations to holders
of debt securities in the case of a merger or consolidation or disposition of all or
substantially all of such issuers or guarantors assets; |
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in the case of any subordinated debt security, to make any change in the
subordination provisions that limits or terminates the benefits applicable to any
holder of Senior Indebtedness of DCP Midstream Partners, LP; |
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to add or release guarantors pursuant to the terms of the indenture; |
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to make any changes that would provide any additional rights or benefits to the
holders of debt securities or that do not, taken as a whole, adversely affect the
rights under the indenture of any holder of debt securities; |
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to comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; |
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to evidence or provide for the acceptance of appointment under the indenture of a
successor Trustee; |
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to add any additional Events of Default; or |
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to secure the debt securities and/or the guarantees. |
Events of Default and Remedies
Event of Default, when used in an indenture, will mean any of the following with respect to
the debt securities of any series:
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failure to pay when due the principal of or any premium on any debt security of that series; |
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failure to pay, within 30 days of the due date, interest on any debt security of that series; |
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failure to pay when due any sinking fund payment with respect to any debt securities
of that series; |
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failure on the part of the issuers to comply with the covenant described under
Consolidation, Merger or Asset Sale; |
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failure to perform any other covenant in the indenture that continues for 60 days
after written notice is given to the issuers; |
II-52
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certain events of bankruptcy, insolvency or reorganization of an issuer; or |
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any other Event of Default provided under the terms of the debt securities of that series. |
An Event of Default for a particular series of debt securities will not necessarily constitute
an Event of Default for any other series of debt securities issued under an indenture. The Trustee
may withhold notice to the holders of debt securities of any default (except in the payment of
principal, premium, if any, or interest) if it considers such withholding of notice to be in the
best interests of the holders.
If an Event of Default described in the sixth bullet point above occurs, the entire principal
of, premium, if any, and accrued interest on, all debt securities then outstanding will be due and
payable immediately, without any declaration or other act on the part of the Trustee or any
holders. If any other Event of Default for any series of debt securities occurs and continues, the
Trustee or the holders of at least 25% in aggregate principal amount of the debt securities of the
series may declare the entire principal of, and accrued interest on, all the debt securities of
that series to be due and payable immediately. If this happens, subject to certain conditions, the
holders of a majority in the aggregate principal amount of the debt securities of that series can
rescind the declaration.
Other than its duties in case of a default, a Trustee is not obligated to exercise any of its
rights or powers under either indenture at the request, order or direction of any holders, unless
the holders offer the Trustee reasonable security or indemnity. If they provide this reasonable
security or indemnification, the holders of a majority in aggregate principal amount of any series
of debt securities may direct the time, method and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any power conferred upon the Trustee, for that series of
debt securities.
No Limit on Amount of Debt Securities
Neither indenture will limit the amount of debt securities that we may issue, unless we
indicate otherwise in a prospectus supplement. Each indenture will allow us to issue debt
securities of any series up to the aggregate principal amount that we authorize.
Registration of Notes
We will issue debt securities of a series only in registered form, without coupons, unless
otherwise indicated in the prospectus supplement.
Minimum Denominations
Unless the prospectus supplement states otherwise, the debt securities will be issued only in
principal amounts of $1,000 each or integral multiples of $1,000.
No Personal Liability
None of the past, present or future partners, incorporators, managers, members, directors,
officers, employees, unitholders or stockholders of either issuer, the general partner of DCP
Midstream Partners, LP or any guarantor will have any liability for the obligations of the issuers
or any guarantors under either indenture or the debt securities or for any claim based on such
obligations or their creation. Each holder of debt securities by accepting a debt security waives
and releases all such liability. The waiver and release are part of the consideration for the
issuance of the debt securities. The waiver may not be effective under federal securities laws,
however, and it is the view of the SEC that such a waiver is against public policy.
Payment and Transfer
The Trustee will initially act as paying agent and registrar under each indenture. The issuers
may change the paying agent or registrar without prior notice to the holders of debt securities,
and the issuers or any of their subsidiaries may act as paying agent or registrar.
II-53
If a holder of debt securities has given wire transfer instructions to the issuers, the
issuers will make all payments on the debt securities in accordance with those instructions. All
other payments on the debt securities will be made at the corporate trust office of the Trustee,
unless the issuers elect to make interest payments by check mailed to the holders at their
addresses set forth in the debt security register.
The Trustee and any paying agent will repay to us upon request any funds held by them for
payments on the debt securities that remain unclaimed for two years after the date upon which that
payment has become due. After payment to us, holders entitled to the money must look to us for
payment as general creditors.
Exchange, Registration and Transfer
Debt securities of any series will be exchangeable for other debt securities of the same
series, the same total principal amount and the same terms but in different authorized
denominations in accordance with the indenture. Holders may present debt securities for exchange or
registration of transfer at the office of the registrar. The registrar will effect the transfer or
exchange when it is satisfied with the documents of title and identity of the person making the
request. We will not charge a service charge for any registration of transfer or exchange of the
debt securities. We may, however, require the payment of any tax or other governmental charge
payable for that registration.
We will not be required:
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to issue, register the transfer of, or exchange debt securities of a series either
during a period beginning 15 business days prior to the selection of debt securities of
that series for redemption and ending on the close of business on the day of mailing of
the relevant notice of redemption or repurchase, or between a record date and the next
succeeding interest payment date; or |
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to register the transfer of or exchange any debt security called for redemption or
repurchase, except the unredeemed portion of any debt security we are redeeming or
repurchasing in part. |
Provisions Relating only to the Senior Debt Securities
The senior debt securities will rank equally in right of payment with all of our other
unsubordinated debt. The senior debt securities will be effectively subordinated, however, to all
of our secured debt to the extent of the value of the collateral for that debt. We will disclose
the amount of our secured debt in the prospectus supplement.
Provisions Relating only to the Subordinated Debt Securities
Subordinated Debt Securities Subordinated to Senior Indebtedness
The subordinated debt securities will rank junior in right of payment to all of the Senior
Indebtedness of DCP Midstream Partners, LP. Senior Indebtedness will be defined in a
supplemental indenture or authorizing resolutions respecting any issuance of a series of
subordinated debt securities, and the definition will be set forth in the prospectus supplement.
Payment Blockages
The subordinated indenture will provide that no payment of principal, interest and any premium
on the subordinated debt securities may be made in the event:
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we or our property is involved in any voluntary or involuntary liquidation or
bankruptcy; |
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we fail to pay the principal, interest, any premium or any other amounts on any
Senior Indebtedness of DCP Midstream Partners, LP within any applicable grace period or
the maturity of such Senior Indebtedness is accelerated following any other default,
subject to certain limited exceptions set forth in the subordinated indenture; or |
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any other default on any Senior Indebtedness of DCP Midstream Partners, LP occurs
that permits immediate acceleration of its maturity, in which case a payment blockage
on the subordinated debt securities will be imposed for a maximum of 179 days at any
one time. |
No Limitation on Amount of Senior Debt
The subordinated indenture will not limit the amount of Senior Indebtedness that DCP Midstream
Partners, LP may incur, unless otherwise indicated in the prospectus supplement.
Book Entry, Delivery and Form
The debt securities of a particular series may be issued in whole or in part in the form of
one or more global certificates that will be deposited with the Trustee as custodian for The
Depository Trust Company, New York, New York (DTC) This means that we will not issue certificates
to each holder. Instead, one or more global debt securities will be issued to DTC, who will keep a
computerized record of its participants (for example, your broker) whose clients have purchased the
debt securities. The participant will then keep a record of its clients who purchased the debt
securities. Unless it is exchanged in whole or in part for a certificated debt security, a global
debt security may not be transferred, except that DTC, its nominees and their successors may
transfer a global debt security as a whole to one another.
Beneficial interests in global debt securities will be shown on, and transfers of global debt
securities will be made only through, records maintained by DTC and its participants.
DTC has provided us the following information: DTC is a limited-purpose trust company
organized under the New York Banking Law, a banking organization within the meaning of the New
York Banking Law, a member of the United States Federal Reserve System, a clearing corporation
within the meaning of the New York Uniform Commercial Code and a clearing agency registered under
the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its
participants (Direct Participants) deposit with DTC. DTC also records the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in deposited securities
through computerized records for Direct Participants accounts. This eliminates the need to
exchange certificates. Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
DTCs book-entry system is also used by other organizations such as securities brokers and
dealers, banks and trust companies that work through a Direct Participant. The rules that apply to
DTC and its participants are on file with the SEC.
DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
The American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
We will wire all payments on the global debt securities to DTCs nominee. We and the Trustee
will treat DTCs nominee as the owner of the global debt securities for all purposes. Accordingly,
we, the Trustee and any paying agent will have no direct responsibility or liability to pay amounts
due on the global debt securities to owners of beneficial interests in the global debt securities.
It is DTCs current practice, upon receipt of any payment on the global debt securities, to
credit Direct Participants accounts on the payment date according to their respective holdings of
beneficial interests in the global debt securities as shown on DTCs records. In addition, it is
DTCs current practice to assign any consenting or voting rights to Direct Participants whose
accounts are credited with debt securities on a record date, by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global debt securities, and voting by
participants, will be governed by the customary practices between the participants and owners of
beneficial interests, as is the case with debt securities held for the account of customers
registered in street name. However, payments will be the responsibility of the participants and
not of DTC, the Trustee or us.
Debt securities represented by a global debt security will be exchangeable for certificated
debt securities with the same terms in authorized denominations only if:
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DTC notifies us that it is unwilling or unable to continue as depositary or if DTC
ceases to be a clearing agency registered under applicable law and in either event a
successor depositary is not appointed by us within 90 days; or |
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an Event of Default occurs and DTC notifies the Trustee of its decision to exchange
the global debt security for certificated debt securities. |
Satisfaction and Discharge; Defeasance
Each indenture will be discharged and will cease to be of further effect as to all outstanding
debt securities of any series issued thereunder, when:
(a) either:
(1) all outstanding debt securities of that series that have been authenticated (except
lost, stolen or destroyed debt securities that have been replaced or paid and debt securities
for whose payment money has theretofore been deposited in trust and thereafter repaid to us)
have been delivered to the Trustee for cancellation; or
(2) all outstanding debt securities of that series that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the giving of a notice of
redemption or otherwise or will become due and payable at their stated maturity within one year
or are to be called for redemption within one year under arrangements satisfactory to the
Trustee and in any case we have irrevocably deposited or caused to be irrevocably deposited with
the Trustee as trust funds in trust cash in U.S. dollars, non-callable U.S. Government
Obligations or a combination thereof, in such amounts as will be sufficient, without
consideration of any reinvestment of interest, to pay and discharge the entire indebtedness of
such debt securities not delivered to the Trustee for cancellation, for principal, premium, if
any, and accrued interest to the date of such deposit (in the case of debt securities that have
been due and payable) or the stated maturity or redemption date;
(b) we have paid or caused to be paid all other sums payable by us under the indenture; and
(c) we have delivered an officers certificate and an opinion of counsel to the Trustee
stating that all conditions precedent to satisfaction and discharge have been satisfied.
The debt securities of a particular series will be subject to legal or covenant defeasance to
the extent, and upon the terms and conditions, set forth in the prospectus supplement.
Governing Law
Each indenture and all of the debt securities will be governed by the laws of the State of New
York.
The Trustee
We will enter into the indentures with a Trustee that is qualified to act under the Trust
Indenture Act of 1939, as amended, and with any other trustees chosen by us and appointed in a
supplemental indenture for a particular series of debt securities. We may maintain a banking
relationship in the ordinary course of business with our trustee and one or more of its affiliates.
Resignation or Removal of Trustee
If the Trustee has or acquires a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee must either eliminate its conflicting interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and the
applicable indenture. Any resignation will require the appointment of a successor trustee under the
applicable indenture in accordance with the terms and conditions of such indenture.
The Trustee may resign or be removed by us with respect to one or more series of debt
securities and a successor Trustee may be appointed to act with respect to any such series. The
holders of a majority in aggregate
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principal amount of the debt securities of any series may remove the Trustee with respect to
the debt securities of such series.
Limitations on Trustee if it is Our Creditor
Each indenture will contain certain limitations on the right of the Trustee, in the event that
it becomes a creditor of an issuer or a guarantor, to obtain payment of claims in certain cases, or
to realize on certain property received in respect of any such claim as security or otherwise.
Annual Trustee Report to Holders of Debt Securities
The Trustee is required to submit an annual report to the holders of the debt securities
regarding, among other things, the Trustees eligibility to serve as such, the priority of the
Trustees claims regarding certain advances made by it, and any action taken by the Trustee
materially affecting the debt securities.
Certificates and Opinions to be Furnished to Trustee
Each indenture will provide 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 certain of our officers and an opinion of
counsel (who may be our counsel) stating that, in the opinion of the signers, all conditions
precedent to such action have been complied with by us.
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MATERIAL TAX CONSEQUENCES
This section is a summary of the material tax consequences that may be relevant to prospective
unitholders who are individual citizens or residents of the United States and, unless otherwise
noted in the following discussion, is the opinion of Vinson & Elkins L.L.P., counsel to our general
partner and us, insofar as it relates to legal conclusions with respect to matters of United States
federal income tax law. This section is based upon current provisions of the Internal Revenue
Code, existing and proposed regulations to the extent noted and current administrative rulings and
court decisions, all of which are subject to change. Later changes in these authorities may cause
the tax consequences to vary substantially from the consequences described below. Unless the
context otherwise requires, references in this section to us or we are to DCP Midstream
Partners and the operating partnership.
This section does not address all federal income tax matters that affect us or the
unitholders. Furthermore, this section focuses on unitholders who are individual citizens or
residents of the United States and has only limited application to corporations, estates, trusts,
non-resident aliens or other unitholders subject to specialized tax treatment, such as tax-exempt
institutions, foreign persons, individual retirement accounts (IRAs), real estate investment trusts
(REITs) or mutual funds. Accordingly, each prospective unitholder is urged to consult, and depend
on, his own tax advisor in analyzing the federal, state, local and foreign tax consequences
particular to him of the ownership or disposition of common units.
All statements as to matters of law and legal conclusions, but not as to factual matters,
contained in this section, unless otherwise noted, are the opinion of Vinson & Elkins L.L.P. and
are based on the accuracy of the representations made by us.
No ruling has been or will be requested from the IRS regarding any matter that affects us or
prospective unitholders. Instead, we will rely on opinions and advice of Vinson & Elkins L.L.P.
Unlike a ruling, an opinion of counsel represents only that counsels best legal judgment and does
not bind the IRS or the courts. Accordingly, the opinions and statements made herein may not be
sustained by a court if contested by the IRS. Any contest of this sort with the IRS may materially
and adversely impact the market for the common units and the prices at which common units trade.
In addition, the costs of any contest with the IRS, principally legal, accounting and related fees,
will result in a reduction in cash available for distribution to our unitholders and our general
partner and thus will be borne directly or indirectly by the unitholders and the general partner.
Furthermore, the tax treatment of us, or of an investment in us, may be significantly modified by
future legislative or administrative changes or court decisions. Any modifications may or may not
be retroactively applied.
For the reasons described below, Vinson & Elkins L.L.P. has not rendered an opinion with
respect to the following specific federal income tax issues:
(1) the treatment of a unitholder whose common units are loaned to a short seller to cover
a short sale of common units (please read Tax Consequences of Unit Ownership Treatment of
Short Sales);
(2) whether our monthly convention for allocating taxable income and losses is permitted by
existing Treasury Regulations (please read Disposition of Common Units Allocations Between
Transferors and Transferees); and
(3) whether our method for depreciating Section 743 adjustments is sustainable in certain
cases (please read Tax Consequences of Unit Ownership Section 754 Election).
Partnership Status
A partnership is not a taxable entity and incurs no federal income tax liability. Instead,
each partner of a partnership is required to take into account his share of items of income, gain,
loss and deduction of the partnership in computing his federal income tax liability, regardless of
whether cash distributions are made to him by the partnership. Distributions by a partnership to a
partner are generally not taxable to the partner unless the amount of cash distributed to him is in
excess of his adjusted basis in his partnership interest.
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Section 7704 of the Internal Revenue Code provides that publicly-traded partnerships will, as
a general rule, be taxed as corporations. However, an exception, referred to as the Qualifying
Income Exception, exists with respect to publicly-traded partnerships of which 90% or more of the
gross income for every taxable year consists of qualifying income. Qualifying income includes
income and gains derived from the transportation, storage and processing of crude oil, natural gas
and products thereof and fertilizer. Other types of qualifying income include interest (other than
from a financial business), dividends, gains from the sale of real property and gains from the sale
or other disposition of capital assets held for the production of income that otherwise constitutes
qualifying income. We estimate that less than 7% of our current gross income is not qualifying
income; however, this estimate could change from time to time. Based upon and subject to this
estimate, the factual representations made by us and the general partner and a review of the
applicable legal authorities, Vinson & Elkins L.L.P. is of the opinion that at least 90% of our
current gross income constitutes qualifying income.
No ruling has been or will be sought from the IRS and the IRS has made no determination as to
our status or the status of the operating partnership for federal income tax purposes or whether
our operations generate qualifying income under Section 7704 of the Internal Revenue Code.
Instead, we will rely on the opinion of Vinson & Elkins L.L.P. on such matters. It is the opinion
of Vinson & Elkins L.L.P. that, based upon the Internal Revenue Code, its regulations, published
revenue rulings and court decisions and the representations set forth below, we will be classified
as a partnership and our operating company will be disregarded as an entity separate from us for
federal income tax purposes.
In rendering its opinion, Vinson & Elkins L.L.P. has relied on factual representations made by
us and the general partner. The representations made by us and our general partner upon which
counsel has relied are:
(a) Neither we nor the operating company has elected or will elect to be treated as a
corporation; and
(b) For each taxable year, more than 90% of our gross income has been and will be income
that Vinson & Elkins L.L.P. has opined or will opine is qualifying income within the meaning
of Section 7704(d) of the Internal Revenue Code.
If we fail to meet the Qualifying Income Exception, other than a failure that is determined by
the IRS to be inadvertent and that is cured within a reasonable time after discovery, in which case
the IRS may also require us to make adjustments with respect to our unitholders or pay other
amounts, we will be treated as if we had transferred all of our assets, subject to liabilities, to
a newly formed corporation, on the first day of the year in which we fail to meet the Qualifying
Income Exception, in return for stock in that corporation, and then distributed that stock to the
unitholders in liquidation of their interests in us. This deemed contribution and liquidation
should be tax-free to unitholders and us so long as we, at that time, do not have liabilities in
excess of the tax basis of our assets. Thereafter, we would be treated as a corporation for
federal income tax purposes.
If we were treated as a corporation in any taxable year, either as a result of a failure to
meet the Qualifying Income Exception or otherwise, our items of income, gain, loss and deduction
would be reflected only on our tax return rather than being passed through to the unitholders, and
our net income would be taxed to us at corporate rates. In addition, any distribution made to a
unitholder would be treated as either taxable dividend income, to the extent of our current or
accumulated earnings and profits, or, in the absence of earnings and profits, a nontaxable return
of capital, to the extent of the unitholders tax basis in his common units, or taxable capital
gain, after the unitholders tax basis in his common units is reduced to zero. Accordingly,
taxation as a corporation would result in a material reduction in a unitholders cash flow and
after-tax return and thus would likely result in a substantial reduction of the value of the units.
The remainder of this section is based on Vinson & Elkins L.L.P.s opinion that we will be
classified as a partnership for federal income tax purposes.
Unitholders who have become limited partners of DCP Midstream Partners will be treated as
partners of DCP Midstream Partners for federal income tax purposes. Also:
(a) assignees who have executed and delivered transfer applications, and are awaiting
admission as limited partners, and
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(b) unitholders whose common units are held in street name or by a nominee and who have the
right to direct the nominee in the exercise of all substantive rights attendant to the ownership
of their common units,
will be treated as partners of DCP Midstream Partners for federal income tax purposes.
As there is no direct or indirect controlling authority addressing the federal tax treatment
of assignees of common units who are entitled to execute and deliver transfer applications and
thereby become entitled to direct the exercise of attendant rights, but who fail to execute and
deliver transfer applications, the opinion of Vinson & Elkins L.L.P. does not extend to these
persons. Furthermore, a purchaser or other transferee of common units who does not execute and
deliver a transfer application may not receive some federal income tax information or reports
furnished to record holders of common units unless the common units are held in a nominee or street
name account and the nominee or broker has executed and delivered a transfer application for those
common units.
A beneficial owner of common units whose units have been transferred to a short seller to
complete a short sale would appear to lose his status as a partner with respect to those units for
federal income tax purposes. Please read Tax Consequences of Unit Ownership Treatment of
Short Sales.
Income, gain, deductions or losses would not appear to be reportable by a unitholder who is
not a partner for federal income tax purposes, and any cash distributions received by a unitholder
who is not a partner for federal income tax purposes would therefore appear to be fully taxable as
ordinary income. These holders are urged to consult their own tax advisors with respect to their
status as partners in DCP Midstream Partners for federal income tax purposes.
Tax Consequences of Unit Ownership
Flow-Through of Taxable Income. We will not pay any federal income tax. Instead, each
unitholder will be required to report on his income tax return his share of our income, gains,
losses and deductions without regard to whether corresponding cash distributions are received by
him. Consequently, we may allocate income to a unitholder even if he has not received a cash
distribution. Each unitholder will be required to include in income his allocable share of our
income, gains, losses and deductions for our taxable year ending with or within his taxable year.
Our taxable year ends on December 31.
Treatment of Distributions. Cash distributions made by us to a unitholder generally will not
be taxable to him for federal income tax purposes to the extent of his tax basis in his common
units immediately before the distribution. Cash distributions made by us to a unitholder in an
amount in excess of his tax basis in his common units generally will be considered to be gain from
the sale or exchange of the common units, taxable in accordance with the rules described under
Disposition of Common Units below. To the extent that cash distributions made by us cause a
unitholders at risk amount to be less than zero at the end of any taxable year, he must
recapture any losses deducted in previous years. Please read Limitations on Deductibility of
Losses.
Any reduction in a unitholders share of our liabilities for which no partner, including the
general partner, bears the economic risk of loss, known as nonrecourse liabilities, will be
treated as a distribution of cash to that unitholder. A decrease in a unitholders percentage
interest in us because of our issuance of additional common units will decrease his share of our
nonrecourse liabilities, and thus will result in a corresponding deemed distribution of cash, which
may constitute a non-pro rata distribution. A non-pro rata distribution of money or property may
result in ordinary income to a unitholder, regardless of his tax basis in his common units, if the
distribution reduces the unitholders share of our unrealized receivables, including depreciation
recapture, and/or substantially appreciated inventory items, both as defined in Section 751 of
the Internal Revenue Code, and collectively, Section 751 Assets. To that extent, he will be
treated as having received his proportionate share of the Section 751 Assets and having exchanged
those assets with us in return for the non-pro rata portion of the actual distribution made to him.
This latter deemed exchange will generally result in the unitholders realization of ordinary
income. That income will equal the excess of (1) the non-pro rata portion of that distribution
over (2) the unitholders tax basis for the share of Section 751 Assets deemed relinquished in the
exchange.
Basis of Common Units. A unitholders initial tax basis for his common units will be the
amount he paid for the common units plus his share of our nonrecourse liabilities. That basis will
be increased by his share of our income and by any increases in his share of our nonrecourse
liabilities. That basis will be decreased, but not below zero, by
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distributions to him from us, by his share of our losses, by any decreases in his share of our
nonrecourse liabilities and by his share of our expenditures that are not deductible in computing
taxable income and are not required to be capitalized. A unitholder will have no share of our debt
that is recourse to the general partner, but will have a share, generally based on his share of
profits, of our nonrecourse liabilities. Please read Disposition of Common Units Recognition
of Gain or Loss.
Limitations on Deductibility of Losses. The deduction by a unitholder of his share of our
losses will be limited to the tax basis in his units and, in the case of an individual unitholder
or a corporate unitholder, if more than 50% of the value of the corporate unitholders stock is
owned directly or indirectly by or for five or fewer individuals or certain tax-exempt
organizations, to the amount for which the unitholder is considered to be at risk with respect to
our activities, if that is less than his tax basis. A unitholder must recapture losses deducted in
previous years to the extent that distributions cause his at-risk amount to be less than zero at
the end of any taxable year. Losses disallowed to a unitholder or recaptured as a result of these
limitations will carry forward and will be allowable as a deduction in a later year to the extent
that his tax basis or at-risk amount, whichever is the limiting factor, is subsequently increased.
Upon the taxable disposition of a unit, any gain recognized by a unitholder can be offset by losses
that were previously suspended by the at risk limitation but may not be offset by losses suspended
by the basis limitation. Any excess loss above that gain previously suspended by the at risk or
basis limitations is no longer utilizable.
In general, a unitholder will be at risk to the extent of his tax basis in his units,
excluding any portion of that basis attributable to his share of our nonrecourse liabilities,
reduced by any amount of money he borrows to acquire or hold his units, if the lender of those
borrowed funds owns an interest in us, is related to the unitholder or can look only to the units
for repayment, or any portion of that basis representing amounts otherwise protected against loss
because of a guarantee, stop loss agreement or other similar arrangement. A unitholders at-risk
amount will increase or decrease as the tax basis of the unitholders units increases or decreases,
other than tax basis increases or decreases attributable to increases or decreases in his share of
our nonrecourse liabilities.
The passive loss limitations generally provide that individuals, estates, trusts and some
closely-held corporations and personal service corporations are permitted to deduct losses from
passive activities, which are generally defined as trade or business activities in which the
taxpayer does not materially participate, only to the extent of the taxpayers income from those
passive activities. The passive loss limitations are applied separately with respect to each
publicly-traded partnership. Consequently, any passive losses we generate will only be available
to offset our passive income generated in the future and will not be available to offset income
from other passive activities or investments, including our investments or a unitholders
investments in other publicly-traded partnerships, or salary or active business income. Passive
losses that are not deductible because they exceed a unitholders share of income we generate may
generally be deducted in full when he disposes of his entire investment in us in a fully taxable
transaction with an unrelated party. Further, a unitholders share of our net income may be offset
by any suspended passive losses from that unitholders investment in us, but may not be offset by
that unitholders current or carryover losses from other passive activities, including those
attributable to other publicly traded partnerships.
The passive loss limitations are applied after other applicable limitations on deductions,
including the at-risk rules and the basis limitation.
Limitations on Interest Deductions. The deductibility of a non-corporate taxpayers
investment interest expense is generally limited to the amount of that taxpayers net investment
income. Investment interest expense includes:
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interest on indebtedness properly allocable to property held for investment; |
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our interest expense attributable to portfolio income; and |
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the portion of interest expense incurred to purchase or carry an interest in a
passive activity to the extent attributable to portfolio income. |
The computation of a unitholders investment interest expense will take into account interest
on any margin account borrowing or other loan incurred to purchase or carry a unit. Net investment
income includes gross income
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from property held for investment and amounts treated as portfolio income under the passive
loss rules, less deductible expenses, other than interest, directly connected with the production
of investment income, but generally does not include gains attributable to the disposition of
property held for investment. The IRS has indicated that net passive income earned by a
publicly-traded partnership will be treated as investment income to its unitholders. In addition,
the unitholders share of our portfolio income will be treated as investment income.
Entity-Level Collections. If we are required or elect under applicable law to pay any
federal, state or local income tax on behalf of any unitholder or the general partner or any former
unitholder, we are authorized to pay those taxes from our funds. That payment, if made, will be
treated as a distribution of cash to the unitholder on whose behalf the payment was made. If the
payment is made on behalf of a unitholder whose identity cannot be determined, we are authorized to
treat the payment as a distribution to all current unitholders. We are authorized to amend the
partnership agreement in the manner necessary to maintain uniformity of intrinsic tax
characteristics of units and to adjust later distributions, so that after giving effect to these
distributions, the priority and characterization of distributions otherwise applicable under the
partnership agreement is maintained as nearly as is practicable. Payments by us as described above
could give rise to an overpayment of tax on behalf of a unitholder in which event the unitholder
would be required to file a claim in order to obtain a credit or refund.
Allocation of Income, Gain, Loss and Deduction. In general, if we have a net profit, our
items of income, gain, loss and deduction will be allocated among the general partner and the
unitholders in accordance with their percentage interests in us. At any time that distributions
are made to the common units in excess of distributions to the subordinated units, or that
incentive distributions are made to the general partner, gross income will be allocated to the
recipients to the extent of those distributions. If we have a net loss for the entire year, that
amount of loss will be allocated first to the general partner and the unitholders in accordance
with their percentage interests in us to the extent of their positive capital accounts and then to
our general partner.
Specified items of our income, gain, loss and deduction will be allocated to account for the
difference between the tax basis and fair market value of our assets at the time of an offering,
referred to in this discussion as Contributed Property. The effect of these allocations to a
unitholder who purchases common units in an offering will be essentially the same as if the tax
basis of our assets were equal to their fair market value at the time of the offering. In the
event we issue additional common units or engage in certain other transactions in the future
reverse Section 704(c) allocations, similar to the Section 704(c) allocations described above,
will be made to all holders of partnership interests to account for the difference between the
book basis for purposes of maintaining capital accounts and the fair market value of all property
held by us at the time of the future transaction. In addition, items of recapture income will be
allocated to the extent possible to the unitholder who was allocated the deduction giving rise to
the treatment of that gain as recapture income in order to minimize the recognition of ordinary
income by other unitholders. Finally, although we do not expect that our operations will result in
the creation of negative capital accounts, if negative capital accounts nevertheless result, items
of our income and gain will be allocated in an amount and manner sufficient to eliminate the
negative balance as quickly as possible. An allocation of items of our income, gain, loss or
deduction, other than an allocation required by the Internal Revenue Code to eliminate the
difference between a partners book capital account, credited with the fair market value of
Contributed Property, and tax capital account, credited with the tax basis of Contributed
Property, referred to in this discussion as the Book-Tax Disparity, will generally be given
effect for federal income tax purposes in determining a partners share of an item of income, gain,
loss or deduction only if the allocation has substantial economic effect. In any other case, a
partners share of an item will be determined on the basis of his interest in us, which will be
determined by taking into account all the facts and circumstances, including:
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his relative contributions to us; |
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the interests of all the partners in profits and losses; |
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the interest of all the partners in cash flow; and |
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the rights of all the partners to distributions of capital upon liquidation. |
Vinson & Elkins L.L.P. is of the opinion that, with the exception of the issues described in
Section 754 Election and Disposition of Common Units Allocations Between Transferors and
Transferees, allocations
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under our partnership agreement will be given effect for federal income tax purposes in
determining a unitholders share of an item of income, gain, loss or deduction.
Treatment of Short Sales. A unitholder whose units are loaned to a short seller to cover a
short sale of units may be considered as having disposed of those units. If so, he would no longer
be treated for tax purposes as a partner with respect to those units during the period of the loan
and may recognize gain or loss from the disposition. As a result, during this period:
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any of our income, gain, loss or deduction with respect to those units would not be
reportable by the unitholder; |
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any cash distributions received by the unitholder as to those units would be fully taxable; and |
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all of these distributions would appear to be ordinary income. |
Vinson & Elkins L.L.P. has not rendered an opinion regarding the treatment of a unitholder
where common units are loaned to a short seller to cover a short sale of common units; therefore,
unitholders desiring to assure their status as partners and avoid the risk of gain recognition from
a loan to a short seller should modify any applicable brokerage account agreements to prohibit
their brokers from loaning their units. The IRS has announced that it is actively studying issues
relating to the tax treatment of short sales of partnership interests. Please also read
Disposition of Common Units Recognition of Gain or Loss.
Alternative Minimum Tax. Each unitholder will be required to take into account his
distributive share of any items of our income, gain, loss or deduction for purposes of the
alternative minimum tax. The current minimum tax rate for noncorporate taxpayers is 26% on the
first $175,000 of alternative minimum taxable income in excess of the exemption amount and 28% on
any additional alternative minimum taxable income. Prospective unitholders are urged to consult
with their tax advisors as to the impact of an investment in units on their liability for the
alternative minimum tax.
Tax Rates. In general, the highest effective United States federal income tax rate for
individuals currently is 35% and the maximum United States federal income tax rate for net capital
gains of an individual currently is 15% if the asset disposed of was held for more than twelve
months at the time of disposition.
Section 754 Election. We have made the election permitted by Section 754 of the Internal
Revenue Code. That election is irrevocable without the consent of the IRS. The election will
generally permit us to adjust a common unit purchasers tax basis in our assets (inside basis)
under Section 743(b) of the Internal Revenue Code to reflect his purchase price. The Section
743(b) adjustment does not apply to a person who purchases common units directly from us and it
belongs only to the purchaser and not to other unitholders. For purposes of this discussion, a
unitholders inside basis in our assets has two components: (1) his share of our tax basis in our
assets (common basis) and (2) his Section 743(b) adjustment to that basis.
Where the remedial allocation method is adopted (which we have adopted as to property other
than certain goodwill properties), the Treasury Regulations under Section 743 of the Internal
Revenue Code require a portion of the Section 743(b) adjustment that is attributable to recovery
property under Section 168 of the Internal Revenue Code to be depreciated over the remaining cost
recovery period for the Section 704(c) built-in gain. If we elect a method other than the remedial
method with respect to a goodwill property, Treasury Regulation Section 1.197-2(g)(3) generally
requires that the Section 743(b) adjustment attributable to an amortizable Section 197 intangible,
which includes goodwill property, should be treated as a newly-acquired asset placed in service in
the month when the purchaser acquires the common unit. Under Treasury Regulation Section
1.167(c)-l(a)(6), a Section 743(b) adjustment attributable to property subject to depreciation
under Section 167 of the Internal Revenue Code, rather than cost recovery deductions under Section
168, is generally required to be depreciated using either the straight-line method or the 150%
declining balance method. If we elect a method other than the remedial method, the depreciation
and amortization methods and useful lives associated with the Section 743(b) adjustment, therefore,
may differ from the methods and useful lives generally used to depreciate the inside basis in such
properties. Under our partnership agreement, the general partner is authorized to take a position
to preserve the uniformity of units even if that position is not consistent with these and any
other Treasury Regulations. If we elect a method other than
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the remedial method with respect to a goodwill property, the common basis of such property is
not amortizable. Please read Tax Treatment of Operations Uniformity of Units.
Although Vinson & Elkins L.L.P. is unable to opine as to the validity of this approach because
there is no direct or indirect controlling authority on this issue, we intend to depreciate the
portion of a Section 743(b) adjustment attributable to unrealized appreciation in the value of
Contributed Property, to the extent of any unamortized book-tax disparity, using a rate of
depreciation or amortization derived from the depreciation or amortization method and useful life
applied to the common basis of the property, or treat that portion as non-amortizable to the extent
attributable to property the common basis of which is not amortizable. This method is consistent
with the methods employed by other publicly traded partnerships but is arguably inconsistent with
Treasury Regulation Section 1.167(c)-1(a)(6), which is not expected to directly apply to a material
portion of our assets, and Treasury Regulation Section 1.197-2(g)(3). To the extent this Section
743(b) adjustment is attributable to appreciation in value in excess of the unamortized book-tax
disparity, we will apply the rules described in the Treasury Regulations and legislative history.
If we determine that this position cannot reasonably be taken, we may take a depreciation or
amortization position under which all purchasers acquiring units in the same month would receive
depreciation or amortization, whether attributable to common basis or a Section 743(b) adjustment,
based upon the same applicable rate as if they had purchased a direct interest in our assets. This
kind of aggregate approach may result in lower annual depreciation or amortization deductions than
would otherwise be allowable to some unitholders. Please read Tax Treatment of Operations
Uniformity of Units. A unitholders tax basis for his common units is reduced by his share of our
deductions (whether or not such deductions were claimed on an individuals income tax return) so
that any position we take that understates deductions will overstate the common unitholders basis
in his common units, which may cause the unitholder to understate gain or overstate loss on any
sale of such units. Please read Disposition of Common UnitsRecognition of Gain or Loss. The
IRS may challenge our position with respect to depreciating or amortizing the Section 743(b)
adjustment we take to preserve the uniformity of the units. If such a challenge were sustained,
the gain from the sale of units might be increased without the benefit of additional deductions.
A Section 754 election is advantageous if the transferees tax basis in his units is higher
than the units share of the aggregate tax basis of our assets immediately prior to the transfer.
In that case, as a result of the election, the transferee would have, among other items, a greater
amount of depreciation and depletion deductions and his share of any gain or loss on a sale of our
assets would be less. Conversely, a Section 754 election is disadvantageous if the transferees
tax basis in his units is lower than those units share of the aggregate tax basis of our assets
immediately prior to the transfer. Thus, the fair market value of the units may be affected either
favorably or unfavorably by the election. A basis adjustment is required regardless of whether a
Section 754 election is made in the case of a transfer of an interest in us if we have a
substantial built-in loss immediately after the transfer, or if we distribute property and have a
substantial basis reduction. Generally a built-in loss or a basis reduction is substantial if it
exceeds $250,000.
The calculations involved in the Section 754 election are complex and will be made on the
basis of assumptions as to the value of our assets and other matters. For example, the allocation
of the Section 743(b) adjustment among our assets must be made in accordance with the Internal
Revenue Code. The IRS could seek to reallocate some or all of any Section 743(b) adjustment
allocated by us to our tangible assets to goodwill instead. Goodwill, as an intangible asset, is
generally nonamortizable or amortizable over a longer period of time or under a less accelerated
method than our tangible assets. We cannot assure you that the determinations we make will not be
successfully challenged by the IRS and that the deductions resulting from them will not be reduced
or disallowed altogether. Should the IRS require a different basis adjustment to be made, and
should, in our opinion, the expense of compliance exceed the benefit of the election, we may seek
permission from the IRS to revoke our Section 754 election. If permission is granted, a subsequent
purchaser of units may be allocated more income than he would have been allocated had the election
not been revoked.
Tax Treatment of Operations
Accounting Method and Taxable Year. We use the year ending December 31 as our taxable year
and the accrual method of accounting for federal income tax purposes. Each unitholder will be
required to include in income his share of our income, gain, loss and deduction for our taxable
year ending within or with his taxable year. In addition, a unitholder who has a taxable year
ending on a date other than December 31 and who disposes of all of
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his units following the close of our taxable year but before the close of his taxable year
must include his share of our income, gain, loss and deduction in income for his taxable year, with
the result that he will be required to include in income for his taxable year his share of more
than one year of our income, gain, loss and deduction. Please read Disposition of Common Units
Allocations Between Transferors and Transferees.
Initial Tax Basis, Depreciation and Amortization. The tax basis of our assets will be used
for purposes of computing depreciation and cost recovery deductions and, ultimately, gain or loss
on the disposition of these assets. The federal income tax burden associated with the difference
between the fair market value of our assets and their tax basis immediately prior to this offering
will be borne by the general partner, its affiliates and our other unitholders. Please read Tax
Consequences of Unit Ownership Allocation of Income, Gain, Loss and Deduction.
To the extent allowable, we may elect to use the depreciation and cost recovery methods that
will result in the largest deductions being taken in the early years after assets are placed in
service. Because our general partner may determine not to adopt the remedial method of allocation
with respect to any difference between the tax basis and the fair market value of goodwill
immediately prior to this or any future offering, we may not be entitled to any amortization
deductions with respect to any goodwill conveyed to us on formation or held by us at the time of
any future offering. Please read Uniformity of Units. Property we subsequently acquire or
construct may be depreciated using accelerated methods permitted by the Internal Revenue Code.
If we dispose of depreciable property by sale, foreclosure, or otherwise, all or a portion of
any gain, determined by reference to the amount of depreciation previously deducted and the nature
of the property, may be subject to the recapture rules and taxed as ordinary income rather than
capital gain. Similarly, a partner who has taken cost recovery or depreciation deductions with
respect to property we own will likely be required to recapture some or all of those deductions as
ordinary income upon a sale of his interest in us. Please read Tax Consequences of Unit
Ownership Allocation of Income, Gain, Loss and Deduction and Disposition of Common Units
Recognition of Gain or Loss.
The costs incurred in selling our units (called syndication expenses) must be capitalized
and cannot be deducted currently, ratably or upon our termination. There are uncertainties
regarding the classification of costs as organization expenses, which we may amortize, and as
syndication expenses, which we may not amortize. The underwriting discounts and commissions we
incur will be treated as syndication expenses.
Valuation and Tax Basis of Our Properties. The federal income tax consequences of the
ownership and disposition of units will depend in part on our estimates of the relative fair market
values, and the initial tax bases, of our assets. Although we may from time to time consult with
professional appraisers regarding valuation matters, we will make many of the relative fair market
value estimates ourselves. These estimates and determinations of basis are subject to challenge
and will not be binding on the IRS or the courts. If the estimates of fair market value or basis
are later found to be incorrect, the character and amount of items of income, gain, loss or
deductions previously reported by unitholders might change, and unitholders might be required to
adjust their tax liability for prior years and incur interest and penalties with respect to those
adjustments.
Disposition of Common Units
Recognition of Gain or Loss. Gain or loss will be recognized on a sale of units equal to the
difference between the amount realized and the unitholders tax basis for the units sold. A
unitholders amount realized will be measured by the sum of the cash or the fair market value of
other property he receives plus his share of our nonrecourse liabilities. Because the amount
realized includes a unitholders share of our nonrecourse liabilities, the gain recognized on the
sale of units could result in a tax liability in excess of any cash received from the sale.
Prior distributions from us in excess of cumulative net taxable income for a common unit that
decreased a unitholders tax basis in that common unit will, in effect, become taxable income if
the common unit is sold at a price greater than the unitholders tax basis in that common unit,
even if the price received is less than his original cost.
Except as noted below, gain or loss recognized by a unitholder, other than a dealer in
units, on the sale or exchange of a unit held for more than one year will generally be taxable as
capital gain or loss. Capital gain
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recognized by an individual on the sale of units held more than twelve months will generally
be taxed at a maximum rate of 15%. A portion of this gain or loss, which will likely be
substantial, however, will be separately computed and taxed as ordinary income or loss under
Section 751 of the Internal Revenue Code to the extent attributable to assets giving rise to
depreciation recapture or other unrealized receivables or to inventory items we own. The term
unrealized receivables includes potential recapture items, including depreciation recapture.
Ordinary income attributable to unrealized receivables, inventory items and depreciation recapture
may exceed net taxable gain realized upon the sale of a unit and may be recognized even if there is
a net taxable loss realized on the sale of a unit. Thus, a unitholder may recognize both ordinary
income and a capital loss upon a sale of units. Net capital loss may offset capital gains and no
more than $3,000 of ordinary income, in the case of individuals, and may only be used to offset
capital gain in the case of corporations.
The IRS has ruled that a partner who acquires interests in a partnership in separate
transactions must combine those interests and maintain a single adjusted tax basis for all those
interests. Upon a sale or other disposition of less than all of those interests, a portion of that
tax basis must be allocated to the interests sold using an equitable apportionment method, which
generally means that the tax basis allocated to the interest sold equals an amount that bears the
same relation to the partners tax basis in his entire interest in the partnership as the value of
the interest sold bears to the value of the partners entire interest in the partnership. Treasury
Regulations under Section 1223 of the Internal Revenue Code allow a selling unitholder who can
identify common units transferred with an ascertainable holding period to elect to use the actual
holding period of the common units transferred. Thus, according to the ruling, a common unitholder
will be unable to select high or low basis common units to sell as would be the case with corporate
stock, but, according to the regulations, may designate specific common units sold for purposes of
determining the holding period of units transferred. A unitholder electing to use the actual
holding period of common units transferred must consistently use that identification method for all
subsequent sales or exchanges of common units. A unitholder considering the purchase of additional
units or a sale of common units purchased in separate transactions is urged to consult his tax
advisor as to the possible consequences of this ruling and application of the Treasury Regulations.
Specific provisions of the Internal Revenue Code affect the taxation of some financial
products and securities, including partnership interests, by treating a taxpayer as having sold an
appreciated partnership interest, one in which gain would be recognized if it were sold, assigned
or terminated at its fair market value, if the taxpayer or related persons enter(s) into:
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a short sale; |
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an offsetting notional principal contract; or |
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a futures or forward contract with respect to the partnership interest or
substantially identical property. |
Moreover, if a taxpayer has previously entered into a short sale, an offsetting notional
principal contract or a futures or forward contract with respect to the partnership interest, the
taxpayer will be treated as having sold that position if the taxpayer or a related person then
acquires the partnership interest or substantially identical property. The Secretary of the
Treasury is also authorized to issue regulations that treat a taxpayer that enters into
transactions or positions that have substantially the same effect as the preceding transactions as
having constructively sold the financial position.
Allocations Between Transferors and Transferees. In general, our taxable income and losses
will be determined annually, will be prorated on a monthly basis and will be subsequently
apportioned among the unitholders in proportion to the number of units owned by each of them as of
the opening of the applicable exchange on the first business day of the month (the Allocation
Date). However, gain or loss realized on a sale or other disposition of our assets other than in
the ordinary course of business will be allocated among the unitholders on the Allocation Date in
the month in which that gain or loss is recognized. As a result, a unitholder transferring units
may be allocated income, gain, loss and deduction realized after the date of transfer.
The use of this method may not be permitted under existing Treasury Regulations. Accordingly,
Vinson & Elkins L.L.P. is unable to opine on the validity of this method of allocating income and
deductions between
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transferor and transferee unitholders. If this method is not allowed under the Treasury
Regulations, or only applies to transfers of less than all of the unitholders interest, our
taxable income or losses might be reallocated among the unitholders. We are authorized to revise
our method of allocation between transferor and transferee unitholders, as well as unitholders
whose interests vary during a taxable year, to conform to a method permitted under future Treasury
Regulations.
A unitholder who owns units at any time during a quarter and who disposes of them prior to the
record date set for a cash distribution for that quarter will be allocated items of our income,
gain, loss and deductions attributable to that quarter but will not be entitled to receive that
cash distribution.
Notification Requirements. A unitholder who sells any of his units is generally required to
notify us in writing of that sale within 30 days after the sale (or, if earlier, January 15 of the
year following the sale). A purchaser of units who purchases units from another unitholder is also
generally required to notify us in writing of that purchase within 30 days after the purchase.
Upon receiving such notifications, we are required to notify the IRS of that transaction and to
furnish specified information to the transferor and transferee. Failure to notify us of a purchase
may, in some cases, lead to the imposition of penalties. However, these reporting requirements do
not apply to a sale by an individual who is a citizen of the United States and who effects the sale
or exchange through a broker who will satisfy such requirements.
Constructive Termination. We will be considered to have been terminated for tax purposes if
there is a sale or exchange of 50% or more of the total interests in our capital and profits within
a twelve-month period. A constructive termination results in the closing of our taxable year for
all unitholders. In the case of a unitholder reporting on a taxable year other than a fiscal year
ending December 31, the closing of our taxable year may result in more than twelve months of our
taxable income or loss being includable in his taxable income for the year of termination. We
would be required to make new tax elections after a termination, including a new election under
Section 754 of the Internal Revenue Code, and a termination would result in a deferral of our
deductions for depreciation. A termination could also result in penalties if we were unable to
determine that the termination had occurred. Moreover, a termination might either accelerate the
application of, or subject us to, any tax legislation enacted before the termination.
Uniformity of Units
Because we cannot match transferors and transferees of units, we must maintain uniformity of
the economic and tax characteristics of the units to a purchaser of these units. In the absence of
uniformity, we may be unable to completely comply with a number of federal income tax requirements,
both statutory and regulatory. A lack of uniformity can result from a literal application of
Treasury Regulation Section 1.167(c)-1(a)(6) and Treasury Regulation Section 1.197-2(g)(3). Any
non-uniformity could have a negative impact on the value of the units. Please read Tax
Consequences of Unit Ownership Section 754 Election.
We intend to depreciate the portion of a Section 743(b) adjustment attributable to unrealized
appreciation in the value of Contributed Property, to the extent of any unamortized book-tax
disparity, using a rate of depreciation or amortization derived from the depreciation or
amortization method and useful life applied to the common basis of that property, or treat that
portion as nonamortizable, to the extent attributable to property the common basis of which is not
amortizable, consistent with the regulations under Section 743 of the Internal Revenue Code, even
though that position may be inconsistent with Treasury Regulation Section 1.167(c)-1(a)(6) which is
not expected to directly apply to a material portion of our assets, and Treasury Regulation Section
1.197-2(g)(3). Please read Tax Consequences of Unit Ownership Section 754 Election. To the
extent that the Section 743(b) adjustment is attributable to appreciation in value in excess of the
unamortized book-tax disparity, we will apply the rules described in the Treasury Regulations and
legislative history. If we determine that this position cannot reasonably be taken, we may adopt a
depreciation and amortization position under which all purchasers acquiring units in the same month
would receive depreciation and amortization deductions, whether attributable to a common basis or
Section 743(b) adjustment, based upon the same applicable rate as if they had purchased a direct
interest in our property. If this position is adopted, it may result in lower annual depreciation
and amortization deductions than would otherwise be allowable to some unitholders and risk the loss
of depreciation and amortization deductions not taken in the year that these deductions are
otherwise allowable. This position will not be adopted if we determine that the loss of
depreciation and amortization deductions will have a material adverse effect on the unitholders.
If
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we choose not to utilize this aggregate method, we may use any other reasonable depreciation
and amortization method to preserve the uniformity of the intrinsic tax characteristics of any
units that would not have a material adverse effect on the unitholders. The IRS may challenge any
method of depreciating the Section 743(b) adjustment described in this paragraph. If this
challenge were sustained, the uniformity of units might be affected, and the gain from the sale of
units might be increased without the benefit of additional deductions. Please read Disposition
of Common Units Recognition of Gain or Loss.
Tax-Exempt Organizations and Other Investors
Ownership of units by employee benefit plans, other tax-exempt organizations, non-resident
aliens, foreign corporations, and other foreign persons raises issues unique to those investors
and, as described below, may have substantially adverse tax consequences to them.
Employee benefit plans and most other organizations exempt from federal income tax, including
individual retirement accounts and other retirement plans, are subject to federal income tax on
unrelated business taxable income. Virtually all of our income allocated to a unitholder which is
a tax-exempt organization will be unrelated business taxable income and will be taxable to them.
Non-resident aliens and foreign corporations, trusts or estates that own units will be
considered to be engaged in business in the United States because of the ownership of units. As a
consequence they will be required to file federal tax returns to report their share of our income,
gain, loss or deduction and pay federal income tax at regular rates on their share of our net
income or gain. Under rules applicable to publicly traded partnerships, we will withhold tax, at
the highest effective applicable rate, from cash distributions made quarterly to foreign
unitholders. Each foreign unitholder must obtain a taxpayer identification number from the IRS and
submit that number to our transfer agent on a Form W-8 or applicable substitute form in order to
obtain credit for these withholding taxes. A change in applicable law may require us to change
these procedures.
In addition, because a foreign corporation that owns units will be treated as engaged in a
United States trade or business, that corporation may be subject to the United States branch
profits tax at a rate of 30%, in addition to regular federal income tax, on its share of our income
and gain, as adjusted for changes in the foreign corporations U.S. net equity, which is
effectively connected with the conduct of a United States trade or business. That tax may be
reduced or eliminated by an income tax treaty between the United States and the country in which
the foreign corporate unitholder is a qualified resident. In addition, this type of unitholder is
subject to special information reporting requirements under Section 6038C of the Internal Revenue
Code.
Under a ruling of the IRS, a foreign unitholder who sells or otherwise disposes of a unit will
be subject to federal income tax on gain realized on the sale or disposition of that unit to the
extent that this gain is effectively connected with a United States trade or business of the
foreign unitholder. Apart from the ruling, a foreign unitholder will not be taxed or subject to
withholding upon the sale or disposition of a unit if he has owned less than 5% in value of the
units during the five-year period ending on the date of the disposition and if the units are
regularly traded on an established securities market at the time of the sale or disposition.
Administrative Matters
Information Returns and Audit Procedures. We intend to furnish to each unitholder, within 90
days after the close of each calendar year, specific tax information, including a Schedule K-1,
which describes his share of our income, gain, loss and deduction for our preceding taxable year.
In preparing this information, which will not be reviewed by counsel, we will take various
accounting and reporting positions, some of which have been mentioned earlier, to determine his
share of income, gain, loss and deduction. We cannot assure you that those positions will yield a
result that conforms to the requirements of the Internal Revenue Code, Treasury Regulations or
administrative interpretations of the IRS. Neither we nor counsel can assure prospective
unitholders that the IRS will not successfully contend in court that those positions are
impermissible. Any challenge by the IRS could negatively affect the value of the units.
The IRS may audit our federal income tax information returns. Adjustments resulting from an
IRS audit may require each unitholder to adjust a prior years tax liability, and possibly may
result in an audit of his own return.
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Any audit of a unitholders return could result in adjustments not related to our returns as
well as those related to our returns.
Partnerships generally are treated as separate entities for purposes of federal tax audits,
judicial review of administrative adjustments by the IRS and tax settlement proceedings. The tax
treatment of partnership items of income, gain, loss and deduction are determined in a partnership
proceeding rather than in separate proceedings with the partners. The Internal Revenue Code
requires that one partner be designated as the Tax Matters Partner for these purposes. The
partnership agreement names the general partner as our Tax Matters Partner.
The Tax Matters Partner will make some elections on our behalf and on behalf of unitholders.
In addition, the Tax Matters Partner can extend the statute of limitations for assessment of tax
deficiencies against unitholders for items in our returns. The Tax Matters Partner may bind a
unitholder with less than a 1% profits interest in us to a settlement with the IRS unless that
unitholder elects, by filing a statement with the IRS, not to give that authority to the Tax
Matters Partner. The Tax Matters Partner may seek judicial review, by which all the unitholders
are bound, of a final partnership administrative adjustment and, if the Tax Matters Partner fails
to seek judicial review, judicial review may be sought by any unitholder having at least a 1%
interest in profits or by any group of unitholders having in the aggregate at least a 5% interest
in profits. However, only one action for judicial review will go forward, and each unitholder with
an interest in the outcome may participate.
A unitholder must file a statement with the IRS identifying the treatment of any item on his
federal income tax return that is not consistent with the treatment of the item on our return.
Intentional or negligent disregard of this consistency requirement may subject a unitholder to
substantial penalties.
Nominee Reporting. Persons who hold an interest in us as a nominee for another person are
required to furnish to us:
(a) the name, address and taxpayer identification number of the beneficial owner and the
nominee;
(b) whether the beneficial owner is
(1) a person that is not a United States person,
(2) a foreign government, an international organization or any wholly owned agency or
instrumentality of either of the foregoing, or
(3) a tax-exempt entity;
(c) the amount and description of units held, acquired or transferred for the
beneficial owner; and
(d) specific information including the dates of acquisitions and transfers, means of
acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net
proceeds from sales.
Brokers and financial institutions are required to furnish additional information, including
whether they are United States persons and specific information on units they acquire, hold or
transfer for their own account. A penalty of $50 per failure, up to a maximum of $100,000 per
calendar year, is imposed by the Internal Revenue Code for failure to report that information to
us. The nominee is required to supply the beneficial owner of the units with the information
furnished to us.
Accuracy-Related Penalties. An additional tax equal to 20% of the amount of any portion of an
underpayment of tax that is attributable to one or more specified causes, including negligence or
disregard of rules or regulations, substantial understatements of income tax and substantial
valuation misstatements, is imposed by the Internal Revenue Code. No penalty will be imposed,
however, for any portion of an underpayment if it is shown that there was a reasonable cause for
that portion and that the taxpayer acted in good faith regarding that portion.
For individuals a substantial understatement of income tax in any taxable year exists if the
amount of the understatement exceeds the greater of 10% of the tax required to be shown on the
return for the taxable year or
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$5,000. The amount of any understatement subject to penalty generally is reduced if any
portion is attributable to a position adopted on the return:
(1) for which there is, or was, substantial authority, or
(2) as to which there is a reasonable basis and the relevant facts of that position are
disclosed on the return.
If any item of income, gain, loss or deduction included in the distributive shares of
unitholders might result in that kind of an understatement of income for which no substantial
authority exists but for which a reasonable basis for the tax treatment of such item exists, we
must disclose the relevant facts on our return. In such a case, we will make a reasonable effort
to furnish sufficient information for unitholders to make adequate disclosure on their returns and
to take other actions as may be appropriate to permit unitholders to avoid liability for this
penalty. More stringent rules apply to tax shelters, a term that in this context does not appear
to include us.
A substantial valuation misstatement exists if the value of any property, or the adjusted
basis of any property, claimed on a tax return is 200% or more of the amount determined to be the
correct amount of the valuation or adjusted basis. No penalty is imposed unless the portion of the
underpayment attributable to a substantial valuation misstatement exceeds $5,000 ($10,000 for most
corporations). If the valuation claimed on a return is 400% or more than the correct valuation,
the penalty imposed increases to 40%.
Reportable Transactions. If we were to engage in a reportable transaction, we (and possibly
you and others) would be required to make a detailed disclosure of the transaction to the IRS. A
transaction may be a reportable transaction based upon any of several factors, including the fact
that it is a type of tax avoidance transaction publicly identified by the IRS as a listed
transaction or that it produces certain kinds of losses for partnerships, individuals, S
corporations, and trusts in excess of $2 million in any single year, or $4 million in any
combination of tax years. Our participation in a reportable transaction could increase the
likelihood that our federal income tax information return (and possibly your tax return) would be
audited by the IRS. Please read Information Returns and Audit Procedures.
Moreover, if we were to participate in a reportable transaction with a significant purpose to
avoid or evade tax, or in any listed transaction, you may be subject to the following provisions of
the American Jobs Creation Act of 2004:
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accuracy-related penalties with a broader scope, significantly narrower exceptions,
and potentially greater amounts than described above at Accuracy-Related Penalties, |
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for those persons otherwise entitled to deduct interest on federal tax deficiencies,
nondeductibility of interest on any resulting tax liability and |
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in the case of a listed transaction, an extended statute of limitations. |
We do not expect to engage in any reportable transactions.
State, Local and Other Tax Considerations
In addition to federal income taxes, you likely will be subject to other taxes, including
state and local income taxes, unincorporated business taxes, and estate, inheritance or intangible
taxes that may be imposed by the various jurisdictions in which we do business or own property or
in which you are a resident. We currently do business or own property in the States of Louisiana,
Texas, Arkansas, New York, Pennsylvania, Ohio, Massachusetts, Vermont, New Hampshire, Rhode Island,
Connecticut and Maine. Each of these states, except Texas currently impose a personal income tax
on individuals. Most of these states impose an income tax on corporations and other entities. We
may also own property or do business in other states in the future. Although an analysis of those
various taxes is not presented here, each prospective unitholder is urged to consider their
potential impact on his investment in us. You may not be required to file a return and pay taxes
in some states because your income from that state falls below the filing and payment requirement.
You will be required, however, to file state income tax returns and to pay state income taxes in
many of the states in which we do business or own property, and you may be subject to
II-70
penalties for failure to comply with those requirements. In some states, tax losses may not
produce a tax benefit in the year incurred and also may not be available to offset income in
subsequent taxable years. Some of the states may require us, or we may elect, to withhold a
percentage of income from amounts to be distributed to a unitholder who is not a resident of the
state. Withholding, the amount of which may be greater or less than a particular unitholders
income tax liability to the state, generally does not relieve a non-resident unitholder from the
obligation to file an income tax return. Amounts withheld may be treated as if distributed to
unitholders for purposes of determining the amounts distributed by us. Please read Tax
Consequences of Unit Ownership Entity-Level Collections. Based on current law and our estimate
of our future operations, the general partner anticipates that any amounts required to be withheld
will not be material.
It is the responsibility of each unitholder to investigate the legal and tax consequences,
under the laws of pertinent states and localities, of his investment in us. Vinson & Elkins L.L.P.
has not rendered an opinion on the state or local tax consequences of an investment in us. We
strongly recommend that each prospective unitholder consult, and depend upon, his own tax counsel
or other advisor with regard to those matters. It is the responsibility of each unitholder to file
all state and local, as well as United States federal tax returns, that may be required of him.
Tax Consequences of Ownership of Debt Securities
A description of the material federal income tax consequences of the acquisition, ownership
and disposition of debt securities will be set forth on the prospectus supplement relating to the
offering of debt securities.
II-71
PLAN OF DISTRIBUTION
We may sell securities described in this prospectus and any accompanying prospectus supplement
to one or more underwriters for public offering and sale, and we also may sell securities to
investors directly or through one or more broker-dealers or agents.
We will prepare a prospectus supplement for each offering that will disclose the terms of the
offering, including the name or names of any underwriters, dealers or agents, the purchase price of
the securities and the proceeds to us from the sale, any underwriting discounts and other items
constituting compensation to underwriters, dealers or agents.
We will fix a price or prices of our securities at:
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market prices prevailing at the time of any sale under this registration statement; |
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prices related to market prices; or |
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negotiated prices. |
We may change the price of the securities offered from time to time.
If we use underwriters or dealers in the sale, they will acquire the securities for their own
account and they may resell these securities from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one or more of such
firms. Unless otherwise disclosed in the prospectus supplement, the obligations of the underwriters
to purchase securities will be subject to certain conditions precedent, and the underwriters will
be obligated to purchase all of the securities offered by the prospectus supplement if any are
purchased. Any initial public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
If a prospectus supplement so indicates, the underwriters may, pursuant to Regulation M under
the Securities Exchange Act of 1934, engage in transactions, including stabilization bids or the
imposition of penalty bids, that may have the effect of stabilizing or maintaining the market price
of the securities at a level above that which might otherwise prevail in the open market.
We may sell the securities directly or through agents designated by us from time to time. We
will name any agent involved in the offering and sale of the securities for which this prospectus
is delivered, and disclose any commissions payable by us to the agent or the method by which the
commissions can be determined, in the prospectus supplement. Unless otherwise indicated in the
prospectus supplement, any agent will be acting on a best efforts basis for the period of its
appointment.
We may agree to indemnify underwriters, dealers and agents who participate in the distribution
of securities against certain liabilities to which they may become subject in connection with the
sale of the securities, including liabilities arising under the Securities Act of 1933.
Certain of the underwriters and their affiliates may be customers of, may engage in
transactions with and may perform services for us or our affiliates in the ordinary course of
business.
A prospectus and accompanying prospectus supplement in electronic form may be made available
on the web sites maintained by the underwriters. The underwriters may agree to allocate a number of
securities for sale to their online brokerage account holders. Such allocations of securities for
internet distributions will be made on the same basis as other allocations. In addition, securities
may be sold by the underwriters to securities dealers who resell securities to online brokerage
account holders.
II-72
LEGAL MATTERS
Vinson & Elkins L.L.P. will pass upon the validity of the securities offered in this
registration statement. If certain legal matters in connection with an offering of the securities
made by this prospectus and a related prospectus supplement are passed on by counsel for the
underwriters of such offering, that counsel will be named in the applicable prospectus supplement
related to that offering.
EXPERTS
The consolidated financial statements, the related consolidated financial statement schedule
and managements report on the effectiveness of internal control over financial reporting
incorporated in this prospectus by reference from the DCP Midstream Partners, LP Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, an independent registered public accounting
firm, as stated in their reports, which are incorporated herein by reference (which reports (1)
express an unqualified opinion on the consolidated financial statements and financial statement
schedule and include an explanatory paragraph referring to the preparation of the portion of the
DCP Midstream Partners, LP consolidated financial statements attributable to operations prior to
December 7, 2005 from the separate records of DCP Midstream, LLC (formerly Duke Energy Field
Services, LLC) and the basis of presentation of the consolidated financial statements of DCP
Midstream Partners, LP to retroactively reflect DCP Midstream Partners, LPs acquisition of the
wholesale propane logistics business and the preparation of the portion of the DCP Midstream
Partners, LP consolidated financial statements attributable to the wholesale propane logistics
business from the separate records maintained by DCP Midstream, LLC, and (2) express an unqualified
opinion on managements assessment regarding the effectiveness of internal control over financial
reporting, and (3) express an unqualified opinion on the effectiveness of internal control over
financial reporting), and have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
The consolidated financial statement of DCP Midstream GP, LP as of December 31, 2006
incorporated in this prospectus by reference from the DCP Midstream Partners, LP Current Report on
Form 8-K filed under the Securities and Exchange Act of 1934 dated April 20, 2007, has been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated
herein by reference, and has been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The consolidated financial statement of DCP Midstream, LLC as of December 31, 2006
incorporated in this prospectus by reference from the DCP Midstream Partners, LP Current Report on
Form 8-K filed under the Securities and Exchange Act of 1934 dated April 20, 2007, has been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and has been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
II-73
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below are the expenses (other than underwriting discounts and commissions) expected
to be incurred in connection with the issuance and distribution of the securities registered
hereby. With the exception of the Securities and Exchange Commission registration fee, the amounts
set forth below are estimates. We will pay all expenses (other than underwriting discounts and
commissions) incurred by the offering unitholders.
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Securities and Exchange Commission registration fee |
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$ |
46,050 |
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Legal fees and expenses |
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30,000 |
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Accounting fees and expenses |
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15,000 |
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Printing expenses |
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20,000 |
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Trustee fees and expenses |
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15,000 |
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Miscellaneous |
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5,000 |
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TOTAL |
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$ |
131,050 |
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Item 15. Indemnification of Directors and Officers.
DCP Midstream Partners, LP
Section 17-108 of the Delaware Revised Limited Partnership Act empowers a Delaware limited
partnership to indemnify and hold harmless any partner or other person from and against all claims
and demands whatsoever. The partnership agreement of DCP Midstream Partners, LP provides that, in
most circumstances, we will indemnify the following persons, to the fullest extent permitted by
law, from and against all losses, claims, damages or similar events:
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our general partner; |
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any departing general partner; |
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any person who is or was an affiliate of our general partner or any departing general partner; |
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any person who is or was a member, partner, officer, director employee, agent or
trustee of our general partner or any departing general partner or any affiliate of our
general partner or any departing general partner; or |
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any person who is or was serving at the request of our general partner or any
departing general partners or any affiliate of a general partner or any departing
general partner as an officer, director, employee, member, partner, agent or trustee of
another person. |
Any indemnification under these provisions will only be out of our assets. Our general
partners will not be personally liable for, or have any obligation to contribute or loan funds or
assets to us to enable us to effectuate, indemnification. We may purchase insurance against
liabilities asserted against and expenses incurred by persons for our activities, regardless of
whether we would have the power to indemnify the person against liabilities under the partnership
agreement.
Any underwriting agreement entered into in connection with the sale of the securities offered
pursuant to this registration statement will provide for indemnification of officers and directors
of the general partner, including liabilities under the Securities Act.
II-74
DCP Midstream Partners Finance Corp.
Section 145 of the Delaware General Corporation Law, inter alia, empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding (other than an action by or in the
right of the corporation) by reason of the fact that such person is or was a director, officer,
employee or agent of another corporation or other enterprise, against expenses (including
attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Similar indemnity is authorized for such persons against expenses (including attorneys
fees) actually and reasonably incurred in connection with the defense or settlement of any such
threatened, pending or completed action or suit if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the corporation, and
provided further (unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may that be made only
as authorized in each specific case upon a determination by the stockholders or disinterested
directors or by independent legal counsel in a written opinion that indemnification is proper
because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or agent of another
corporation or enterprise, against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the corporation would otherwise
have the power to indemnify him under Section 145. Also, the bylaws of DCP Midstream Partners
Finance Corp. provide for the indemnification of directors and officers of and such directors and
officers who serve at the request of the company as directors, officers, employees or agents of any
other enterprise against certain liabilities under certain circumstances.
Item 16. Exhibits.
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Exhibit |
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Number |
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Description |
**1.1
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Form of Underwriting Agreement. |
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*4.1
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Form of Senior Indenture for Senior Debt Securities. |
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*4.2
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Form of Subordinated Indenture for Subordinated Debt Securities. |
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**4.3
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Form of Senior Debt Securities. |
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**4.4
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Form of Subordinated Debt Securities. |
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*5.1
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Opinion of Vinson & Elkins L.L.P. as to the legality of the securities being registered. |
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*8.1
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Opinion of Vinson & Elkins L.L.P. as to tax matters. |
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*12.1
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Ratios of earnings to fixed charges. |
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*23.1
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Consent of Deloitte & Touche LLP on annual report on Form 10-K for the year ended December 31, 2006. |
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*23.2
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Consent of Deloitte & Touche LLP on DCP Midstream GP, LPs Consolidated Balance Sheet for the year
ended December 31, 2006 (incorporated by reference as Exhibit 99.1 to the current report on Form
8-K (File No. 001-32678) filed on April 20, 2007). |
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*23.3
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Consent of Deloitte & Touche LLP on DCP Midstream LLCs Consolidated Balance Sheet for the year
ended December 31, 2006 (incorporated by reference as Exhibit 99.2 to the current report on Form
8-K (File No. 001-32678) filed on April 20, 2007). |
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*23.4
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Consent of Vinson & Elkins L.L.P. (contained in Exhibits 5.1 and 8.1). |
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*24.1
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Power of Attorney (included on signature page of this registration statement). |
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* |
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Filed herewith |
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** |
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To be filed as and Exhibit to a Current Report on Form 8-K or in a post-effective amendment
to this registration statement |
II-75
Item 17 Undertakings.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of
this 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
this 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 a prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent
n the maximum aggregate offering price set forth in the Calculation of Registration Fee table
in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to such information
in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the registration
statement is on Form S-3 and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the
registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement;
(2) 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.
(3) 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.
(4) That, for the purpose of determining liability under the Securities Act to any purchaser:
(a) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
(b) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an offering made pursuant
to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by
section 10(a) of the Securities Act shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of
sale prior to such effective date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement or made in any
such document immediately prior to such effective date.
II-76
(5) That, for the purpose of determining liability of any registrant under the Securities Act
to any purchaser in the initial distribution of the securities, each undersigned registrant
undertakes that in a primary offering of securities of such registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, such registrant will be a seller to the purchaser and will be considered to offer
or sell such securities to such purchaser:
(a) Any preliminary prospectus or prospectus of any undersigned registrant relating to the
offering required to be filed pursuant to Rule 424;
(b) Any free writing prospectus relating to the offering prepared by or on behalf of any
undersigned registrant or used or referred to by the undersigned registrant;
(c) The portion of any other free writing prospectus relating to the offering containing
material information about any undersigned registrant or its securities provided by or on behalf
of such registrant; and
(d) Any other communication that is an offer in the offering made by any undersigned
registrant to the purchaser.
The undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrants 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 plans annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of any registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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 registrant 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 of 1933 and will
be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus or any prospectus supplement filed as part of this registration
statement in reliance on Rule 430A and contained in a form of prospectus or prospectus supplement
filed by the registrant pursuant to Rule 424(b)( 1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus or prospectus supplement 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.
Each undersigned registrant hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee under each of its indentures to act under subsection (a)
of Section 310 of the Trust Indenture Act of 1939, as amended (the Act) in accordance with the
rules and regulations prescribed by the SEC under section 305(b)(2) of the Act.
II-77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on April 20, 2007.
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DCP MIDSTREAM PARTNERS, LP |
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By:
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DCP Midstream GP, LP |
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its General Partner |
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By:
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DCP Midstream GP, LLC, |
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its General Partner |
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By:
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/s/ MARK A. BORER |
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Name:
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Mark A. Borer |
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Title:
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Chief Executive Officer, President and Director |
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Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and
each of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following officers and directors of DCP Midstream Partners GP, LLC, as general
partner of DCP Midstream GP, LP, as general partner of DCP Midstream Partners, LP, the registrant,
in the capacities and on the dates indicated.
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Signature |
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Title |
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Date |
/s/ MARK A. BORER
Mark A. Borer |
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Chief Executive Officer, President and Director
(Principal Executive
Officer)
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April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
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Vice President and Chief
Financial Officer
(Principal Accounting and
Financial Officer)
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April 20, 2007 |
/s/ JIM W. MOGG
Jim W. Mogg |
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Chairman of the Board
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April 20, 2007 |
/s/ DERRILL CODY
Derrill Cody |
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Director
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April 20, 2007 |
/s/ WILLIAM H. EASTER III
William H. Easter III |
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Director
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April 20, 2007 |
/s/ PAUL F. FERGUSON, JR.
Paul F. Ferguson, Jr. |
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Director
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April 20, 2007 |
/s/ JOHN E. LOWE
John E. Lowe |
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Director
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April 20, 2007 |
II-78
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Signature |
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Title |
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Date |
/s/ FRANK A. McPHERSON
Frank A. McPherson |
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Director
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April 20, 2007 |
/s/ THOMAS C. MORRIS
Thomas C. Morris |
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Director
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April 20, 2007 |
II-79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP MIDSTREAM PARTNERS FINANCE CORP. |
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By:
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/s/ MARK A. BORER |
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Name:
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Mark A. Borer |
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Title:
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President and Chief Executive Officer |
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Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
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Signature |
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Title |
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Date |
/s/ MARK A. BORER
Mark A. Borer |
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President, Chief Executive
Officer
and Sole Director
(Principal
Executive Officer)
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April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
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Vice President and
Chief Financial
Officer (Principal
Financial Officer
and Principal
Accounting Officer)
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April 20, 2007 |
II-80
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP MIDSTREAM OPERATING, LLC |
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By:
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/s/ MARK A. BORER |
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Name:
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Mark A. Borer |
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Title:
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President and Chief Executive Officer |
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Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
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Signature |
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Title |
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Date |
/s/ MARK A. BORER
Mark A. Borer |
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President, Chief Executive
Officer
and Director
(Principal
Executive Officer)
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April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
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Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
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April 20, 2007 |
II-81
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP MIDSTREAM OPERATING, LP |
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By:
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DCP Midstream Operating, LLC,
Its General Partner |
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By:
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/s/ MARK A. BORER |
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Name:
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Mark A. Borer |
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Title:
|
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President and Chief Executive Officer |
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|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
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Signature |
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Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President, Chief Executive
Officer
and Director
(Principal
Executive Officer)
|
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April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
II-82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP ASSETS HOLDING GP, LLC |
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By:
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/s/ MARK A. BORER |
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Name:
|
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Mark A. Borer |
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|
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Title:
|
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President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
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Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
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April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP ASSETS HOLDING, LP |
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By:
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DCP Assets Holding GP, LLC,
its General Partner |
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By:
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/s/ MARK A. BORER |
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Name:
|
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Mark A. Borer |
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|
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Title:
|
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President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
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|
|
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Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-84
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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DCP BLACK LAKE HOLDING, LP |
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By:
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DCP Assets Holding GP, LLC
its General Partner |
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By:
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/s/ MARK A. BORER |
|
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|
|
|
|
|
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|
|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-85
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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ASSOCIATED LOUISIANA INTRASTATE PIPE LINE, LLC |
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By:
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DCP Assets Holdings, LP
its Sole Member |
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By:
|
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/s/ MARK A. BORER |
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|
|
|
|
|
|
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|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director |
|
April 20, 2007 |
II-86
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
|
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|
DCP INTRASTATE PIPELINE, LLC |
|
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By:
|
|
DCP Assets Holding,
LP its Sole
Member |
|
|
By:
|
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/s/ MARK A. BORER |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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|
PELICO PIPELINE, LLC |
|
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By:
|
|
DCP Assets Holding,
LP its Sole Member |
|
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By:
|
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/s/ MARK A. BORER |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-88
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
|
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|
|
|
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|
|
GAS SUPPLY RESOURCES LLC |
|
|
|
|
|
|
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|
|
By:
|
|
DCP Assets Holding,
LP its Sole Member |
|
|
By:
|
|
/s/ MARK A. BORER |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-89
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
|
|
|
|
|
|
|
|
|
GSRI TRANSPORTATION LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Gas Supply Resources
LLC
its Sole Member |
|
|
By:
|
|
/s/ MARK A. BORER |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Mark A. Borer |
|
|
|
|
Title:
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
/s/ MARK A. BORER
Mark A. Borer |
|
President and Chief Executive
Officer
(Principal
Executive Officer)
|
|
April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
|
Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
|
|
April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
|
Vice President, Business Development and Director
|
|
April 20, 2007 |
II-90
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on April 20,
2007.
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WILBREEZE PIPELINE, LP |
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By:
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DCP Assets Holding GP,
LLC its General Partner |
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By:
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/s/ MARK A. BORER |
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Name:
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Mark A. Borer |
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Title:
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President and Chief Executive Officer |
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Each person whose signature appears below appoints Mark A. Borer and Thomas E. Long, and each
of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Registration Statement (including
any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following officers and directors of the registrant in the
capacities and on the dates indicated.
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Signature |
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Title |
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Date |
/s/ MARK A. BORER
Mark A. Borer |
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President and Chief Executive
Officer
(Principal
Executive Officer)
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April 20, 2007 |
/s/ THOMAS E. LONG
Thomas E. Long |
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Vice President,
Chief Financial
Officer and Director (Principal
Financial Officer
and Principal
Accounting Officer)
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April 20, 2007 |
/s/ GREG K. SMITH
Greg K. Smith |
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Vice President, Business Development and Director
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April 20, 2007 |
II-91
INDEX TO EXHIBITS
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Exhibit |
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Number |
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Description |
**1.1
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Form of Underwriting Agreement. |
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*4.1
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Form of Senior Indenture for Senior Debt Securities. |
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*4.2
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Form of Subordinated Indenture for Subordinated Debt Securities. |
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**4.3
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Form of Senior Debt Securities. |
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**4.4
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Form of Subordinated Debt Securities. |
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*5.1
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Opinion of Vinson & Elkins L.L.P. as to the legality of the securities being registered. |
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*8.1
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Opinion of Vinson & Elkins L.L.P. as to tax matters. |
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*12.1
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Ratios of earnings to fixed charges. |
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*23.1
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Consent of Deloitte & Touche LLP on annual report on Form 10-K for the year ended December 31, 2006. |
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*23.2
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Consent of Deloitte & Touche LLP on DCP Midstream GP, LPs Consolidated Balance Sheet for the year
ended December 31, 2006 (incorporated by reference as Exhibit 99.1 to the current report on Form
8-K (File No. 001-32678) filed on April 20, 2007). |
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*23.3
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Consent of Deloitte & Touche LLP on DCP Midstream LLCs Consolidated Balance Sheet for the year
ended December 31, 2006 (incorporated by reference as Exhibit 99.2 to the current report on Form
8-K (File No. 001-32678) filed on April 20, 2007). |
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*23.4
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Consent of Vinson & Elkins L.L.P. (contained in Exhibits 5.1 and 8.1). |
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*24.1
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Power of Attorney (included on signature page of this registration statement). |
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* |
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Filed herewith |
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** |
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To be filed as and Exhibit to a Current Report on Form 8-K or in a post-effective amendment
to this registration statement |
II-92
exv4w1
Exhibit 4.1
[Form of Senior Indenture]
DCP MIDSTREAM PARTNERS, LP
DCP MIDSTREAM PARTNERS FINANCE CORP.
as Issuers,
any Subsidiary Guarantors party hereto,
and
[ ],
as Trustee
INDENTURE
Dated as of
Debt Securities
CROSS-REFERENCE TABLE
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TIA Section |
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Indenture Section |
310
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(a)
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7.10 |
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(b)
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7.10 |
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(c)
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N.A. |
311
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(a)
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7.11 |
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(b)
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7.11 |
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(c)
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N.A. |
312
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(a)
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5.01 |
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(b)
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5.02 |
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(c)
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5.02 |
313
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(a)
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5.03 |
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(b)
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5.03 |
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(c)
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13.03 |
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(d)
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5.03 |
314
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(a)
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4.05 |
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(b)
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N.A. |
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(c)(1)
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13.05 |
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(c)(2)
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13.05 |
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(c)(3)
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N.A. |
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(d)
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N.A. |
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(e)
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13.05 |
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(f)
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N.A. |
315
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(a)
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7.01 |
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(b)
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6.07 & 13.03 |
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(c)
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7.01 |
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(d)
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7.01 |
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(e)
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6.08 |
316
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(a) (last sentence)
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1.01 |
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(a)(1)(A)
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6.06 |
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(a)(1)(B)
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6.06 |
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(a)(2)
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9.01(d) |
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(b)
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6.04 |
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(c)
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5.04 |
317
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(a)(1)
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6.02 |
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(a)(2)
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6.02 |
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(b)
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4.04 |
318
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(a)
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13.07 |
N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of this Indenture.
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS AND INCORPORATION BY REFERENCE
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Section 1.01 Definitions |
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1 |
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Section 1.02 Other Definitions |
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6 |
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Section 1.03 Incorporation by Reference of Trust Indenture Act |
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7 |
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Section 1.04 Rules of Construction |
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7 |
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ARTICLE II
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DEBT SECURITIES
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Section 2.01 Forms Generally |
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7 |
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Section 2.02 Form of Trustees Certificate of Authentication |
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7 |
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Section 2.03 Principal Amount; Issuable in Series |
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8 |
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Section 2.04 Execution of Debt Securities |
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10 |
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Section 2.05 Authentication and Delivery of Debt Securities |
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11 |
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Section 2.06 Denomination of Debt Securities |
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12 |
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Section 2.07 Registration of Transfer and Exchange |
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12 |
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Section 2.08 Temporary Debt Securities |
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14 |
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Section 2.09 Mutilated, Destroyed, Lost or Stolen Debt Securities |
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14 |
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Section 2.10 Cancellation of Surrendered Debt Securities |
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15 |
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Section 2.11 Provisions of the Indenture and Debt Securities for the Sole
Benefit of the Parties and the Holders |
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15 |
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Section 2.12 Payment of Interest; Interest Rights Preserved |
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15 |
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Section 2.13 Securities Denominated in Dollars |
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16 |
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Section 2.14 Wire Transfers |
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16 |
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Section 2.15 Securities Issuable in the Form of a Global Security |
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16 |
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Section 2.16 Medium Term Securities |
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19 |
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Section 2.17 Defaulted Interest |
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19 |
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Section 2.18 CUSIP Numbers |
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20 |
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ARTICLE III
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REDEMPTION OF DEBT SECURITIES
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Section 3.01 Applicability of Article |
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20 |
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Section 3.02 Notice of Redemption; Selection of Debt Securities |
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20 |
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Section 3.03 Payment of Debt Securities Called for Redemption |
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22 |
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Section 3.04 Mandatory and Optional Sinking Funds |
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22 |
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Section 3.05 Redemption of Debt Securities for Sinking Fund |
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23 |
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ARTICLE IV
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PARTICULAR COVENANTS OF THE ISSUERS
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Section 4.01 Payment of Principal of, and Premium, If Any, and Interest on,
Debt Securities |
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24 |
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Section 4.02 Maintenance of Offices or Agencies for Registration of
Transfer, Exchange and Payment of Debt Securities |
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25 |
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Section 4.03 Appointment to Fill a Vacancy in the Office of Trustee |
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25 |
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Section 4.04 Duties of Paying Agents, etc. |
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25 |
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Section 4.05 SEC Reports; Financial Statements |
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26 |
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Section 4.06 Compliance Certificate |
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27 |
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Section 4.07 Further Instruments and Acts |
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27 |
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Section 4.08 Existence |
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27 |
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Section 4.09 Maintenance of Properties |
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27 |
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Section 4.10 Payment of Taxes and Other Claims |
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28 |
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Section 4.11 Waiver of Certain Covenants |
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28 |
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ARTICLE V
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HOLDERS LISTS AND REPORTS BY THE TRUSTEE
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Section 5.01 Issuers to Furnish Trustee Information as
to Names and Addresses of Holders;
Preservation of Information |
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28 |
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Section 5.02 Communications to Holders |
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29 |
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Section 5.03 Reports by Trustee |
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29 |
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Section 5.04 Record Dates for Action by Holders |
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29 |
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ARTICLE VI
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REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
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Section 6.01 Events of Default |
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29 |
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Section 6.02 Collection of Debt by Trustee, etc. |
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32 |
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Section 6.03 Application of Moneys Collected by Trustee |
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33 |
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Section 6.04 Limitation on Suits by Holders |
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34 |
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Section 6.05 Remedies Cumulative; Delay
or Omission in Exercise of Rights Not a Waiver of Default |
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34 |
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Section 6.06 Rights of Holders of Majority in Principal Amount of Debt Securities to Direct Trustee and to Waive Default |
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34 |
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Section 6.07 Trustee to Give Notice of Events of Defaults Known to It, but May Withhold Such Notice in Certain Circumstances |
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35 |
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Section 6.08 Requirement of an Undertaking to Pay Costs in Certain Suits under the Indenture or Against the Trustee |
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35 |
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ARTICLE VII
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CONCERNING THE TRUSTEE
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Section 7.01 Certain Duties and Responsibilities |
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36 |
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Section 7.02 Certain Rights of Trustee |
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37 |
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Section 7.03 Trustee Not Liable for Recitals in Indenture or in Debt Securities |
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38 |
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Section 7.04 Trustee, Paying Agent or Registrar May Own Debt Securities |
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38 |
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Section 7.05 Moneys Received by Trustee to Be Held in Trust |
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38 |
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Section 7.06 Compensation and Reimbursement |
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38 |
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Section 7.07 Right of Trustee to Rely on an Officers Certificate Where No Other
Evidence Specifically Prescribed |
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39 |
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Section 7.08 Separate Trustee; Replacement of Trustee |
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39 |
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Section 7.09 Successor Trustee by Merger |
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40 |
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Section 7.10 Eligibility; Disqualification |
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41 |
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Section 7.11 Preferential Collection of Claims Against Issuers |
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41 |
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Section 7.12 Compliance with Tax Laws |
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41 |
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ARTICLE VIII
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CONCERNING THE HOLDERS
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Section 8.01 Evidence of Action by Holders |
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41 |
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Section 8.02 Proof of Execution of Instruments and of Holding of Debt Securities |
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42 |
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Section 8.03 Who May Be Deemed Owner of Debt Securities |
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42 |
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Section 8.04 Instruments Executed by Holders Bind Future Holders |
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42 |
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ARTICLE IX
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SUPPLEMENTAL INDENTURES
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Section 9.01 Purposes for Which Supplemental Indenture May Be Entered into Without Consent
of Holders |
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43 |
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Section 9.02 Modification of Indenture with Consent of Holders of Debt Securities |
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45 |
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Section 9.03 Effect of Supplemental Indentures |
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46 |
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Section 9.04 Debt Securities May Bear Notation of Changes by Supplemental Indentures |
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46 |
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ARTICLE X
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CONSOLIDATION, MERGER, SALE OR CONVEYANCE
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Section 10.01 Consolidations and Mergers of the Issuers |
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46 |
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Section 10.02 Rights and Duties of Successor Company |
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47 |
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ARTICLE XI
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SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
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Section 11.01 Applicability of Article |
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47 |
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Section 11.02 Satisfaction and Discharge of Indenture; Defeasance |
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47 |
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Section 11.03 Conditions of Defeasance |
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48 |
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Section 11.04 Application of Trust Money |
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49 |
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Section 11.05 Repayment to Issuers |
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50 |
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Section 11.06 Indemnity for U.S. Government Obligations |
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50 |
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Section 11.07 Reinstatement |
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50 |
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ARTICLE XII
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[RESERVED]
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This Article XII has been intentionally omitted |
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50 |
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ARTICLE XIII
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MISCELLANEOUS PROVISIONS
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Section 13.01 Successors and Assigns of Issuers Bound by Indenture |
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50 |
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Section 13.02 Acts of Board, Committee or Officer of Successor Issuer Valid |
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50 |
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Section 13.03 Required Notices or Demands |
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50 |
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Section 13.04 Indenture and Debt Securities to Be Construed in Accordance with the
Laws of the State of New York |
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51 |
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Section 13.05 Officers Certificate and Opinion of Counsel to Be Furnished upon Application or Demand by the Issuers |
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52 |
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-iv-
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Section 13.06 Payments Due on Legal Holidays |
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52 |
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Section 13.07 Provisions Required by TIA to Control |
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52 |
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Section 13.08 Computation of Interest on Debt Securities |
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52 |
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Section 13.09 Rules by Trustee, Paying Agent and Registrar |
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52 |
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Section 13.10 No Recourse Against Others |
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53 |
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Section 13.11 Severability |
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53 |
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Section 13.12 Effect of Headings |
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53 |
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Section 13.13 Indenture May Be Executed in Counterparts |
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53 |
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ARTICLE XIV
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GUARANTEE
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Section 14.01 Unconditional Guarantee |
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53 |
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Section 14.02 Execution and Delivery of Guarantee |
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55 |
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Section 14.03 Limitation on Subsidiary Guarantors Liability |
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55 |
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Section 14.04 Release of Subsidiary Guarantors from Guarantee |
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56 |
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Section 14.05 Subsidiary Guarantor Contribution |
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56 |
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Notation of Guarantee |
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Annex A |
-v-
THIS INDENTURE dated as of is among DCP Midstream Partners, LP, a Delaware limited
partnership (the Partnership), DCP Midstream Partners Finance Corp. (Finance Corp., and
together with the Partnership, the Issuers), any Subsidiary Guarantors (as defined herein) party
hereto and [ ], a
, as trustee (the Trustee).
RECITALS OF THE ISSUERS AND ANY SUBSIDIARY GUARANTORS
The Issuers and any Subsidiary Guarantors have duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of the Issuers debentures, notes,
bonds or other evidences of indebtedness to be issued in one or more series unlimited as to
principal amount (herein called the Debt Securities), which Debt Securities may be guaranteed by
each of the Subsidiary Guarantors, as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Issuers and any
Subsidiary Guarantors, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt Securities are
authenticated, issued and delivered, and in consideration of the premises, and of the purchase and
acceptance of the Debt Securities by the Holders thereof, the Issuers, any Subsidiary Guarantor and
the Trustee covenant and agree with each other, for the benefit of the respective Holders from time
to time of the Debt Securities or any series thereof, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
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. The Trustee may request and may
conclusively rely upon an Officers Certificate to determine whether any Person is an Affiliate of
any specified Person.
Agent means any Registrar or paying agent.
Bankruptcy Law means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.
Board of Directors means, (i) with respect to Finance Corp., the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such board, (ii) with
respect to the Partnership, the Board of Directors of the General Partner or any authorized
committee of the Board of Directors of the General Partner or any directors and/or officers of the
-1-
General Partner to whom such Board of Directors or such committee shall have duly delegated
its authority to act hereunder. If the Partnership shall change its form of entity to other than a
limited partnership, the references to the Board of Directors of the General Partner shall mean the
Board of Directors (or other comparable governing body) of the Partnership.
Business Day means any day other than a Legal Holiday.
capital stock of any Person means and includes any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable), participations or other equivalents of
or interests in (however designated) the equity (which includes, but is not limited to, common
stock, preferred stock and partnership and joint venture interests) of such Person (excluding any
debt securities that are convertible into, or exchangeable for, such equity).
Custodian means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Debt of any Person at any date means any obligation created or assumed by such Person for
the repayment of borrowed money and any guarantee thereof.
Debt Security or Debt Securities has the meaning stated in the first recital of this
Indenture and more particularly means any debt security or debt securities, as the case may be, of
any series authenticated and delivered under this Indenture.
Default means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.
Depositary means, unless otherwise specified by the Issuers pursuant to either Section 2.03
or 2.15, with respect to Debt Securities of any series issuable or issued in whole or in part in
the form of one or more Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or other applicable
statute or regulations.
Dollar or $ means such currency of the United States as at the time of payment is legal
tender for the payment of public and private debts.
Exchange Act means the Securities Exchange Act of 1934, as amended, and any successor
statute.
Finance Corp. means the Person named as Finance Corp. in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the applicable terms of this
Indenture, and thereafter Finance Corp. shall mean such successor Person.
Floating Rate Security means a Debt Security that provides for the payment of interest at a
variable rate determined periodically by reference to an interest rate index specified pursuant to
Section 2.03.
GAAP means generally accepted accounting principles in the United States, as in effect from
time to time.
-2-
General Partner means DCP Midstream GP, LLC, a Delaware limited liability company, and its
successors and permitted assigns as general partner of DCP Midstream GP, LP, a Delaware limited
partnership, and its successors and permitted assigns as general partner of the Partnership or as
the business entity with the ultimate authority to manage the business and operations of the
Partnership.
Global Security means with respect to any series of Debt Securities issued hereunder, a Debt
Security which is executed by the Issuers and authenticated and delivered by the Trustee to the
Depositary or pursuant to the Depositarys instruction, all in accordance with this Indenture and
any Indentures supplemental hereto, or resolution of the Board of Directors and set forth in an
Officers Certificate, which shall be registered in the name of the Depositary or its nominee and
which shall represent, and shall be denominated in an amount equal to the aggregate principal
amount of, all the Outstanding Debt Securities of such series or any portion thereof, in either
case having the same terms, including, without limitation, the same original issue date, date or
dates on which principal is due and interest rate or method of determining interest.
guarantee means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt or other obligation of any other Person and any obligation, direct
or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (b) entered into for purposes of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The term guarantee
used as a verb has a corresponding meaning.
Holder, Holder of Debt Securities or other similar terms means, a Person in whose name a
Debt Security is registered in the Debt Security Register (as defined in Section 2.07(a)).
Indenture means this instrument as originally executed, or, if amended or supplemented as
herein provided, as so amended or supplemented and shall include the form and terms of particular
series of Debt Securities as contemplated hereunder, whether or not a supplemental Indenture is
entered into with respect thereto.
Issuers means the Partnership and Finance Corp.
Issuer Order means a written request or order signed on behalf of each of the Issuers by one
of its Officers and delivered to the Trustee.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions in the City
of Houston, Texas, City of New York, New York or at a Place of Payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal Holiday at a Place of
Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
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Lien means, with respect to any asset, any mortgage, lien, security interest, pledge, charge
or other encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law.
Officer means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Vice President of such Person (or, if
such Person is a limited partnership, the general partner of such Person, except it shall be the
General Partner in the case of the Partnership so long as it is a limited partnership).
Officers Certificate means a certificate signed on behalf of each Issuer by any two of its
Officers, one of whom must be the principal executive officer, the principal financial officer or
the principal accounting officer of such Issuer, that meets the requirements of Section 13.05
hereof.
Opinion of Counsel means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Partnership or the Trustee.
Original Issue Discount Debt Security means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration of acceleration of
the maturity thereof pursuant to Section 6.01.
Outstanding, when used with respect to any series of Debt Securities, means, as of the date
of determination, all Debt Securities of that series theretofore authenticated and delivered under
this Indenture, except:
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Debt Securities of that series theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; |
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Debt Securities of that series for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any paying agent
(other than an Issuer) in trust or set aside and segregated in trust by the Issuers (if
an Issuer shall act as its own paying agent) for the Holders of such Debt Securities;
provided, that, if such Debt Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and |
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Debt Securities of that series which have been paid pursuant to Section 2.09 or
in exchange for or in lieu of which other Debt Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Debt Securities in respect of
which there shall have been presented to the Trustee proof satisfactory to it that such
Debt Securities are held by a protected purchaser in whose hands such Debt Securities
are valid obligations of the Issuers; |
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Debt Securities of any series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Debt Securities owned by either of the Issuers or any other
obligor upon the Debt Securities or any Affiliate of the Partnership or of such other
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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 Debt Securities which a Trust Officer actually knows to be so owned
shall be so disregarded. Debt 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 pledgees
right so to act with respect to such Debt Securities and that the pledgee is not an Issuer or any
other obligor upon the Debt Securities or an Affiliate of the Partnership or of such other obligor.
In determining whether the Holders of the requisite principal amount of Outstanding Debt
Securities have given any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt Security that shall be deemed to
be Outstanding for such purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration of the maturity
thereof pursuant to Section 6.01.
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.
Person means any individual, corporation, partnership, joint venture, limited liability
company, incorporated or unincorporated association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof or other entity of any
kind.
Redemption Date, when used with respect to any Debt Security to be redeemed, means the date
fixed for such redemption by or pursuant to this Indenture.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended, and any successor statute.
Stated Maturity means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).
Subsidiary of any Person means:
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any corporation, association or other business entity of which more than 50% of
the total voting power of equity interests entitled, without regard to the occurrence
of any contingency, to vote in the election of directors, managers, trustees or
equivalent Persons thereof is at the time of determination owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries of such
Person or combination thereof; or |
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in the case of a partnership, more than 50% of the partners equity interests,
considering all partners equity interests as a single class, is at such time of
determination owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of such Person or combination thereof. |
Subsidiary Guarantors means any Subsidiary of the Partnership (except Finance Corp.) who may
execute this Indenture, or a supplement hereto, for the purpose of providing a Guarantee of Debt
Securities pursuant to this Indenture until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter Subsidiary Guarantors shall mean such
successor Person.
TIA means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb), as in
effect on the date of this Indenture as originally executed and, to the extent required by law, as
amended.
Trustee initially means [ ] and any other Person or Persons appointed as
such from time to time pursuant to Section 7.08, and, subject to the provisions of Article VII,
includes its or their successors and assigns. If at any time there is more than one such Person,
Trustee as used with respect to the Debt Securities of any series shall mean the Trustee with
respect to the Debt Securities of that series.
Trust Officer means any officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
United States means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its jurisdiction.
U.S. Government Obligations means direct obligations of the United States of America,
obligations on which the payment of principal and interest is fully guaranteed by the United States
of America or obligations or guarantees for the payment of which the full faith and credit of the
United States of America is pledged.
Yield to Maturity means the yield to maturity, calculated at the time of issuance of a
series of Debt Securities, or, if applicable, at the most recent redetermination of interest on
such series and calculated in accordance with accepted financial practice.
Section 1.02 Other Definitions.
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Term |
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Defined in Section |
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Debt Security Register |
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2.07 |
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Defaulted Interest |
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2.17 |
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Event of Default |
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6.01 |
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Funding Guarantor |
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14.05 |
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Guarantee |
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14.01 |
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Place of Payment |
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2.03 |
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Registrar |
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2.07 |
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Successor Company |
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10.01 |
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Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture.
All terms used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;
(c) or is not exclusive;
(d) words in the singular include the plural, and in the plural include the singular;
(e) provisions apply to successive events and transactions; and
(f) the principal amount of any noninterest bearing or other discount security at any date
shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP.
ARTICLE II
DEBT SECURITIES
Section 2.01 Forms Generally. The Debt Securities of each series shall be in
substantially the form established without the approval of any Holder by or pursuant to a
resolution of the Board of Directors of each Issuer or in one or more Indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as the Issuers may
deem appropriate (and, if not contained in a supplemental Indenture entered into in accordance with
Article IX, as are not prohibited by the provisions of this Indenture) or as may be required or
appropriate to comply with any law or with any rules made pursuant thereto or with any rules of any
securities exchange on which such series of Debt Securities may be listed, or to conform to general
usage, or as may, consistently herewith, be determined by the officers executing such Debt
Securities as evidenced by their execution of the Debt Securities.
The definitive Debt Securities of each series 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 Debt Securities, as evidenced by their execution of such Debt Securities.
Section 2.02 Form of Trustees Certificate of Authentication. The Trustees
certificate of authentication on all Debt Securities authenticated by the Trustee shall be in
substantially the following form:
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TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein referred to in the
within-mentioned Indenture.
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[ ], |
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As Trustee |
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By: |
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Authorized Signatory |
Section 2.03 Principal Amount; Issuable in Series. The aggregate principal amount of
Debt Securities which may be issued, executed, authenticated, delivered and outstanding under this
Indenture is unlimited.
The Debt Securities may be issued in one or more series in fully registered form. There shall
be established, without the approval of any Holders, in or pursuant to a resolution of the Board of
Directors of each Issuer and set forth in an Officers Certificate, or established in one or more
Indentures supplemental hereto, prior to the issuance of Debt Securities of any series any or all
of the following:
(a) the title of the Debt Securities of the series (which shall distinguish the Debt
Securities of the series from all other Debt Securities);
(b) any limit upon the aggregate principal amount of the Debt Securities of the series which
may be authenticated and delivered under this Indenture (except for Debt Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
(c) the date or dates on which the principal of and premium, if any, on the Debt Securities of
the series are payable;
(d) the rate or rates (which may be fixed or variable) at which the Debt Securities of the
series shall bear interest, if any, or the method of determining such rate or rates, the date or
dates from which such interest shall accrue, the interest payment dates on which such interest
shall be payable, or the method by which such date will be determined, the record dates for the
determination of Holders thereof to whom such interest is payable; and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve thirty-day months;
(e) the place or places, if any, in addition to or instead of the corporate trust office of
the Trustee, where the principal of, and premium, if any, and interest on, Debt Securities of the
series shall be payable (Place of Payment);
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(f) the price or prices at which, the period or periods within which and the terms and
conditions upon which Debt Securities of the series may be redeemed, in whole or in part, at the
option of the Issuers or otherwise;
(g) whether Debt Securities of the series are entitled to the benefits of any Guarantee of any
Subsidiary Guarantors pursuant to this Indenture;
(h) the obligation, if any, of the Issuers to redeem, purchase or repay Debt Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof,
and the price or prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligations;
(i) the terms, if any, upon which the Debt Securities of the series may be convertible into or
exchanged for capital stock (which may be represented by depositary shares), other Debt Securities
or warrants for capital stock or Debt or other securities of any kind of either of the Issuers or
any other obligor and the terms and conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the conversion or exchange
period and any other provision in addition to or in lieu of those described herein;
(j) if other than denominations of $1,000 and any integral multiple thereof, the denominations
in which Debt Securities of the series shall be issuable;
(k) if the amount of principal of or any premium or interest on Debt Securities of the series
may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts will be determined;
(l) if the principal amount payable at the Stated Maturity of Debt Securities of the series
will not be determinable as of any one or more dates prior to such Stated Maturity, the amount
which will be deemed to be such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity other than the Stated
Maturity or which will be deemed to be Outstanding as of any such date (or, in any such case, the
manner in which such deemed principal amount is to be determined);
(m) any changes or additions to Article XI, including the addition of additional covenants
that may be subject to the covenant defeasance option pursuant to Section 11.02(b);
(n) if other than the principal amount thereof, the portion of the principal amount of Debt
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01 or provable in bankruptcy pursuant to Section 6.02;
(o) the terms, if any, of the transfer, mortgage, pledge or assignment as security for the
Debt Securities of the series of any properties, assets, moneys, proceeds, securities or other
collateral, including whether certain provisions of the TIA are applicable and any corresponding
changes to provisions of this Indenture as currently in effect;
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(p) any addition to or change in the Events of Default with respect to the Debt Securities of
the series and any change in the right of the Trustee or the Holders to declare the principal of,
and premium and interest on, such Debt Securities due and payable;
(q) if the Debt Securities of the series shall be issued in whole or in part in the form of a
Global Security or Securities, the terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual Debt Securities in definitive
registered form; and the Depositary for such Global Security or Securities and the form of any
legend or legends to be borne by any such Global Security or Securities in addition to or in lieu
of the legend referred to in Section 2.15(a);
(r) any trustees, authenticating or paying agents, transfer agents or registrars;
(s) the applicability of, and any addition to or change in the covenants and definitions
currently set forth in this Indenture or in the terms currently set forth in Article X, including
conditioning any merger, conveyance, transfer or lease permitted by Article X upon the satisfaction
of any Debt coverage standard by the Issuers and Successor Company (as defined in Article X);
(t) with regard to Debt Securities of the series that do not bear interest, the dates for
certain required reports to the Trustee; and
(u) any other terms of the Debt Securities of the series (which terms shall not be prohibited
by the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to such resolution of the Board
of Directors and as set forth in such Officers Certificate or in any such Indenture supplemental
hereto.
Section 2.04 Execution of Debt Securities. The Debt Securities shall be signed on
behalf of each of the Issuers by at least one of its Officers. Such signatures upon the Debt
Securities may be the manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Debt Securities.
Only such Debt Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, signed manually by the Trustee, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Debt Security executed on behalf of each of the Issuers by at least one of its Officers shall
be conclusive evidence that the Debt Security so authenticated has been duly authenticated and
delivered hereunder.
In case any Officer of either Issuer who shall have signed any of the Debt Securities shall
cease to be such Officer before the Debt Securities so signed shall have been authenticated and
delivered by the Trustee, or disposed of by the Issuers, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such Debt Securities had
not ceased to be such Officer; and any Debt Security may be signed on behalf of either Issuer by
such Persons as, at the actual date of the execution of such Debt Security, shall be the
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proper Officers of such Issuer, although at the date of such Debt Security or of the execution
of this Indenture any such Person was not such Officer.
Section 2.05 Authentication and Delivery of Debt Securities. At any time and from
time to time after the execution and delivery of this Indenture, the Issuers may deliver to the
Trustee for authentication Debt Securities of any series executed by the Issuers, and the Trustee
shall thereupon authenticate and deliver said Debt Securities to or upon an Issuer Order. In
authenticating such Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying upon:
(a) a copy of any resolution or resolutions of the Board of Directors of each Issuer,
certified by the Secretary or Assistant Secretary of each of the General Partner and Finance Corp.,
authorizing the terms of issuance of any series of Debt Securities;
(b) an executed supplemental Indenture, if any;
(c) an Officers Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section 13.05 which shall also state:
(i) that the form of such Debt Securities has been established by or pursuant to a
resolution of the Board of Directors of each Issuer or by a supplemental Indenture as
permitted by Section 2.01 in conformity with the provisions of this Indenture;
(ii) that the terms of such Debt Securities have been established by or pursuant to a
resolution of the Board of Directors or by a supplemental Indenture as permitted by Section
2.03 in conformity with the provisions of this Indenture;
(iii) that such Debt Securities, when authenticated and delivered by the Trustee and
issued by the Issuers in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of the Issuers,
enforceable in accordance with their terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors
rights generally and rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;
(iv) that the Issuers have the power to issue such Debt Securities and has duly taken
all necessary action with respect to such issuance;
(v) that the issuance of such Debt Securities will not contravene the organizational
documents of the Issuers or result in any material violation of any of the terms or
provisions of any law or regulation or of any material indenture, mortgage or other
agreement known to such counsel by which the Issuers are bound;
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(vi) that authentication and delivery of such Debt Securities and the execution and
delivery of any supplemental Indenture will not violate the terms of this Indenture; and
(vii) such other matters as the Trustee may reasonably request.
Such Opinion of Counsel need express no opinion as to whether a court in the United States
would render a money judgment in a currency other than that of the United States.
The Trustee shall have the right to decline to authenticate and deliver any Debt Securities
under this Section 2.05 if the Trustee, being advised by counsel, determines that such action may
not lawfully be taken or if the Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee of directors, trustees or Officers (or any combination
thereof) shall determine that such action would expose the Trustee to personal liability to
existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to
authenticate Debt Securities of any series. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Debt Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as any Registrar, paying agent or agent for service of
notices and demands.
Unless otherwise provided in the form of Debt Security for any series, each Debt Security
shall be dated the date of its authentication.
Section 2.06 Denomination of Debt Securities. Unless otherwise provided in the form
of Debt Security for any series, the Debt Securities of each series shall be issuable only as fully
registered Debt Securities in such Dollar denominations as shall be specified or contemplated by
Section 2.03. In the absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.
Section 2.07 Registration of Transfer and Exchange.
(a) The Issuers shall keep or cause to be kept a register for each series of Debt Securities
issued hereunder (hereinafter collectively referred to as the Debt Security Register), in which,
subject to such reasonable regulations as it may prescribe, the Issuers shall provide for the
registration of all Debt Securities and the transfer of Debt Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for inspection by the
Trustee. Subject to Section 2.15, upon due presentment for registration of transfer of any Debt
Security at any office or agency to be maintained by the Issuers in accordance with the provisions
of Section 4.02, the Issuers shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Debt Security or Debt Securities of authorized
denominations for a like aggregate principal amount. In no event may Debt Securities be issued as,
or exchanged for, bearer securities.
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Unless and until otherwise determined by the Issuers by resolutions of each Issuers Board of
Directors, the Debt Security Register shall be kept at the principal corporate trust office of the
Trustee and, for this purpose, the Trustee shall be designated Registrar.
Debt Securities of any series (other than a Global Security, except as set forth below) may be
exchanged for a like aggregate principal amount of Debt Securities of the same series of other
authorized denominations. Subject to Section 2.15, Debt Securities to be exchanged shall be
surrendered at the office or agency to be maintained by the Issuers as provided in Section 4.02,
and the Issuers shall execute and the Trustee shall authenticate and deliver in exchange therefor
the Debt Security or Debt Securities which the Holder making the exchange shall be entitled to
receive.
(b) All Debt Securities presented or surrendered for registration of transfer, exchange or
payment shall (if so required by the Issuers, the Trustee or the Registrar) be duly endorsed or be
accompanied by a written instrument or instruments of transfer, in form satisfactory to the
Issuers, the Trustee and the Registrar, duly executed by the Holder or his attorney duly authorized
in writing.
All Debt Securities issued in exchange for or upon transfer of Debt Securities shall be the
valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under
this Indenture as the Debt Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of transfer of Debt
Securities (except as provided by Section 2.09), but the Issuers may require payment of a sum
sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in
relation thereto, other than those expressly provided in this Indenture to be made at the Issuers
own expense or without expense or without charge to the Holders.
The Issuers shall not be required (i) to issue, register the transfer of or exchange any Debt
Securities for a period of 15 days next preceding any mailing of notice of redemption of Debt
Securities of such series or (ii) to register the transfer of or exchange any Debt Securities
selected, called or being called for redemption.
Prior to the due presentation for registration of transfer of any Debt Security, the Issuers,
the Subsidiary Guarantors, the Trustee, any paying agent or any Registrar may deem and treat the
Person in whose name a Debt Security is registered as the absolute owner of such Debt Security for
the purpose of receiving payment of or on account of the principal of, and premium, if any, and
(subject to Section 2.12) interest on, such Debt Security and for all other purposes whatsoever,
whether or not such Debt Security is overdue, and none of the Issuers, the Subsidiary Guarantors,
the Trustee, any paying agent or any Registrar shall be affected by notice to the contrary.
None of the Issuers, the Subsidiary Guarantors, the Trustee, any agent of the Trustee, any
paying agent or any Registrar 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.
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Section 2.08 Temporary Debt Securities. Pending the preparation of definitive Debt
Securities of any series, the Issuers may execute and the Trustee shall authenticate and deliver
temporary Debt Securities (printed, lithographed, photocopied, typewritten or otherwise produced)
of any authorized denomination, and substantially in the form of the definitive Debt Securities in
lieu of which they are issued, in registered form with such omissions, insertions and variations as
may be appropriate for temporary Debt Securities, all as may be determined by the Issuers with the
concurrence of the Trustee. Temporary Debt Securities may contain such reference to any provisions
of this Indenture as may be appropriate. Every temporary Debt Security shall be executed by the
Issuers and be authenticated by the Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the Issuers will cause definitive Debt
Securities of such series to be prepared without unreasonable delay. After the preparation of
definitive Debt Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Issuers at a Place of Payment for such
series, without charge to the Holder thereof, except as provided in Section 2.07 in connection with
a transfer. Upon surrender for cancellation of any one or more temporary Debt Securities of any
series, the Issuers shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Debt Securities of the same series of authorized
denominations and of like tenor. Until so exchanged, temporary Debt Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities
of such series.
Upon any exchange of a portion of a temporary Global Security for a definitive Global Security
or for the individual Debt Securities represented thereby pursuant to Section 2.07 or this Section
2.08, the temporary Global Security shall be endorsed by the Trustee to reflect the reduction of
the principal amount evidenced thereby, whereupon the principal amount of such temporary Global
Security shall be reduced for all purposes by the amount to be exchanged and endorsed.
Section 2.09 Mutilated, Destroyed, Lost or Stolen Debt Securities. If (a) any
mutilated Debt Security is surrendered to the Trustee at its corporate trust office or (b) the
Issuers and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of
any Debt Security, and there is delivered to the Issuers and the Trustee such security or indemnity
as may be required by them to save each of them and any paying agent harmless, and neither the
Issuers nor the Trustee receives notice that such Debt Security has been acquired by a protected
purchaser, then the Issuers shall execute and, upon an Issuer Order, the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Debt
Security, a new Debt Security of the same series of like tenor, form, terms and principal amount,
bearing a number not contemporaneously Outstanding. Upon the issuance of any substituted Debt
Security, the Issuers or the Trustee may require the payment of a sum sufficient to cover any tax,
fee, assessment or other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Debt Security which has matured or is about to mature or
which has been called for redemption shall become mutilated or be destroyed, lost or stolen, the
Issuers may, instead of issuing a substituted Debt Security, pay or authorize the
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payment of the same (without surrender thereof except in the case of a mutilated Debt
Security) if the applicant for such payment shall furnish the Issuers and the Trustee with such
security or indemnity as either may require to save it harmless from all risk, however remote, and,
in case of destruction, loss or theft, evidence to the satisfaction of the Issuers and the Trustee
of the destruction, loss or theft of such Debt Security and of the ownership thereof.
Every substituted Debt Security of any series issued pursuant to the provisions of this
Section 2.09 by virtue of the fact that any Debt Security is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Issuers, whether or not the
destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all other Debt Securities
of that series duly issued hereunder. All Debt Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities, and shall preclude any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with
respect to the replacement or payment of negotiable instruments or other securities without their
surrender.
Section 2.10 Cancellation of Surrendered Debt Securities. All Debt Securities
surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to
an Issuer or any paying agent or a Registrar, be delivered to the Trustee for cancellation by it,
or if surrendered to the Trustee, shall be canceled by it, and no Debt Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Indenture. All
canceled Debt Securities held by the Trustee shall be destroyed (subject to the record retention
requirements of the Exchange Act) and certification of their destruction delivered to the Issuers,
unless otherwise directed. On request of the Issuers, the Trustee shall deliver to the Issuers
canceled Debt Securities held by the Trustee. If either of the Issuers shall acquire any of the
Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
Debt represented thereby unless and until the same are delivered or surrendered to the Trustee for
cancellation. The Issuers may not issue new Debt Securities to replace Debt Securities it has
redeemed, paid or delivered to the Trustee for cancellation.
Section 2.11 Provisions of the Indenture and Debt Securities for the Sole Benefit of the
Parties and the Holders. Nothing in this Indenture or in the Debt Securities, expressed or
implied, shall give or be construed to give to any Person, other than the parties hereto, the
Holders or any Registrar or paying agent, any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein contained; all its
covenants, conditions and provisions being for the sole benefit of the parties hereto, the Holders
and any Registrar and paying agents.
Section 2.12 Payment of Interest; Interest Rights Preserved.
(a) Interest on any Debt Security that is payable and is punctually paid or duly provided for
on any interest payment date shall be paid to the Person in whose name such Debt Security is
registered at the close of business on the regular record date for such interest notwithstanding
the cancellation of such Debt Security upon any transfer or exchange subsequent to the regular
record date. Payment of interest on Debt Securities shall be made at the corporate
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trust office of the Trustee (except as otherwise specified pursuant to Section 2.03), or at
the option of the Issuers, by check mailed to the address of the Person entitled thereto as such
address shall appear in the Debt Security Register or, if provided pursuant to Section 2.03 and in
accordance with arrangements satisfactory to the Trustee, at the option of the Holder by wire
transfer to an account designated by the Holder.
(b) Subject to the foregoing provisions of this Section 2.12 and Section 2.17, each Debt
Security of a particular series delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other Debt Security.
Section 2.13 Securities Denominated in Dollars. Except as otherwise specified
pursuant to Section 2.03 for Debt Securities of any series, payment of the principal of, and
premium, if any, and interest on, Debt Securities of such series will be made in Dollars.
Section 2.14 Wire Transfers. Notwithstanding any other provision to the contrary in
this Indenture, the Issuers may make any payment of moneys required to be deposited with the
Trustee on account of principal of, or premium, if any, or interest on, the Debt Securities
(whether pursuant to optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the Trustee before 11:00
a.m., New York City time, on the date such moneys are to be paid to the Holders of the Debt
Securities in accordance with the terms hereof.
Section 2.15 Securities Issuable in the Form of a Global Security.
(a) If the Issuers shall establish pursuant to Sections 2.01 and 2.03 that the Debt Securities
of a particular series are to be issued in whole or in part in the form of one or more Global
Securities, then the Issuers shall execute and the Trustee or its agent shall, in accordance with
Section 2.05, authenticate and deliver, such Global Security or Securities, which shall represent,
and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding
Debt Securities of such series to be represented by such Global Security or Securities, or such
portion thereof as the Issuers shall specify in an Officers Certificate, shall be registered in
the name of the Depositary for such Global Security or Securities or its nominee, shall be
delivered by the Trustee or its agent to the Depositary or pursuant to the Depositarys instruction
and shall bear a legend substantially to the following effect:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO HEREIN.
or such other legend as may then be required by the Depositary for such Global Security or
Securities.
(b) Notwithstanding any other provision of this Section 2.15 or of Section 2.07 to the
contrary, and subject to the provisions of paragraph (c) below, unless the terms of a Global
Security expressly permit such Global Security to be exchanged in whole or in part for definitive
Debt Securities in registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee of the Depositary
for such Global Security, or by a nominee of the Depositary to the Depositary or another nominee of
the Depositary, or by the Depositary or a nominee of the Depositary to a successor Depositary for
such Global Security selected or approved by the Issuers, or to a nominee of such successor
Depositary.
(c) (i) If at any time the Depositary for a Global Security or Securities notifies the Issuers
that it is unwilling or unable to continue as Depositary for such Global Security or Securities or
if at any time the Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or regulation, the
Issuers shall appoint a successor Depositary with respect to such Global Security or Securities.
If a successor Depositary for such Global Security or Securities is not appointed by the Issuers
within 90 days after the Issuers receive such notice or becomes aware of such ineligibility, the
Issuers shall execute, and the Trustee or its agent, upon receipt of an Issuer Order for the
authentication and delivery of such individual Debt Securities of such series in exchange for such
Global Security or Securities, will authenticate and deliver, individual Debt Securities of such
series of like tenor and terms in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities in exchange for such Global Security or
Securities.
(ii) If an Event of Default occurs and the Depositary for a Global Security or
Securities notifies the Trustee of its decision to require that the Debt Securities of any
series or portion thereof issued or issuable in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities, the Issuers shall
appoint a successor Depositary with respect to such Global Security or Securities. In such
event the Issuers will execute, and the Trustee, upon receipt of an Issuer Order for the
authentication and delivery of individual Debt Securities of such series in exchange in
whole or in part for such Global Security or Securities, will authenticate and deliver
individual Debt Securities of such series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such series or portion thereof
in exchange for such Global Security or Securities.
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(iii) If specified by the Issuers pursuant to Sections 2.01 and 2.03 with respect to
Debt Securities issued or issuable in the form of a Global Security, the Depositary for such
Global Security may surrender such Global Security in exchange in whole or in part for
individual Debt Securities of such series of like tenor and terms in definitive form on such
terms as are acceptable to the Issuers, the Trustee and such Depositary. Thereupon the
Issuers shall execute, and the Trustee or its agent upon receipt of an Issuer Order for the
authentication and delivery of definitive Debt Securities of such series shall authenticate
and deliver, without service charge, to each Person specified by such Depositary a new Debt
Security or Securities of the same series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount equal to and in
exchange for such Persons beneficial interest in the Global Security; and to such
Depositary a new Global Security of like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of Debt Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three paragraphs, the
Issuers will execute and the Trustee or its agent will authenticate and deliver individual
Debt Securities. Upon the exchange of the entire principal amount of a Global Security for
individual Debt Securities, such Global Security shall be canceled by the Trustee or its
agent. Except as provided in the preceding paragraph, Debt Securities issued in exchange
for a Global Security pursuant to this Section 2.15 shall be registered in such names and in
such authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall instruct the
Trustee or the Registrar. The Trustee or the Registrar shall deliver such Debt Securities
to the Persons in whose names such Debt Securities are so registered.
(v) Payments in respect of the principal of and interest on any Debt Securities
registered in the name of the Depositary or its nominee will be payable to the Depositary or
such nominee in its capacity as the registered owner of such Global Security. The Issuers,
any Subsidiary Guarantors and the Trustee may treat the Person in whose name the Debt
Securities, including the Global Security, are registered as the owner thereof for the
purpose of receiving such payments and for any and all other purposes whatsoever. None of
the Issuers, any Subsidiary Guarantors, the Trustee, any Registrar, the paying agent or any
agent of the Issuers, any Subsidiary Guarantors or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on account of the
beneficial ownership interests of the Global Security by the Depositary or its nominee or
any of the Depositarys direct or indirect participants, or for maintaining, supervising or
reviewing any records of the Depositary, its nominee or any of its direct or indirect
participants relating to the beneficial ownership interests of the Global Security, the
payments to the beneficial owners of the Global Security of amounts paid to the Depositary
or its nominee, or any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants. None of the Issuers,
any Subsidiary Guarantors, the Trustee or any such agent will be liable for any delay by the
Depositary, its nominee, or any of its direct or indirect participants in identifying the
beneficial owners of the Debt Securities, and the Issuers, any Subsidiary Guarantors and the
Trustee may conclusively rely on, and will be protected in relying on, instructions
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from the Depositary or its nominee for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the Debt Securities to
be issued).
Section 2.16 Medium Term Securities. Notwithstanding any contrary provision herein,
if all Debt Securities of a series are not to be originally issued at one time, it shall not be
necessary for each of the Issuers to deliver to the Trustee an Officers Certificate, resolutions
of each such Issuers Board of Directors, supplemental Indenture, Opinion of Counsel or written
order or any other document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of authentication of each Debt Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon original issuance of
the first such Debt Security of such series to be issued; provided, that any subsequent request by
the Issuers to the Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Issuers that, as of the date of such request,
the statements made in the Officers Certificate delivered pursuant to Section 2.05 or 13.05 shall
be true and correct as if made on such date and that the Opinion of Counsel delivered at or prior
to such time of authentication of an original issuance of Debt Securities shall specifically state
that it shall relate to all subsequent issuances of Debt Securities of such series that are
identical to the Debt Securities issued in the first issuance of Debt Securities of such series.
An Issuer Order delivered by the Issuers to the Trustee in the circumstances set forth in the
preceding paragraph, may provide that Debt Securities which are the subject thereof will be
authenticated and delivered by the Trustee or its agent on original issue from time to time upon
the telephonic or written order of Persons designated in such written order (any such telephonic
instructions to be promptly confirmed in writing by such Person) and that such Persons are
authorized to determine, consistent with the Officers Certificate, supplemental Indenture or
resolution of the Board of Directors relating to such written order, such terms and conditions of
such Debt Securities as are specified in such Officers Certificate, supplemental Indenture or such
resolution.
Section 2.17 Defaulted Interest. Any interest on any Debt Security of a particular
series which is payable, but is not punctually paid or duly provided for, on the dates and in the
manner provided in the Debt Securities of such series and in this Indenture (herein called
Defaulted Interest) shall forthwith cease to be payable to the Holder thereof on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest may be paid by the
Issuers, at their election in each case, as provided in clause (i) or (ii) below:
(i) The Issuers may elect to make payment of any Defaulted Interest to the Persons in
whose names the Debt Securities of such series 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 Issuers shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Debt Security of such series and the
date of the proposed payment, and at the same time the Issuers 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
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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 Issuers of such special record date and, in the name and at the expense
of the Issuers, shall cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first class postage pre-paid, to each Holder
thereof at its address as it appears in the Debt 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 Debt Securities of such series are
registered at the close of business on such special record date.
(ii) The Issuers may make payment of any Defaulted Interest on the Debt Securities of
such series in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debt Securities of such series may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the Issuers to the
Trustee of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Section 2.18 CUSIP Numbers. The Issuers in issuing the Debt Securities may use
CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the accuracy of such numbers either as printed on the Debt 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 Debt Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Issuers will promptly notify the
Trustee in writing of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01 Applicability of Article. The provisions of this Article shall be
applicable to the Debt Securities of any series which are redeemable before their Stated Maturity
except as otherwise specified as contemplated by Section 2.03 for Debt Securities of such series.
Section 3.02 Notice of Redemption; Selection of Debt Securities. In case the Issuers
shall desire to exercise the right to redeem all or, as the case may be, any part of the Debt
Securities of any series in accordance with their terms, by resolution of the Board of Directors of
each Issuer or a supplemental Indenture, the Issuers shall fix a date for redemption and shall give
notice of such redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the Holders of Debt Securities of such series so to be redeemed as a whole or in
part, in the manner provided in Section 13.03. The notice if given in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to the Holder of any
Debt Security of a series designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debt Security of such series.
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Each such notice of redemption shall specify (i) the date fixed for redemption, (ii) the
redemption price at which Debt Securities of such series are to be redeemed (or the method of
calculating such redemption price), (iii) the Place or Places of Payment that payment will be made
upon presentation and surrender of such Debt Securities, (iv) that any interest accrued to the date
fixed for redemption will be paid as specified in said notice, (v) that the redemption is for a
sinking fund payment (if applicable), (vi) that, unless otherwise specified in such notice, if the
Issuers default in making such redemption payment the paying agent is prohibited from making such
payment pursuant to the terms of this Indenture, (vii) that on and after said date any interest
thereon or on the portions thereof to be redeemed will cease to accrue, (viii) that in the case of
Original Issue Discount Securities original issue discount accrued after the date fixed for
redemption will cease to accrue, (ix) the terms of the Debt Securities of that series pursuant to
which the Debt Securities of that series are being redeemed and (x) that no representation is made
as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on
the Debt Securities of that series. If less than all the Debt Securities of a series are to be
redeemed the notice of redemption shall specify the certificate numbers of any Debt Securities of
that series to be redeemed that are not in global form. In case any Debt Security of a series is
to be redeemed in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Debt Security, a new Debt Security or Debt Securities of that series in principal
amount equal to the unredeemed portion thereof, will be issued.
At least five days before the giving of any notice of redemption, unless the Trustee consents
to a shorter period, the Issuers shall give written notice to the Trustee of the Redemption Date,
the principal amount of Debt Securities to be redeemed and the series and terms of the Debt
Securities pursuant to which such redemption will occur. Such notice shall be accompanied by an
Officers Certificate and an Opinion of Counsel from the Issuers to the effect that such redemption
will comply with the conditions herein, and such notice may be revoked at any time prior to the
giving of a notice of redemption to the Holders pursuant to this Section 3.02. If fewer than all
the Debt Securities of a series are to be redeemed, the record date relating to such redemption
shall be selected by the Issuers and given in writing to the Trustee, which record date shall be
not less than three days after the date of notice to the Trustee.
By 11 a.m., New York City time, on the Redemption Date for any Debt Securities, the Issuers
shall deposit with the Trustee or with a paying agent (or, if an Issuer is acting as its own paying
agent, segregate and hold in trust) an amount of money in Dollars (except as provided pursuant to
Section 2.03) sufficient to pay the redemption price of such Debt Securities or any portions
thereof that are to be redeemed on that date, together with any interest accrued to the Redemption
Date.
If less than all the Debt Securities of like tenor and terms of a series are to be redeemed
(other than pursuant to mandatory sinking fund redemptions), the Trustee shall select, on a pro
rata basis, by lot or by such other method as in its sole discretion it shall deem appropriate and
fair, the Debt Securities of that series or portions thereof (in multiples of $1,000) to be
redeemed. In any case where more than one Debt Security of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so registered as if it
were represented by one Debt Security of such series. The Trustee shall promptly notify the
Issuers in writing of the Debt Securities selected for redemption and, in the case of any Debt
Securities
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selected for partial redemption, the principal amount thereof to be redeemed. If any Debt
Security called for redemption shall not be so paid upon surrender thereof on such Redemption Date,
the principal, premium, if any, and interest shall bear interest until paid from the Redemption
Date at the rate borne by the Debt Securities of that series. If less than all the Debt Securities
of unlike tenor and terms of a series are to be redeemed, the particular Debt Securities to be
redeemed shall be selected by the Issuers. Provisions of this Indenture that apply to Debt
Securities called for redemption also apply to portions of Debt Securities called for redemption.
Section 3.03 Payment of Debt Securities Called for Redemption. If notice of
redemption has been given as provided in Section 3.02, the Debt Securities or portions of Debt
Securities of the series with respect to which such notice has been given shall become due and
payable on the date and at the Place or Places of Payment stated in such notice at the applicable
redemption price, together with any interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuers shall default in the payment of such Debt Securities at the
applicable redemption price, together with any interest accrued to said date) any interest on the
Debt Securities or portions of Debt Securities of any series so called for redemption shall cease
to accrue, and any original issue discount in the case of Original Issue Discount Securities shall
cease to accrue. On presentation and surrender of such Debt Securities at the Place or Places of
Payment in said notice specified, the said Debt Securities or the specified portions thereof shall
be paid and redeemed by the Issuers at the applicable redemption price, together with any interest
accrued thereon to the date fixed for redemption.
Any Debt Security that is to be redeemed only in part shall be surrendered at the Place of
Payment with, if the Issuers, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Issuers, the Registrar and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in writing, and the Issuers
shall execute, and the Trustee shall authenticate and deliver to the Holder of such Debt Security
without service charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Debt Security so
surrendered; except that if a Global Security is so surrendered, the Issuers shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global Security, without service
charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered. In the case of a Debt Security providing
appropriate space for such notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a notation on such Debt
Security of the payment of the redeemed portion thereof.
Section 3.04 Mandatory and Optional Sinking Funds. The minimum amount of any sinking
fund payment provided for by the terms of Debt Securities of any series, resolution of the Board of
Directors or a supplemental Indenture is herein referred to as a mandatory sinking fund payment,
and any payment in excess of such minimum amount provided for by the terms of Debt Securities of
any series, resolution of the Board of Directors or a supplemental Indenture is herein referred to
as an optional sinking fund payment.
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In lieu of making all or any part of any mandatory sinking fund payment with respect to any
Debt Securities of a series in cash, the Issuers may at their option (a) deliver to the Trustee
Debt Securities of that series theretofore purchased or otherwise acquired by the Issuers or (b)
receive credit for the principal amount of Debt Securities of that series which have been redeemed
either at the election of the Issuers pursuant to the terms of such Debt Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of such Debt
Securities, resolution or supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Debt Securities, resolution or supplemental
Indenture for redemption through operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
Section 3.05 Redemption of Debt Securities for Sinking Fund. Not less than 60 days
prior to each sinking fund payment date for any series of Debt Securities, the Issuers will deliver
to the Trustee an Officers Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, any resolution or supplemental
Indenture, the portion thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Debt Securities of that
series pursuant to this Section 3.05 (which Debt Securities, if not previously redeemed, will
accompany such certificate) and whether the Issuers intend to exercise its right to make any
permitted optional sinking fund payment with respect to such series. Such certificate shall also
state that no Event of Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Issuers shall be obligated to make the
cash payment or payments therein referred to, if any, by 11 a.m., New York City time, on the next
succeeding sinking fund payment date. Failure of the Issuers to deliver such certificate (or to
deliver the Debt Securities specified in this paragraph) shall not constitute a Default, but such
failure shall require that the sinking fund payment due on the next succeeding sinking fund payment
date for that series shall be paid entirely in cash and shall be sufficient to redeem the principal
amount of such Debt Securities subject to a mandatory sinking fund payment without the option to
deliver or credit Debt Securities as provided in this Section 3.05 and without the right to make
any optional sinking fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused
balance of any preceding sinking fund payments made in cash which shall equal or exceed $100,000
(or a lesser sum if the Issuers shall so request) with respect to the Debt Securities of any
particular series shall be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment date, on the sinking
fund payment date following the date of such payment) to the redemption of such Debt Securities at
the redemption price specified in such Debt Securities, resolution or supplemental Indenture for
operation of the sinking fund together with any accrued interest to the date fixed for redemption.
Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Debt
Securities shall be added to the next cash sinking fund payment received by the Trustee for such
series and, together with such payment, shall be applied in accordance with the provisions of this
Section 3.05. Any and all sinking fund moneys with respect to the Debt Securities of any
particular series held by the Trustee on the last sinking fund payment date with respect to Debt
Securities of such series and not held for the payment or redemption of particular Debt Securities
shall be applied by the Trustee, together with other
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moneys, if necessary, to be deposited sufficient for the purpose, to the payment of the
principal of the Debt Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such sinking fund payment
date in the manner specified in the last paragraph of Section 3.02 and the Issuers shall cause
notice of the redemption thereof to be given in the manner provided in Section 3.02 except that the
notice of redemption shall also state that the Debt Securities are being redeemed by operation of
the sinking fund. Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Section 3.03.
The Trustee shall not redeem any Debt Securities of a series with sinking fund moneys or mail
any notice of redemption of such Debt Securities by operation of the sinking fund for such series
during the continuance of a Default in payment of interest on such Debt Securities or of any Event
of Default (other than an Event of Default occurring as a consequence of this paragraph) with
respect to such Debt Securities, except that if the notice of redemption of any such Debt
Securities shall theretofore have been mailed in accordance with the provisions hereof, the Trustee
shall redeem such Debt Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any such Default or Event of
Default shall occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such Default or Event of Default, be held as security for the payment of such Debt
Securities; provided, however, that in case such Default or Event of Default shall have been cured
or waived as provided herein, such moneys shall thereafter be applied on the next sinking fund
payment date for such Debt Securities on which such moneys may be applied pursuant to the
provisions of this Section 3.05.
ARTICLE IV
PARTICULAR COVENANTS OF THE ISSUERS
Section 4.01 Payment of Principal of, and Premium, If Any, and Interest on, Debt
Securities. The Issuers, for the benefit of each series of Debt Securities, will duly and
punctually pay or cause to be paid the principal of, and premium, if any, and interest on, each of
the Debt Securities at the place, at the respective times and in the manner provided herein or in
the Debt Securities. Each installment of interest on any Debt Securities not in global form may at
the Issuers option be paid by mailing checks for such interest payable to the Person entitled
thereto pursuant to Section 2.07(a) to the address of such Person as it appears on the Debt
Security Register.
Principal of and premium and interest on Debt Securities of any series shall be considered
paid on the date due if, by 11 a.m., New York City time, on such date the Trustee or any paying
agent holds in accordance with this Indenture money sufficient to pay all principal, premium and
interest then due.
The Issuers shall pay interest on overdue principal or premium, if any, at the rate specified
therefor in the Debt Securities, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
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Section 4.02 Maintenance of Offices or Agencies for Registration of Transfer, Exchange and
Payment of Debt Securities. The Issuers will maintain in each Place of Payment for any series
of Debt Securities an office or agency where Debt Securities of such series may be presented or
surrendered for payment, and it shall also maintain (in or outside such Place of Payment) an office
or agency where Debt Securities of such series may be surrendered for transfer or exchange and
where notices and demands to or upon the Issuers in respect of the Debt Securities of such series
and this Indenture may be served. The Issuers 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 Issuers
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 office of the Trustee where its corporate trust business is principally administered in the
United States, and the Issuers hereby appoint the Trustee as their agent to receive all
presentations, surrenders, notices and demands.
The Issuers may also from time to time designate different or additional offices or agencies
to be maintained for such purposes (in or outside of such Place of Payment), and may from time to
time rescind any such designation; provided, however, that no such designation or rescission shall
in any manner relieve the Issuers of their obligations described in the preceding paragraph. The
Issuers will give prompt written notice to the Trustee of any such additional designation or
rescission of designation and any change in the location of any such different or additional office
or agency.
Section 4.03 Appointment to Fill a Vacancy in the Office of Trustee. The Issuers,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner
provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder with
respect to each series of Debt Securities.
Section 4.04 Duties of Paying Agents, etc.
(a) The Issuers shall cause each paying agent, if any, other than the Trustee, to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such agent for the payment of the
principal of, and premium, if any, or interest on, the Debt Securities of any series
(whether such sums have been paid to it by the Issuers or by any other obligor on the Debt
Securities of such series) in trust for the benefit of the Holders of the Debt Securities of
such series;
(ii) that it will give the Trustee notice of any failure by the Issuers (or by any
other obligor on the Debt Securities of such series) to make any payment of the principal
of, and premium, if any, or interest on, the Debt Securities of such series when the same
shall be due and payable; and
(iii) that it will at any time during the continuance of an Event of Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held by it as such
agent.
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(b) If either of the Issuers shall act as its own paying agent, it will, on or before each due
date of the principal of, and premium, if any, or interest on, the Debt Securities of any series,
set aside, segregate and hold in trust for the benefit of the Holders of the Debt Securities of
such series a sum sufficient to pay such principal, premium, if any, or interest so becoming due.
The Issuers will promptly notify the Trustee of any failure by either of the Issuers to take such
action or the failure by any other obligor on such Debt Securities to make any payment of the
principal of, and premium, if any, or interest on, such Debt Securities when the same shall be due
and payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding, either of the Issuers may,
at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Issuer or such paying agent.
(d) Whenever the Issuers shall have one or more paying agents with respect to any series of
Debt Securities, they will, prior to each due date of the principal of, and premium, if any, or
interest on, any Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such paying agent is the Trustee)
the Issuers will promptly notify the Trustee of its action or failure so to act.
(e) Anything in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums
in trust as provided in this Section 4.04 is subject to the provisions of Section 11.05.
Section 4.05 SEC Reports; Financial Statements.
(a) The Partnership shall, so long as any of the Debt Securities are Outstanding, file with
the Trustee, within 30 days after it files the same with the SEC, copies of the annual reports and
the information, documents and other reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) that the Partnership is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Partnership is not subject to the
requirements of such Section 13 or 15(d), the Partnership shall file with the Trustee, within 30
days after it would have been required to file the same with the SEC, financial statements,
including any notes thereto (and with respect to annual reports, an auditors report by a firm of
established national reputation), and a Managements Discussion and Analysis of Financial
Condition and Results of Operations, both comparable to that which the Partnership would have been
required to include in such annual reports, information, documents or other reports if the
Partnership had been subject to the requirements of such Section 13 or 15 (d). The Issuers shall
also comply with the provisions of TIA Section 314 (a).
(b) The Partnership shall provide the Trustee with a sufficient number of copies of all
reports and other documents and information that the Trustee may be required to deliver to Holders
under this Section.
(c) The Partnership shall, so long as any of the Notes are Outstanding, deliver to the
Trustee, within 30 days of any Officer of the Partnership becoming aware of the occurrence of
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any Event of Default, an Officers Certificate specifying such Event of Default and what
action the Partnership is taking or proposes to take with respect thereto.
Section 4.06 Compliance Certificate.
(a) Each of the Issuers and any Subsidiary Guarantor shall, so long as any of the Debt
Securities are Outstanding, deliver to the Trustee, within 120 days after the end of each fiscal
year of the Partnership, an Officers Certificate stating that a review of the activities of the
Partnership and its Subsidiaries during the preceding fiscal year has been made under the
supervision of the Officers signing the certificate with a view to determining whether each of the
Issuers and any Subsidiary Guarantor has kept, observed, performed and fulfilled its obligations
under this Indenture, and further stating, as to each such Officer signing such certificate, that
to the best of his knowledge each of the Issuers and any Subsidiary Guarantor has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions hereof, without
regard to any grace period or requirement of notice required by this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of Default of which
such Officer may have knowledge and what action the Issuers or any Subsidiary Guarantor is taking
or proposes to take with respect thereto).
(b) The Partnership shall, so long as any of the Debt Securities are Outstanding, deliver to
the Trustee within 30 days after the occurrence of any Default or Event of Default under this
Indenture, an Officers Certificate specifying such Default or Event of Default, the status thereof
and what action the Partnership is taking or proposes to take with respect thereto.
Section 4.07 Further Instruments and Acts. The Partnership will, upon request of the
Trustee, execute and deliver such further instruments and do such further acts as may reasonably be
necessary or proper to carry out more effectually the purposes of this Indenture.
Section 4.08 Existence. Except as permitted by Article X hereof, the Partnership
shall do or cause to be done all things necessary to preserve and keep in full force and effect its
existence and all rights (charter and statutory) and franchises of the Partnership, provided that
the Partnership shall not be required to preserve any such right or franchise, if its Board of
Directors shall determine that the preservation thereof is no longer desirable in the conduct of
the business of the Partnership.
Section 4.09 Maintenance of Properties. The Partnership shall cause all properties
owned by the Partnership or any of its Subsidiaries or used or held for use in the conduct of its
business or the business of any such Subsidiary to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all necessary equipment and
will cause to be made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Partnership may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all times; provided that
nothing in this Section shall prevent the Partnership from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment of the
Partnership, desirable in the conduct of its business or the business of any such Subsidiary and
not disadvantageous in any material respect to the Holders.
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Section 4.10 Payment of Taxes and Other Claims. The Partnership shall pay or
discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon the Partnership or any of its
Subsidiaries or upon the income, profits or property of the Partnership or any of its Subsidiaries,
and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might by law become
a Lien upon the property of the Partnership or any of its Subsidiaries; provided that the
Partnership shall not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
Section 4.11 Waiver of Certain Covenants. The Issuers and the Subsidiary Guarantors
may, with respect to the Debt Securities of any series, omit in any particular instance to comply
with any covenant set forth in this Article IV (except Sections 4.01 through 4.08) or made
applicable to such Debt Securities pursuant to Section 2.03, if, before or after the time for such
compliance, the Holders of at least a majority in principal amount of the Outstanding Debt
Securities of each series affected, waive such compliance in such instance with such covenant, but
no such waiver shall extend to or affect such covenant except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Issuers and the Subsidiary
Guarantors and the duties of the Trustee in respect of any such covenant shall remain in full force
and effect.
ARTICLE V
HOLDERS LISTS AND REPORTS BY THE TRUSTEE
Section 5.01 Issuers to Furnish Trustee Information as to Names and Addresses of Holders;
Preservation of Information. The Issuers covenant and agree that they will furnish or cause to
be furnished to the Trustee with respect to the Debt Securities of each series:
(a) not more than 10 days after each record date with respect to the payment of interest, if
any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the
Holders as of such record date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Issuers of any such request, a list of similar form and contents as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such lists shall not be
required to be furnished.
The Trustee shall preserve, in as current a form as is reasonably practicable, all information
as to the names and addresses of the Holders (i) contained in the most recent list furnished to it
as provided in this Section 5.01 or (ii) received by it in the capacity of paying agent or
Registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it as provided in this Section 5.01 upon receipt
of a new list so furnished.
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Section 5.02 Communications to Holders. Holders may communicate pursuant to Section
312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Debt
Securities. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the TIA.
Section 5.03 Reports by Trustee. Within 60 days after each January 31, beginning with
the first January 31 following the date of this Indenture, and in any event on or before April 1 in
each year, the Trustee shall mail to Holders a brief report dated as of such January 31 that
complies with TIA Section 313 (a); provided, however, that if no event described in TIA Section 313
(a) has occurred within the twelve months preceding the reporting date, no report need be
transmitted. The Trustee also shall comply with TIA Section 313 (b).
Reports pursuant to this Section 5.03 shall be transmitted by mail:
(a) to all Holders, as the names and addresses of such Holders appear in the Debt Security
Register; and
(b) except in the cases of reports under Section 313(b)(2) of the TIA, to each Holder of a
Debt Security of any series whose name and address appear in the information preserved at the time
by the Trustee in accordance with Section 5.01.
A copy of each report at the time of its mailing to Holders shall be filed with the Securities
and Exchange Commission and each stock exchange (if any) on which the Debt Securities of any series
are listed. The Issuers agree to notify promptly the Trustee whenever the Debt Securities of any
series become listed on any stock exchange and of any delisting thereof.
Section 5.04 Record Dates for Action by Holders. If the Issuers shall solicit from
the Holders of Debt Securities of any series any action (including the making of any demand or
request, the giving of any direction, notice, consent or waiver or the taking of any other action),
the Issuers may, at their option, by resolution of their respective Boards of Directors, fix in
advance a record date for the determination of Holders of Debt Securities entitled to take such
action, but the Issuers shall have no obligation to do so. Any such record date shall be fixed at
the Issuers discretion. If such a record date is fixed, such action may be sought or given before
or after the record date, but only the Holders of Debt Securities of record at the close of
business on such record date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of such series
Outstanding have authorized or agreed or consented to such action, and for that purpose the Debt
Securities of such series Outstanding shall be computed as of such record date.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01 Events of Default. If any one or more of the following shall have
occurred and be continuing with respect to Debt Securities of any series (each of the following, an
Event of Default):
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(a) default in the payment of any installment of interest upon any Debt Securities of that
series as and when the same shall become due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of the principal of or premium, if any, on any Debt Securities of
that series as and when the same shall become due and payable, whether at Stated Maturity, upon
redemption, by declaration, upon required repurchase or otherwise; or
(c) default in the payment of any sinking fund payment with respect to any Debt Securities of
that series as and when the same shall become due and payable; or
(d) failure on the part of the Issuers, or if any series of Debt Securities Outstanding under
this Indenture is entitled to the benefits of the Guarantee, any of the Subsidiary Guarantors, duly
to observe or perform any other of the covenants or agreements on the part of the Issuers, or if
applicable, any of the Subsidiary Guarantors, in the Debt Securities of that series, in any
resolution of the Board of Directors authorizing the issuance of that series of Debt Securities, in
this Indenture with respect to such series or in any supplemental Indenture with respect to such
series (other than a covenant a default in the performance of which is elsewhere in this Section
specifically dealt with), continuing for a period of 60 days after the date on which written notice
specifying such failure and requiring the Issuers, or if applicable, the Subsidiary Guarantors, to
remedy the same shall have been given to the Issuers, or if applicable, the Subsidiary Guarantors,
by the Trustee or to the Issuers, or if applicable, the Subsidiary Guarantors, and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Debt Securities of that series at
the time Outstanding; or
(e) either of the Issuers, or if any series of Debt Securities Outstanding under this
Indenture is entitled to the benefits of the Guarantee, any of the Subsidiary Guarantors, pursuant
to or within the meaning of any Bankruptcy Law,
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or substantially all
of its property; or
(iv) makes a general assignment for the benefit of its creditors;
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against either of the Issuers, or if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the
Subsidiary Guarantors, as debtor in an involuntary case,
(ii) appoints a Custodian of either of the Issuers, or if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of the Guarantee,
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any of the Subsidiary Guarantors, or a Custodian for all or substantially all of the
property of either of the Issuers, or if applicable, any of the Subsidiary Guarantors, or
(iii) orders the liquidation of either of the Issuers, or if any series of Debt
Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee,
any of the Subsidiary Guarantors,
and the order or decree remains unstayed and in effect for 60 days;
(g) if any series of Debt Securities Outstanding under this Indenture is entitled to the
benefits of the Guarantee, the Guarantee of any of the Subsidiary Guarantors ceases to be in full
force and effect with respect to Debt Securities of that series (except as otherwise provided in
this Indenture) or is declared null and void in a judicial proceeding or any of the Subsidiary
Guarantors denies or disaffirms its obligations under this Indenture or such Guarantee; or
(h) any other Event of Default provided with respect to Debt Securities of that series;
then and in each and every case that an Event of Default described in clause (a), (b), (c), (d),
(g), or (h) with respect to Debt Securities of that series at the time Outstanding occurs and is
continuing, unless the principal of, premium, if any, and accrued and unpaid interest on all the
Debt Securities of that series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Debt Securities of that series
then Outstanding hereunder, by notice in writing to the Issuers (and to the Trustee if given by
Holders), may declare the principal of (or, if the Debt Securities of that series are Original
Issue Discount Debt Securities, such portion of the principal amount as may be specified in the
terms of that series), premium, if any, and interest on all the Debt Securities of that series to
be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Debt Securities of that series
contained to the contrary notwithstanding. If an Event of Default described in clause (e) or (f)
occurs with respect to either of the Issuers, then and in each and every such case, unless the
principal of and accrued and unpaid interest on all the Debt Securities shall have become due and
payable, the principal of (or, if the Debt Securities of that series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in the terms thereof),
premium, if any, and interest on all the Debt Securities then Outstanding hereunder shall ipso
facto become and be immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders, anything in this Indenture or in the Debt Securities contained to the
contrary notwithstanding.
The Holders of a majority in aggregate principal amount of the Debt Securities of a particular
series by written notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction
already rendered and if all existing Events of Default with respect to that series have been cured
or waived except nonpayment of principal, premium, if any, or interest that has become due solely
because of acceleration. Upon any such rescission, the parties hereto shall be restored
respectively to their several positions and rights hereunder, and all rights, remedies and powers
of the parties hereto shall continue as though no such proceeding had been taken.
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Section 6.02 Collection of Debt by Trustee, etc. If an Event of Default occurs and is
continuing, the Trustee, in its own name and as trustee of an express trust, shall be entitled and
empowered to institute any action or proceedings at law or in equity for the collection of the sums
so due and unpaid or enforce the performance of any provision of the Debt Securities of the
affected series or this Indenture, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against any of the Subsidiary
Guarantors or the Issuers or any other obligor upon the Debt Securities of such series (and collect
in the manner provided by law out of the property of any of the Subsidiary Guarantors or the
Issuers or any other obligor upon the Debt Securities of such series wherever situated the moneys
adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for the reorganization of any
of the Subsidiary Guarantors or the Issuers or any other obligor upon the Debt Securities of any
series under any Bankruptcy Law, or in case a Custodian shall have been appointed for its property,
or in case of any other similar judicial proceedings relative to any of the Subsidiary Guarantors
or the Issuers or any other obligor upon the Debt Securities of any series, its creditors or its
property, the Trustee, irrespective of whether the principal of Debt Securities of any series shall
then be due and payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02,
shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal, premium, if any, and interest (or, if
the Debt Securities of such series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and unpaid in respect of
the Debt Securities of such series, and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith) and of the Holders thereof allowed in any such judicial proceedings
relative to any of the Subsidiary Guarantors or the Issuers, or any other obligor upon the Debt
Securities of such series, its creditors or its property, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of such Holders and of the Trustee on their behalf, and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by each of such Holders to
make payments to the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a
result of its negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or under any of the Debt
Securities of any series, may be enforced by the Trustee without the possession of any such Debt
Securities, or the production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment (except for any amounts payable to the Trustee
pursuant to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt
Securities in respect of which such action was taken.
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In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Section 6.03 Application of Moneys Collected by Trustee. Any moneys or other property
collected by the Trustee pursuant to Section 6.02 with respect to Debt Securities of any series
shall be applied in the order following, at the date or dates fixed by the Trustee for the
distribution of such moneys or other property, upon presentation of the several Debt Securities of
such series in respect of which moneys or other property have been collected, and the notation
thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant to Section 7.06;
SECOND: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall not have become due, to the payment of interest on the Debt
Securities of such series in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate or Yield to Maturity (in the case of Original Issue Discount
Debt Securities) borne by the Debt Securities of such series, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall have become due, by declaration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Debt Securities of such series for principal and
premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to
the extent that such interest has been collected by the Trustee) upon overdue installments of
interest at the rate or Yield to Maturity (in the case of Original Issue Discount Debt Securities)
borne by the Debt Securities of such series; and, in case such moneys shall be insufficient to pay
in full the whole amount so due and unpaid upon the Debt Securities of such series, then to the
payment of such principal and premium, if any, and interest, without preference or priority of
principal and premium, if any, over interest, or of interest over principal and premium, if any, or
of any installment of interest over any other installment of interest, or of any Debt Security of
such series over any Debt Security of such series, ratably to the aggregate of such principal and
premium, if any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Subsidiary Guarantors or the Issuers, as
applicable, or to whomsoever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.03. At least 15 days before such record date, the Issuers shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and amount to be paid.
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Section 6.04 Limitation on Suits by Holders. No Holder of any Debt Security of any
series shall have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or otherwise, upon or under
or with respect to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the Trustee written
notice of an Event of Default with respect to Debt Securities of that same series and of the
continuance thereof and unless the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debt Securities of that series shall have made written request upon the Trustee to
institute such action or proceedings in respect of such Event of Default in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity or security as it may
require against the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of indemnity or security
shall have failed to institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section 6.06; it being
understood and intended, and being expressly covenanted by the Holder of every Debt Security with
every other Holder and the Trustee, that no one or more Holders shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any Holders, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all such Holders. For the protection and
enforcement of the provisions of this Section 6.04, each and every Holder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision in this Indenture, however, the right of any Holder of any
Debt Security to receive payment of the principal of, and premium, if any, and (subject to Section
2.12) interest on, such Debt Security, on or after the respective due dates expressed in such Debt
Security, and to institute suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of
Default. All powers and remedies given by this Article VI to the Trustee or to the Holders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and agreements contained in
this Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or
power accruing upon any Default occurring and continuing as aforesaid, shall impair any such right
or power, or shall be construed to be a waiver of any such Default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy given by this Article VI or by
law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Holders.
Section 6.06 Rights of Holders of Majority in Principal Amount of Debt Securities to
Direct Trustee and to Waive Default. The Holders of not less than a majority in aggregate
principal amount of the Debt Securities of any series at the time Outstanding shall have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or of exercising any right, trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that such direction shall not be otherwise
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than in accordance with law and the provisions of this Indenture, and that subject to the
provisions of Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel shall determine that the action so directed may
not lawfully be taken or is inconsistent with any provision of this Indenture, or if the Trustee
shall by a responsible officer or officers determine that the action so directed would involve it
in personal liability or would be unduly prejudicial to Holders of Debt Securities of such series
not taking part in such direction; and provided, further, however, that nothing in this Indenture
contained shall impair the right of the Trustee to take any action deemed proper by the Trustee and
which is not inconsistent with such direction by such Holders. The Holders of not less than a
majority in aggregate principal amount of the Debt Securities of any series at the time Outstanding
may on behalf of the Holders of all the Debt Securities of that series waive any past Default or
Event of Default and its consequences for that series, except a Default or Event of Default in the
payment of the principal of, and premium, if any, or interest on, any of the Debt Securities and a
Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected thereby. In case of any such waiver, such Default
shall cease to exist, any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture, and the Subsidiary Guarantors, the Issuers, the Trustee and the
Holders of the Debt Securities of that series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
Section 6.07 Trustee to Give Notice of Events of Defaults Known to It, but May Withhold
Such Notice in Certain Circumstances. The Trustee shall, within 90 days after the occurrence
of an Event of Default, or if later, within 30 days after the Trustee obtains actual knowledge of
the Event of Default, with respect to a series of Debt Securities give to the Holders thereof, in
the manner provided in Section 13.03, notice of all Events of Default with respect to such series
known to the Trustee, unless such Events of Default shall have been cured or waived before the
giving of such notice; provided, that, except in the case of an Event of Default in the payment of
the principal of, or premium, if any, or interest on, any of the Debt Securities of such series or
in the making of any sinking fund payment with respect to the Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the board of directors, the
executive committee or a committee of directors or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the Holders thereof.
Section 6.08 Requirement of an Undertaking to Pay Costs in Certain Suits under the
Indenture or Against the Trustee. All parties to this Indenture agree, and each Holder of any
Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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 or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit in the manner and to
the extent provided in the TIA, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 6.08 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate more than 25 percent
in principal amount of the Outstanding Debt Securities of that series or to any suit instituted by
any
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Holder for the enforcement of the payment of the principal of, or premium, if any, or interest
on, any Debt Security on or after the due date for such payment expressed in such Debt Security.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, its own bad faith or its own willful
misconduct, except that:
(a) this paragraph shall not be construed to limit the effect of the first paragraph of this
Section 7.01;
(b) prior to the occurrence of an Event of Default with respect to the Debt Securities of a
series and after the curing or waiving of all Events of Default with respect to such series which
may have occurred:
(i) the duties and obligations of the Trustee with respect to Debt Securities of any
series shall be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and obligations with
respect to such series as are specifically set forth in this Indenture, and no implied
covenants or obligations with respect to such series shall be read into this Indenture
against the Trustee;
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee and 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; but the Trustee shall examine the evidence furnished
to it pursuant to Sections 4.05 and 4.06 to determine whether or not such evidence conforms
to the requirement of this Indenture;
(iii) the Trustee shall not be liable for an 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; and
(iv) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it with respect to Debt Securities of any series in good faith in accordance
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with the direction of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of that 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 Debt
Securities of such series.
None of the provisions of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any personal financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.
Section 7.02 Certain Rights of Trustee. Except as otherwise provided in Section 7.01:
(a) the Trustee may rely 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 or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of either of the Issuers mentioned herein shall be
sufficiently; evidenced by an Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors of an Issuer may be
evidenced to the Trustee by a copy thereof certified by its Secretary or an Assistant Secretary;
(c) the Trustee may consult with counsel, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders of Debt Securities of
any series pursuant to the provisions of this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, 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, approval or other paper or document, unless requested
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in writing to do so by the Holders of a majority in aggregate principal amount of the then
Outstanding Debt Securities of a series affected by such matter; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding, and the reasonable expense of every such investigation shall be paid by
the Issuers or, if paid by the Trustee, shall be repaid by the Issuers upon demand;
(g) 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 by it
with due care hereunder; and
(h) if any property other than cash shall at any time be subject to a Lien in favor of the
Holders, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of
competent jurisdiction or by the supplemental instrument subjecting such property to such Lien,
shall be entitled to make advances for the purpose of preserving such property or of discharging
tax Liens or other prior Liens or encumbrances thereon.
Section 7.03 Trustee Not Liable for Recitals in Indenture or in Debt Securities. The
recitals contained herein, in the Debt Securities (except the Trustees certificate of
authentication) shall be taken as the statements of the Issuers, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities of any series, except that the
Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate
the Debt Securities and perform its obligations hereunder, and that the statements made by it or to
be made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Issuers
are true and accurate. The Trustee shall not be accountable for the use or application by the
Issuers of any of the Debt Securities or of the proceeds thereof.
Section 7.04 Trustee, Paying Agent or Registrar May Own Debt Securities. The Trustee
or any paying agent or Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debt Securities and subject to the provisions of the TIA relating to conflicts of
interest and preferential claims may otherwise deal with the Issuers with the same rights it would
have if it were not Trustee, paying agent or Registrar.
Section 7.05 Moneys Received by Trustee to Be Held in Trust. Subject to the
provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received, but 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 moneys received by it hereunder. So long as no Event of Default
shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from
time to time to the Issuers upon an Issuer Order.
Section 7.06 Compensation and Reimbursement. The Issuers covenant and agree to pay in
Dollars to the Trustee from time to time, and the Trustee shall be entitled to, reasonable
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compensation for all services rendered by it hereunder (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust), and, except as
otherwise expressly provided herein, the Issuers will pay or reimburse in Dollars the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents, attorneys and counsel and of all Persons not
regularly in its employ), including without limitation, Section 6.02, except any such expense,
disbursement or advances as may arise from its negligence, willful misconduct or bad faith. The
Issuers also covenant to indemnify in Dollars the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct or bad faith on the part
of the Trustee, arising out of or in connection with the acceptance or administration of this trust
or trusts hereunder, including the reasonable costs and expenses of defending itself against any
claim of liability in connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the Issuers under this Section 7.06 to compensate and indemnify the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional Debt hereunder and shall survive the satisfaction and discharge of this
Indenture. The Issuers and the Holders agree that such additional Debt shall be secured by a Lien
prior to that of the Debt Securities upon all property and funds held or collected by the Trustee,
as such, except funds held in trust for the payment of principal of, and premium, if any, or
interest on, particular Debt Securities.
When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(e) or (f) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
Section 7.07 Right of Trustee to Rely on an Officers Certificate Where No Other Evidence
Specifically Prescribed. Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 7.08 Separate Trustee; Replacement of Trustee. The Issuers may, but need not,
appoint a separate Trustee for any one or more series of Debt Securities. The Trustee may resign
with respect to one or more or all series of Debt Securities at any time by giving notice to the
Issuers. The Holders of a majority in principal amount of the Debt Securities of a particular
series may remove the Trustee for such series and only such series by so notifying the Trustee and
may appoint a successor Trustee. The Issuers shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
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(c) a Custodian takes charge of the Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal
amount of the Debt Securities of a particular series and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly
appoint a successor Trustee. No resignation or removal of the Trustee and no appointment of a
successor Trustee shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of Debt Securities of each applicable series. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in
Section 7.06.
If a successor Trustee does not take office within 60 days after the retiring Trustee gives
notice of resignation or is removed, the retiring Trustee or the Holders of 25% in principal amount
of the Debt Securities of any applicable series may petition any court of competent jurisdiction
for the appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt Securities of any
applicable series may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers
obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor Trustee with respect to
the Debt Securities of one or more series, the Issuers, any retiring Trustee and each successor or
separate Trustee with respect to the Debt Securities of any applicable series shall execute and
deliver an Indenture supplemental hereto (i) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Debt Securities of any series as to which any such retiring Trustee is
not retiring shall continue to be vested in such retiring Trustee and (ii) that shall add to or
change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental Indenture shall constitute such Trustees co-trustees of the
same trust and that each such separate, retiring or successor Trustee shall be Trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other
such Trustee.
Section 7.09 Successor Trustee by Merger. If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all its corporate trust business or assets to,
another
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corporation or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Trustee.
In case at the time such successor or successors to the Trustee by merger, conversion,
consolidation or transfer shall succeed to the trusts created by this Indenture any of the Debt
Securities shall have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities shall not have
been authenticated, any successor to the Trustee may authenticate such Debt Securities either in
the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all
such cases such certificates shall have the full force which it is anywhere in the Debt Securities
or in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual report of
condition. No obligor upon the Debt Securities of a particular series or Person directly or
indirectly controlling, controlled by or under common control with such obligor shall serve as
Trustee for the Debt Securities of such series. The Trustee shall comply with Section 310(b) of
the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of
the TIA this Indenture or any indenture or indentures under which other securities or certificates
of interest or participation in other securities of the Issuers are outstanding if the requirements
for such exclusion set forth in Section 310(b)(1) of the TIA are met.
Section 7.11 Preferential Collection of Claims Against Issuers. The Trustee shall
comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b)
of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the
TIA to the extent indicated therein.
Section 7.12 Compliance with Tax Laws. The Trustee hereby agrees to comply with all
U.S. Federal income tax information reporting and withholding requirements applicable to it with
respect to payments of premium (if any) and interest on the Debt Securities, whether acting as
Trustee, Registrar, paying agent or otherwise with respect to the Debt Securities.
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01 Evidence of Action by Holders. Whenever in this Indenture it is provided
that the Holders of a specified percentage in aggregate principal amount of the Debt Securities of
any or all series may take action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the Holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders
in Person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in accordance with the provisions of
Section 5.02, (c) by a combination of such instrument or instruments and any such record of such a
meeting of Holders or (d) in the case of Debt Securities evidenced by a Global
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Security, by any electronic transmission or other message, whether or not in written format,
that complies with the Depositarys applicable procedures.
Section 8.02 Proof of Execution of Instruments and of Holding of Debt Securities.
Subject to the provisions of Sections 7.01, 7.02 and 13.09, proof of the execution of any
instrument by a Holder or his agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Debt Securities of any series shall be proved by the
Debt Security Register or by a certificate of the Registrar for such series. The Trustee may
require such additional proof of any matter referred to in this Section 8.02 as it shall deem
necessary.
Section 8.03 Who May Be Deemed Owner of Debt Securities. Prior to due presentment for
registration of transfer of any Debt Security, the Issuers, the Subsidiary Guarantors, the Trustee,
any paying agent and any Registrar may deem and treat the Person in whose name any Debt Security
shall be registered upon the books of the Issuers as the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on account of the principal of
and premium, if any, and (subject to Section 2.12) interest on such Debt Security and for all other
purposes, and none of the Issuers, the Subsidiary Guarantors or the Trustee nor any paying agent
nor any Registrar shall be affected by any notice to the contrary; and all such payments so made to
any such Holder for the time being, or upon his order, shall be valid and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such
Debt Security.
None of the Issuers, the Subsidiary Guarantors, the Trustee, any paying agent or any Registrar
will have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.
Section 8.04 Instruments Executed by Holders Bind Future Holders. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the Holders of the percentage in aggregate principal amount of the Debt Securities of any
series specified in this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be included in the Debt
Securities the Holders of which have consented to such action may, by filing written notice with
the Trustee at its corporate trust office and upon proof of holding as provided in Section 8.02,
revoke such action so far as concerns such Debt Security. Except as aforesaid any such action
taken by the Holder of any Debt Security shall be conclusive and binding upon such Holder and upon
all future Holders and owners of such Debt Security and of any Debt Security issued upon transfer
thereof or in exchange or substitution therefor, irrespective of whether or not any notation in
regard thereto is made upon such Debt Security or such other Debt Securities. Any action taken by
the Holders of the percentage in aggregate principal amount of the Debt Securities of any series
specified in this Indenture in connection with such action shall be conclusively binding upon the
Issuers, the Subsidiary Guarantors, the Trustee and the Holders of all the Debt Securities of such
series.
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The Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of Debt Securities entitled to give their consent or take any other action
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were Holders of Debt
Securities at such record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to take any such action,
whether or not such Persons continue to be Holders of Debt Securities after such record date. No
such consent shall be valid or effective for more than 120 days after such record date unless the
consent of the Holders of the percentage in aggregate principal amount of the Debt Securities of
such series specified in this Indenture shall have been received within such 120-day period.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Purposes for Which Supplemental Indenture May Be Entered into Without Consent
of Holders. The Issuers and any Subsidiary Guarantors, when authorized by resolutions of each
Issuers Board of Directors, and the Trustee may from time to time and at any time, without the
consent of Holders, enter into an Indenture or Indentures supplemental hereto (which shall conform
to the provisions of the TIA as in force at the date of the execution thereof) for one or more of
the following purposes:
(a) to evidence the succession pursuant to Article X of another Person to either of the
Issuers, or successive successions, and the assumption by the Successor Company (as defined in
Section 10.01) of the covenants, agreements and obligations of its predecessor Issuer in this
Indenture and in the Debt Securities;
(b) to surrender any right or power herein conferred upon the Issuers or the Subsidiary
Guarantors, to add to the covenants of the Issuers or the Subsidiary Guarantors such further
covenants, restrictions, conditions or provisions for the protection of the Holders of all or any
series of Debt Securities (and if such covenants are to be for the benefit of less than all series
of Debt Securities, stating that such covenants are expressly being included solely for the benefit
of such series) as the Board of Directors shall consider to be for the protection of the Holders of
such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a Default
in any of such additional covenants, restrictions, conditions or provisions a Default or an Event
of Default permitting the enforcement of all or any of the several remedies provided in this
Indenture; provided, that in respect of any such additional covenant, restriction, condition or
provision such supplemental Indenture may provide for a particular period of grace after Default
(which period may be shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such Default or may limit the remedies available to the
Trustee upon such Default or may limit the right of the Holders of a majority in aggregate
principal amount of any or all series of Debt Securities to waive such Default;
(c) to cure any ambiguity or omission or to correct or supplement any provision contained
herein, in any supplemental Indenture or in any Debt Securities of any series that may be defective
or inconsistent with any other provision contained herein, in any supplemental Indenture or in the
Debt Securities of such series; to convey, transfer, assign, mortgage or pledge
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any property to or with the Trustee, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not adversely affect the interests of any Holders
of Debt Securities of any series;
(d) to permit the qualification of this Indenture or any Indenture supplemental hereto under
the TIA as then in effect, except that nothing herein contained shall permit or authorize the
inclusion in any Indenture supplemental hereto of the provisions referred to in Section 316(a)(2)
of the TIA;
(e) to permit or facilitate the issuance of Debt Securities of any series in uncertificated
form;
(f) to reflect the release of any Subsidiary Guarantor in accordance with Article XIV
(g) to add Subsidiary Guarantors with respect to any or all of the Debt Securities or to
secure any or all of the Debt Securities or the Guarantee;
(h) to make any change that does not adversely affect the rights hereunder of any Holder;
(i) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Debt Securities; provided, however, that any such addition, change or elimination
not otherwise permitted under this Section 9.01 shall neither apply to any Debt Security of any
series created prior to the execution of such supplemental Indenture and entitled to the benefit of
such provision nor modify the rights of the Holder of any such Debt Security with respect to such
provision or shall become effective only when there is no such Debt Security Outstanding;
(j) to evidence and provide for the acceptance of appointment hereunder by a successor or
separate Trustee with respect to the Debt Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; and
(k) to establish the form or terms of Debt Securities of any series as permitted by Sections
2.01 and 2.03.
The Trustee is hereby authorized to join with the Issuers and the Subsidiary Guarantors in the
execution of any such supplemental Indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into
any such supplemental Indenture which affects the Trustees own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this Section 9.01 may be executed
by the Issuers, the Subsidiary Guarantors and the Trustee without the consent of the Holders of any
of the Debt Securities at the time Outstanding, notwithstanding any of the provisions of Section
9.02.
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Section 9.02 Modification of Indenture with Consent of Holders of Debt Securities.
Without notice to any Holder but with the consent (evidenced as provided in Section 8.01) of the
Holders of not less than a majority in aggregate principal amount of the Outstanding Debt
Securities of each series affected by such supplemental Indenture (including consents obtained in
connection with a tender offer or exchange offer for any such series of Debt Securities), the
Issuers and the Subsidiary Guarantors, when authorized by resolutions of each Issuers Board of
Directors, and the Trustee may from time to time and at any time enter into an Indenture or
Indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the
date of execution thereof) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental Indenture or of
modifying in any manner the rights of the Holders of the Debt Securities of such series; provided,
that no such supplemental Indenture, without the consent of the Holders of each Debt Security so
affected, shall: reduce the percentage in principal amount of Debt Securities of any series whose
Holders must consent to an amendment; reduce the rate of or extend the time for payment of interest
on any Debt Security; reduce the principal of or extend the Stated Maturity of any Debt Security;
reduce any premium payable upon the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed in accordance with Article III; make any Debt Security
payable in currency other than the Dollar; impair the right of any Holder to receive payment of
premium, if any, principal of and interest on such Holders Debt Securities on or after the due
dates therefor or to institute suit for the enforcement of any payment on or with respect to such
Holders Debt Securities; release any security that may have been granted in respect of the Debt
Securities, other than in accordance with this Indenture; make any change in Section 6.06 or this
Section 9.02; or, except as provided in Section 11.02(b) or Section14.04, release the Subsidiary
Guarantors other than as provided in this Indenture or modify the Guarantee in any manner adverse
to the Holders.
A supplemental Indenture which changes or eliminates any covenant or other provision of this
Indenture which has been expressly included solely for the benefit of one or more particular series
of Debt Securities or which modifies the rights of the Holders of Debt Securities of such series
with respect to such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Issuers, accompanied by a copy of resolutions of the Board of
Directors of each Issuer authorizing the execution of any such supplemental Indenture, and upon the
filing with the Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall join
with the Issuers and the Subsidiary Guarantors in the execution of such supplemental Indenture
unless such supplemental Indenture affects the Trustees own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed supplemental Indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
After an amendment under this Section 9.02 requiring the consent of the Holders of any series
of Debt Securities becomes effective, the Issuers shall mail to Holders of that series of Debt
Securities of each series affected thereby a notice briefly describing such amendment. The
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failure to give such notice to any such Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.02 with respect to other Holders.
Section 9.03 Effect of Supplemental Indentures. Upon the execution of any
supplemental Indenture pursuant to the provisions of this Article IX, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective rights, limitations
of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuers, the
Subsidiary Guarantors and the Holders shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental Indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may receive an Officers
Certificate and an Opinion of Counsel as conclusive evidence that any such supplemental Indenture
complies with the provisions of this Article IX.
Section 9.04 Debt Securities May Bear Notation of Changes by Supplemental Indentures.
Debt Securities of any series authenticated and delivered after the execution of any supplemental
Indenture pursuant to the provisions of this Article IX 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. New Debt Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture contained in any such
supplemental Indenture may be prepared and executed by the Issuers, authenticated by the Trustee
and delivered in exchange for the Debt Securities of such series then Outstanding. Failure to make
the appropriate notation or to issue a new Debt Security of such series shall not affect the
validity of such amendment.
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01 Consolidations and Mergers of the Issuers. Neither of the Issuers may
consolidate or amalgamate with or merge with or into any Person, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all its assets to any Person, whether in a single
transaction or a series of related transactions, unless: (a) either (i) such Issuer shall be the
surviving Person in the case of a merger or (ii) the resulting, surviving or transferee Person if
other than such Issuer (the Successor Company), shall be a partnership, limited liability company
or corporation organized and existing under the laws of the United States, any State thereof or the
District of Columbia and the Successor Company shall expressly assume, by an Indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of such Issuer under this Indenture and the Debt Securities according to their tenor;
(b) immediately after giving effect to such transaction or series of transactions (and treating any
Debt which becomes an obligation of the Successor Company or any Subsidiary of such Issuer as a
result of such transaction as having been incurred by the Successor Company or such Subsidiary at
the time of such transaction or series of transactions), no Default or Event of Default would occur
or be continuing; (c) if such Issuer is not the continuing Person, then each Subsidiary Guarantor,
unless it has become the Successor Company, shall confirm that its Guarantee shall continue to
apply to the obligations under the Debt Securities and this
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Indenture; and (d) the Issuers shall have delivered to the Trustee an Officers Certificate
and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or
disposition and such supplemental Indenture (if any) comply with this Indenture.
Section 10.02 Rights and Duties of Successor Company. In case of any consolidation,
amalgamation or merger where such Issuer is not the continuing Person, or disposition of all or
substantially all of the assets of such Issuer in accordance with Section 10.01, the Successor
Company shall succeed to and be substituted for such Issuer with the same effect as if it had been
named herein as the respective party to this Indenture, and the predecessor entity shall be
released from all liabilities and obligations under this Indenture and the Debt Securities, except
that no such release will occur in the case of a lease of all or substantially all of such Issuers
assets. The Successor Company thereupon may cause to be signed, and may issue either in its own
name or in the name of such Issuer, any or all the Debt Securities issuable hereunder which
theretofore shall not have been signed by or on behalf of such Issuer and delivered to the
Trustee; and, upon the order of the Successor Company, instead of such Issuer, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate
and shall deliver any Debt Securities which previously shall have been signed and delivered by or
on behalf of such Issuer to the Trustee for authentication, and any Debt Securities which the
Successor Company thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debt Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all such Debt Securities had been issued at the date of
the execution hereof.
In case of any such consolidation, amalgamation, merger, sale or disposition such changes in
phraseology and form (but not in substance) may be made in the Debt Securities thereafter to be
issued as may be appropriate.
ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01 Applicability of Article. The provisions of this Article XI relating to
discharge or defeasance of Debt Securities shall be applicable to each series of Debt Securities
except as otherwise specified pursuant to Section 2.03 for Debt Securities of such series.
Section 11.02 Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time the Issuers shall have delivered to the Trustee for cancellation all Debt
Securities of any series theretofore authenticated and delivered (other than any Debt Securities of
such series which shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.09 and Debt Securities for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Issuers as provided in Section 11.05) or all Debt
Securities of such series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Issuers shall deposit
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with the Trustee as trust funds the entire amount in cash sufficient to pay at final maturity
or upon redemption all Debt Securities of such series not theretofore delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to become due on such
date of maturity or Redemption Date, as the case may be, and if in either case the Issuers shall
also pay or cause to be paid all other sums payable hereunder by the Issuers, then this Indenture
shall cease to be of further effect (except as to any surviving rights of registration of transfer
or exchange of such Debt Securities herein expressly provided for) with respect to the Debt
Securities of such series, and the Trustee, on demand of the Issuers accompanied by an Officers
Certificate and an Opinion of Counsel and at the cost and expense of the Issuers, shall execute
proper instruments acknowledging satisfaction of and discharging this Indenture with respect to the
Debt Securities of such series.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Issuers at any time may terminate, with
respect to Debt Securities of a particular series, all its obligations under the Debt Securities
of such series and this Indenture with respect to the Debt Securities of such series (legal
defeasance option) or the operation of (w) Sections 4.09 and 4.10, (x) any covenant made
applicable to such Debt Securities pursuant to Section 2.03, (y) Sections 6.01(d), (g) and (h) and
(z) as they relate to the Subsidiary Guarantors only, Sections 6.01(e) and (f) (covenant
defeasance option). If the Issuers exercise either their legal defeasance option or their
covenant defeasance option with respect to Debt Securities of a particular series that are entitled
to the benefit of the Guarantee, the Guarantee will terminate with respect to that series of Debt
Securities. The Issuers may exercise their legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Issuers exercise their legal defeasance option, payment of the Debt Securities of the
defeased series may not be accelerated because of an Event of Default. If the Issuers exercise
their covenant defeasance option, payment of the Debt Securities of the defeased series may not be
accelerated because of an Event of Default specified in Sections 6.01(d), (g) and (h) and, with
respect to the Subsidiary Guarantors only, Sections 6.01(e) and (f).
Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the
Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.07,
2.09, 4.02, 4.03, 4.04, the last sentence of 4.05(a), 4.06(a), 5.01, 7.06, 11.05, 11.06 and 11.07
shall survive until the Debt Securities of the defeased series have been paid in full. Thereafter,
the Issuers obligations in Sections 7.06, 11.05 and 11.06 shall survive.
Section 11.03 Conditions of Defeasance. The Issuers may exercise their legal
defeasance option or its covenant defeasance option with respect to Debt Securities of a particular
series only if:
(a) the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government
Obligations for the payment of principal of, and premium, if any, and interest on, the Debt
Securities of such series to final maturity or redemption, as the case may be;
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(b) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of
independent accountants expressing their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts as will be sufficient to pay
the principal, premium, if any, and interest when due on all the Debt Securities of such series to
final maturity or redemption, as the case may be;
(c) 91 days pass after the deposit is made and during the 91-day period no Default specified
in Section 6.01(e) or (f) with respect to the Issuers occurs which is continuing at the end of the
period;
(d) no Default has occurred and is continuing on the date of such deposit and after giving
effect thereto;
(e) the deposit does not constitute a default under any other agreement binding on the
Issuers;
(f) the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;
(g) in the event of the legal defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel stating that the Issuers have received from the Internal Revenue
Service a ruling, or since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;
(h) in the event of the covenant defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of Debt Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not occurred; and
(i) the Issuers deliver to the Trustee an Officers Certificate and an Opinion of Counsel,
each stating that all conditions precedent to the defeasance and discharge of the Debt Securities
of such series as contemplated by this Article XI have been complied with.
Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for
the redemption of Debt Securities of such series at a future date in accordance with Article III.
Section 11.04 Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article XI. It shall apply the
deposited money and the money from U.S. Government Obligations through any paying agent
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and in accordance with this Indenture to the payment of principal of, and premium, if any, and
interest on, the Debt Securities of the defeased series.
Section 11.05 Repayment to Issuers. The Trustee and any paying agent shall promptly
turn over to the Issuers upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any paying agent shall pay
to the Issuers upon request any money held by them for the payment of principal, premium or
interest that remains unclaimed for two years, and, thereafter, Holders entitled to such money must
look to the Issuers for payment as general creditors.
Section 11.06 Indemnity for U.S. Government Obligations. The Issuers shall pay and
shall indemnify the Trustee and the Holders against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government Obligations or the principal and interest received on
such U.S. Government Obligations.
Section 11.07 Reinstatement. If the Trustee or any paying agent is unable to apply
any money or U.S. Government Obligations in accordance with this Article XI by reason of any legal
proceeding or by reason of any order or judgment of any court or government authority enjoining,
restraining or otherwise prohibiting such application, the Issuers obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and reinstated as though
no deposit had occurred pursuant to this Article XI until such time as the Trustee or any paying
agent is permitted to apply all such money or U.S. Government Obligations in accordance with this
Article XI.
ARTICLE XII
[RESERVED]
This Article XII has been intentionally omitted.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Successors and Assigns of Issuers Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the
Issuers, the Subsidiary Guarantors or the Trustee shall bind their respective successors and
assigns, whether so expressed or not.
Section 13.02 Acts of Board, Committee or Officer of Successor Issuer Valid. Any act
or proceeding by any provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of either of the Issuers shall and may be done and performed with
like force and effect by the like board, committee or officer of any Successor Company.
Section 13.03 Required Notices or Demands. Any notice or communication by the
Issuers, the Subsidiary Guarantors or the Trustee to the others is duly given if in writing in the
English language and delivered in Person or mailed by registered or certified mail (return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery, to the others
address:
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If to the Issuers or any Subsidiary Guarantor:
DCP Midstream Partners, LP
1700 Pacific, Suite 2900
Dallas, Texas 75201
Attention: Chief Legal Officer
Telecopy No. (214) 750-1749
If to the Trustee:
[ ]
The Issuers, any Subsidiary Guarantor or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; on the first Business Day on or after being sent, if telecopied and the sender
receives confirmation of successful transmission; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice required or permitted to a Holder by the Issuers, any Subsidiary Guarantor or the
Trustee pursuant to the provisions of this Indenture shall be deemed to be properly mailed by being
deposited postage prepaid in a post office letter box in the United States addressed to such Holder
at the address of such Holder as shown on the Debt Security Register. Any report pursuant to
Section 313 of the TIA shall be transmitted in compliance with subsection (c) therein.
Notwithstanding the foregoing, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required pursuant to Section 2.03,
shall be sufficiently given if given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any other cause it shall be
impracticable to give notice by mail, then such notification as shall be given with the approval of
the Trustee shall constitute sufficient notice for every purpose hereunder.
In the event it shall be impracticable to give notice by publication, then such notification
as shall be given with the approval of the Trustee shall constitute sufficient notice for every
purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in it or any defect in any
notice by publication as to a Holder shall not affect the sufficiency of such notice with respect
to other Holders. If a notice or communication is mailed or published in the manner provided
above, it is conclusively presumed duly given.
Section 13.04 Indenture and Debt Securities to Be Construed in Accordance with the Laws of
the State of New York. THIS INDENTURE, EACH DEBT SECURITY AND THE
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GUARANTEE SHALL BE DEEMED TO BE NEW YORK CONTRACTS, AND FOR ALL PURPOSES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.
Section 13.05 Officers Certificate and Opinion of Counsel to Be Furnished upon
Application or Demand by the Issuers. Upon any application or demand by the Issuers to the
Trustee to take any action under any of the provisions of this Indenture, each of the Issuers shall
furnish to the Trustee an Officers Certificate stating that all conditions precedent provided for
in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which the furnishing of such
document is specifically required by any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this Indenture shall include (a)
a statement that the Person making such certificate or opinion has read such covenant or condition,
(b) 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, (c) a statement that, in
the opinion of such Person, 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 (d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 13.06 Payments Due on Legal Holidays. In any case where the date of maturity
of interest on or principal of and premium, if any, on the Debt Securities of a series or the date
fixed for redemption or repayment of any Debt Security or the making of any sinking fund payment
shall not be a Business Day at any Place of Payment for the Debt Securities of such series, then
payment of interest or principal and premium, if any, or the making of such sinking fund payment
need not be made on such date at such Place of Payment, 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 date of
maturity or the date fixed for redemption, and no interest shall accrue for the period after such
date. If a record date is not a Business Day, the record date shall not be affected.
Section 13.07 Provisions Required by TIA to Control. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another provision included in this
Indenture which is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the TIA, such required provision shall control.
Section 13.08 Computation of Interest on Debt Securities. Interest, if any, on the
Debt Securities shall be computed on the basis of a 360-day year of twelve 30-day months, except as
may otherwise be provided pursuant to Section 2.03.
Section 13.09 Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or a meeting of Holders. The Registrar and any paying agent may
make reasonable rules for their functions.
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Section 13.10 No Recourse Against Others. The General Partner and its directors,
officers, employees and members, as such, shall have no liability for any obligations of the
Subsidiary Guarantors or the Issuers under the Debt Securities, this Indenture or the Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or their creation. By
accepting a Debt Security, each Holder shall be deemed to have waived and released all such
liability. The waiver and release shall be part of the consideration for the issue of the Debt
Securities.
Section 13.11 Severability. In case any provision in this Indenture or the Debt
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 13.12 Effect of Headings. The article and section headings herein and in the
Table of Contents are for convenience only and shall not affect the construction hereof.
Section 13.13 Indenture May Be Executed in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
ARTICLE XIV
GUARANTEE
Section 14.01 Unconditional Guarantee.
(a) Notwithstanding any provision of this Article XIV to the contrary, the provisions of this
Article XIV shall be applicable only to, and inure solely to the benefit of, the Debt Securities of
any series designated, pursuant to Section 2.03, as entitled to the benefits of the Guarantee of
each of the Subsidiary Guarantors.
(b) For value received, each of the Subsidiary Guarantors hereby fully, unconditionally and
absolutely guarantees (the Guarantee) to the Holders and to the Trustee the due and punctual
payment of the principal of, and premium, if any, and interest on the Debt Securities and all other
amounts due and payable under this Indenture and the Debt Securities by the Issuers, 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 Debt Securities and this Indenture, subject to the limitations set forth in Section
14.03.
(c) Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever
reason, each of the Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. The Guarantee hereunder is intended to be a general, unsecured, senior obligation of
each of the Subsidiary Guarantors and will rank pari passu in right of payment with all Debt of
each Subsidiary Guarantor that is not, by its terms, expressly subordinated in right of payment to
the Guarantee. Each of the Subsidiary Guarantors hereby agrees that its obligations hereunder
shall be full, unconditional and absolute, irrespective of the validity, regularity or
enforceability of the Debt Securities, the Guarantee (including the Guarantee of any other
Subsidiary Guarantor) or this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Debt Securities with respect to any
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provisions hereof or thereof, the recovery of any judgment against either of the Issuers or
any other Subsidiary Guarantor, or any action to enforce the same or any other circumstances which
might otherwise constitute a legal or equitable discharge or defense of any of the Subsidiary
Guarantors. Each of the Subsidiary Guarantors hereby agrees that in the event of a default in
payment of the principal of, or premium, if any, or interest on the Debt Securities, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.04,
by the Holders, on the terms and conditions set forth in this Indenture, directly against such
Subsidiary Guarantor to enforce the Guarantee without first proceeding against either of the
Issuers or any other Subsidiary Guarantor.
(d) The obligations of each of the Subsidiary Guarantors under this Article XIV shall be as
aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited
by any occurrence or condition whatsoever, including, without limitation, (A) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of any of the Issuers or the Subsidiary Guarantors contained
in the Debt Securities or this Indenture, (B) any impairment, modification, release or limitation
of the liability of any of the Issuers or the Subsidiary Guarantors 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 any of the Issuers, the Subsidiary
Guarantors or the Trustee of any rights or remedies under the Debt Securities or this Indenture or
their delay in or failure to assert or exercise any such rights or remedies, (D) the assignment or
the purported assignment of any property as security for the Debt Securities, including all or any
part of the rights of any of the Issuers or the Subsidiary Guarantors under this Indenture, (E) the
extension of the time for payment by any of the Issuers or the Subsidiary Guarantors of any
payments or other sums or any part thereof owing or payable under any of the terms and provisions
of the Debt Securities or this Indenture or of the time for performance by any of the Issuers or
the Subsidiary Guarantors 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 any of the Issuers or the
Subsidiary Guarantors set forth in this Indenture, (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, any of the Issuers or the Subsidiary Guarantors or any of their respective assets, or
the disaffirmance of the Debt Securities, the Guarantee or this Indenture in any such proceeding,
(H) the release or discharge of any of the Issuers or the Subsidiary Guarantors 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 Debt Securities, the Guarantee or
this Indenture or (J) any other circumstances (other than payment in full or discharge of all
amounts guaranteed pursuant to the Guarantee) which might otherwise constitute a legal or equitable
discharge of a surety or guarantor.
(e) Each of the Subsidiary 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 any
of the Issuers or the Subsidiary Guarantors, and all demands whatsoever, (B)
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acknowledges that any agreement, instrument or document evidencing the Guarantee may be
transferred and that the benefit of its obligations hereunder shall extend to each holder of any
agreement, instrument or document evidencing the Guarantee without notice to it and (C) covenants
that the Guarantee will not be discharged except by complete performance of the Guarantee. Each of
the Subsidiary Guarantors further agrees that if at any time all or any part of any payment
theretofore applied by any Person to the Guarantee is, or must be, rescinded or returned for any
reason whatsoever, including without limitation, the insolvency, bankruptcy or reorganization of
any of the Issuers or the Subsidiary Guarantors, the Guarantee shall, to the extent that such
payment is or must be rescinded or returned, be deemed to have continued in existence
notwithstanding such application, and the Guarantee shall continue to be effective or be
reinstated, as the case may be, as though such application had not been made.
(f) Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holders and the
Trustee against the Issuers in respect of any amounts paid by such Subsidiary Guarantor pursuant to
the provisions of this Indenture, provided, however, that such Subsidiary Guarantor, shall not be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all of the Debt Securities and the Guarantee shall have been paid in full or
discharged.
Section 14.02 Execution and Delivery of Guarantee. To further evidence the Guarantee
set forth in Section 14.01, each of the Subsidiary Guarantors hereby agrees that a notation
relating to such Guarantee, substantially in the form attached hereto as Annex A, shall be endorsed
on each Debt Security entitled to the benefits of the Guarantee authenticated and delivered by the
Trustee and executed by either manual or facsimile signature of an Officer of such Subsidiary
Guarantor. Each of the Subsidiary Guarantors hereby agrees that the Guarantee set forth in Section
14.01 shall remain in full force and effect notwithstanding any failure to endorse on each Debt
Security a notation relating to the Guarantee. If any Officer of any Subsidiary Guarantor whose
signature is on this Indenture or a Debt Security no longer holds that office at the time the
Trustee authenticates such Debt Security or at any time thereafter, the Guarantee of such Debt
Security shall be valid nevertheless. The delivery of any Debt Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of the Subsidiary Guarantors.
The Trustee hereby accepts the trusts in this Indenture upon the terms and conditions herein
set forth.
Section 14.03 Limitation on Subsidiary Guarantors Liability. Each Subsidiary
Guarantor and by its acceptance hereof each Holder of a Debt Security entitled to the benefits of
the Guarantee hereby confirm that it is the intention of all such parties that the guarantee by
such Subsidiary Guarantor pursuant to the Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Federal or state law. To effectuate the foregoing intention, the
Holders of a Debt Security entitled to the benefits of the Guarantee and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of each Subsidiary Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under the Guarantee, not result in the obligations of such
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Subsidiary Guarantor under the Guarantee constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law.
Section 14.04 Release of Subsidiary Guarantors from Guarantee.
(a) Notwithstanding any other provisions of this Indenture, the Guarantee of any Subsidiary
Guarantor may be released upon the terms and subject to the conditions set forth in Section
11.02(b) and in this Section 14.04. Provided that no Default shall have occurred and shall be
continuing under this Indenture, the Guarantee incurred by a Subsidiary Guarantor pursuant to this
Article XIV shall be unconditionally released and discharged (i) automatically upon (A) any sale,
exchange or transfer, whether by way of merger or otherwise, to any Person that is not an Affiliate
of the Partnership, of all of the Partnerships direct or indirect limited partnership or other
equity interests in such Subsidiary Guarantor (provided such sale, exchange or transfer is not
prohibited by this Indenture) or (B) the merger of such Subsidiary Guarantor into either of the
Issuers or any other Subsidiary Guarantor or the liquidation and dissolution of such Subsidiary
Guarantor (in each case to the extent not prohibited by this Indenture) or (ii) upon the Issuers
delivery of a written notice to the Trustee of the release or discharge of all guarantees by such
Subsidiary Guarantor of any Debt of the Issuers other than obligations arising under this Indenture
and any Debt Securities issued hereunder, except a discharge or release by or as a result of
payment under such guarantees.
(b) The Trustee shall deliver an appropriate instrument evidencing any release of a Subsidiary
Guarantor from the Guarantee upon receipt of a written request of the Issuers accompanied by an
Officers Certificate and an Opinion of Counsel to the effect that the Subsidiary Guarantor is
entitled to such release in accordance with the provisions of this Indenture. Any Subsidiary
Guarantor not so released shall remain liable for the full amount of principal of (and premium, if
any) and interest on the Debt Securities entitled to the benefits of the Guarantee as provided in
this Indenture, subject to the limitations of Section 14.03.
Section 14.05 Subsidiary Guarantor Contribution. In order to provide for just and
equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors hereby agree,
inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a
Funding Guarantor) under the Guarantee, such Funding Guarantor shall be entitled to a
contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the net
assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Issuers obligations with respect to
the Debt Securities or any other Subsidiary Guarantors obligations with respect to the Guarantee.
[Remainder of This Page Intentionally Left Blank.]
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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.
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DCP MIDSTREAM PARTNERS, LP |
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By:
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DCP MIDSTREAM GP, LP, |
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its General Partner |
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By:
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DCP MIDSTREAM GP, LLC, |
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its General Partner |
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By: |
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Name:
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Title: |
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DCP MIDSTREAM PARTNERS FINANCE CORP. |
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By: |
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Name:
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Title: |
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[NAME OF SUBSIDIARY GUARANTOR(S)] |
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By: |
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Name:
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Title: |
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[ ], as Trustee |
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By: |
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Name:
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[Signature
Page to Subordinated Indenture]
ANNEX A
NOTATION OF GUARANTEE
Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Debt Securities and all other amounts due
and payable under the Indenture and the Debt Securities by the Issuers.
The obligations of the Subsidiary Guarantors to the Holders of Debt Securities and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the
Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.
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[NAME OF SUBSIDIARY GUARANTOR(S)] |
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By: |
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Name:
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Title:
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A-1
exv4w2
Exhibit 4.2
[Form of Subordinated Indenture]
DCP MIDSTREAM PARTNERS, LP
DCP MIDSTREAM PARTNERS FINANCE CORP.
as Issuers,
any Subsidiary Guarantors party hereto,
and
[ ],
as Trustee
INDENTURE
Dated as of
Debt Securities
[Form of Subordinated Indenture]
CROSS-REFERENCE TABLE
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TIA Section |
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Indenture Section |
310 (a) |
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7.10 |
(b) |
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7.10 |
(c) |
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N.A. |
311 (a) |
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7.11 |
(b) |
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7.11 |
(c) |
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N.A. |
312 (a) |
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5.01 |
(b) |
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5.02 |
(c) |
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5.02 |
313 (a) |
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5.03 |
(b) |
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5.03 |
(c) |
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13.03 |
(d) |
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5.03 |
314 (a) |
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4.05 |
(b) |
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N.A. |
(c)(1) |
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13.05 |
(c)(2) |
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13.05 |
(c)(3) |
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N.A. |
(d) |
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N.A. |
(e) |
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13.05 |
(f) |
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N.A. |
315 (a) |
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7.01 |
(b) |
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6.07 & 13.03 |
(c) |
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7.01 |
(d) |
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7.01 |
(e) |
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6.08 |
316 (a) (last sentence) |
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1.01 |
(a)(1)(A) |
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6.06 |
(a)(1)(B) |
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6.06 |
(a)(2) |
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9.01(d) |
(b) |
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6.04 |
(c) |
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5.04 |
317 (a)(1) |
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6.02 |
(a)(2) |
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6.02 |
(b) |
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4.04 |
318 (a) |
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13.07 |
N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of this Indenture.
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS AND INCORPORATION BY REFERENCE
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Section 1.01 |
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Definitions |
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1 |
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Section 1.02 |
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Other Definitions |
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7 |
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Section 1.03 |
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Incorporation by Reference of Trust Indenture Act |
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7 |
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Section 1.04 |
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Rules of Construction |
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7 |
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ARTICLE II
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DEBT SECURITIES
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Section 2.01 |
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Forms Generally |
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8 |
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Section 2.02 |
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Form of Trustee's Certificate of Authentication |
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8 |
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Section 2.03 |
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Principal Amount; Issuable in Series |
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9 |
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Section 2.04 |
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Execution of Debt Securities |
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11 |
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Section 2.05 |
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Authentication and Delivery of Debt Securities |
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11 |
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Section 2.06 |
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Denomination of Debt Securities |
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13 |
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Section 2.07 |
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Registration of Transfer and Exchange |
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13 |
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Section 2.08 |
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Temporary Debt Securities |
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14 |
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Section 2.09 |
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Mutilated, Destroyed, Lost or Stolen Debt Securities |
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15 |
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Section 2.10 |
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Cancellation of Surrendered Debt Securities |
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16 |
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Section 2.11 |
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Provisions of the Indenture and
Debt Securities for the Sole Benefit of the Parties and the Holders |
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16 |
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Section 2.12 |
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Payment of Interest; Interest Rights Preserved |
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16 |
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Section 2.13 |
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Securities Denominated in Dollars |
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17 |
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Section 2.14 |
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Wire Transfers |
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17 |
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Section 2.15 |
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Securities Issuable in the Form of a Global Security |
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17 |
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Section 2.16 |
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Medium Term Securities |
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19 |
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Section 2.17 |
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Defaulted Interest |
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20 |
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Section 2.18 |
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CUSIP Numbers |
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21 |
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ARTICLE III
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REDEMPTION OF DEBT SECURITIES
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Section 3.01 |
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Applicability of Article |
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Section 3.02 |
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Notice of Redemption; Selection of Debt Securities |
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Section 3.03 |
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Payment of Debt Securities Called for Redemption |
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23 |
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Section 3.04 |
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Mandatory and Optional Sinking Funds |
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23 |
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Section 3.05 |
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Redemption of Debt Securities for Sinking Fund |
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24 |
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ARTICLE IV
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PARTICULAR COVENANTS OF THE ISSUERS
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Section 4.01 |
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Payment of Principal of, and Premium, If Any, and Interest on, Debt Securities |
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Section 4.02 |
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Maintenance of Offices or Agencies for Registration of Transfer, Exchange and Payment of Debt Securities |
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Section 4.03
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Appointment to Fill a Vacancy in the Office of Trustee
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Section 4.04
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Duties of Paying Agents, etc.
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26 |
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Section 4.05
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SEC Reports; Financial Statements
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27 |
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Section 4.06
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Compliance Certificate
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27 |
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Section 4.07
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Further Instruments and Acts
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28 |
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Section 4.08
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Existence
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28 |
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Section 4.09
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Maintenance of Properties
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28 |
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Section 4.10
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Payment of Taxes and Other Claims
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Section 4.11
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Waiver of Certain Covenants
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ARTICLE V
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HOLDERS LISTS AND REPORTS BY THE TRUSTEE
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Section 5.01
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Issuers to Furnish Trustee Information as
to Names and Addresses of Holders;
Preservation of Information
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29 |
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Section 5.02
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Communications to Holders
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29 |
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Section 5.03
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Reports by Trustee
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30 |
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Section 5.04
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Record Dates for Action by Holders
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30 |
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ARTICLE VI
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REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
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Section 6.01
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Events of Default
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30 |
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Section 6.02
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Collection of Debt by Trustee, etc.
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32 |
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Section 6.03
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Application of Moneys Collected by Trustee
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34 |
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Section 6.04
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Limitation on Suits by Holders
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Section 6.05
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Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of Default
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35 |
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Section 6.06
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Rights of Holders of Majority in Principal Amount of Debt Securities to Direct Trustee and to Waive Default
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35 |
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Section 6.07
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Trustee to Give Notice of Events of Defaults Known to It, but May Withhold Such Notice in Certain Circumstances
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36 |
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Section 6.08
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Requirement of an Undertaking to Pay Costs in Certain Suits under the Indenture or Against the Trustee
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ARTICLE VII
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CONCERNING THE TRUSTEE
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Section 7.01
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Certain Duties and Responsibilities
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37 |
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Section 7.02
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Certain Rights of Trustee
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38 |
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Section 7.03
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Trustee Not Liable for Recitals in Indenture or in Debt Securities
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39 |
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Section 7.04
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Trustee, Paying Agent or Registrar May Own Debt Securities
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39 |
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Section 7.05
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Moneys Received by Trustee to Be Held in Trust
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39 |
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Section 7.06
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Compensation and Reimbursement
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39 |
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Section 7.07
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Right of Trustee to Rely on an Officers Certificate Where No Other
Evidence Specifically Prescribed
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40 |
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Section 7.08
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Separate Trustee; Replacement of Trustee
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40 |
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Section 7.09
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Successor Trustee by Merger
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41 |
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Section 7.10
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Eligibility; Disqualification
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Section 7.11
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Preferential Collection of Claims Against Issuers
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42 |
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Section 7.12
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Compliance with Tax Laws
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42 |
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ARTICLE VIII
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CONCERNING THE HOLDERS
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Section 8.01
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Evidence of Action by Holders
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42 |
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Section 8.02
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Proof of Execution of Instruments and of Holding of Debt Securities
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43 |
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Section 8.03
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Who May Be Deemed Owner of Debt Securities
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43 |
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Section 8.04
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Instruments Executed by Holders Bind Future Holders
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43 |
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ARTICLE IX
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SUPPLEMENTAL INDENTURES
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Section 9.01
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Purposes for Which Supplemental Indenture May Be Entered into Without Consent
of Holders
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44 |
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Section 9.02
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Modification of Indenture with Consent of Holders of Debt Securities
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46 |
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Section 9.03
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Effect of Supplemental Indentures
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47 |
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Section 9.04
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Debt Securities May Bear Notation of Changes by Supplemental Indentures
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47 |
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ARTICLE X
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CONSOLIDATION, MERGER, SALE OR CONVEYANCE
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Section 10.01
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Consolidations and Mergers of the Issuers
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48 |
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Section 10.02
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Rights and Duties of Successor Company
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48 |
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ARTICLE XI
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SATISFACTION AND DISCHARGE OF INDENTURE;
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DEFEASANCE; UNCLAIMED MONEYS
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Section 11.01
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Applicability of Article
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49 |
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Section 11.02
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Satisfaction and Discharge of Indenture; Defeasance
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49 |
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Section 11.03
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Conditions of Defeasance
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50 |
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Section 11.04
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Application of Trust Money
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51 |
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Section 11.05
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Repayment to Issuers
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51 |
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Section 11.06
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Indemnity for U.S. Government Obligations
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51 |
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Section 11.07
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Reinstatement
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51 |
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ARTICLE XII
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SUBORDINATION OF DEBT SECURITIES AND GUARANTEE
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Section 12.01
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Applicability of Article; Agreement to Subordinate
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52 |
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Section 12.02
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Liquidation, Dissolution, Bankruptcy
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52 |
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Section 12.03
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Default on Senior Indebtedness
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52 |
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Section 12.04
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Acceleration of Payment of Debt Securities
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53 |
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Section 12.05
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When Distribution Must Be Paid Over
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53 |
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Section 12.06
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Subrogation
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54 |
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Section 12.07
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Relative Rights
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54 |
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Section 12.08
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Subordination May Not Be Impaired by Issuers
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54 |
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Section 12.09
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Rights of Trustee and Paying Agent
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54 |
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Section 12.10
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Distribution or Notice to Representative
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55 |
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Section 12.11
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Article XII Not to Prevent Defaults or Limit Right to Accelerate
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55 |
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Section 12.12
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Trust Moneys Not Subordinated
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55 |
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Section 12.13
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Trustee Entitled to Rely
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55 |
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Section 12.14
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Trustee to Effectuate Subordination
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55 |
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Section 12.15
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Trustee Not Fiduciary for Holders of Senior Indebtedness
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56 |
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Section 12.16
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Reliance by Holders of Senior Indebtedness on Subordination Provisions
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56 |
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ARTICLE XIII
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MISCELLANEOUS PROVISIONS
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Section 13.01
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Successors and Assigns of Issuers Bound by Indenture
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56 |
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Section 13.02
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Acts of Board, Committee or Officer of Successor Issuer Valid
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56 |
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Section 13.03
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Required Notices or Demands
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56 |
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Section 13.04
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Indenture and Debt Securities to Be Construed in Accordance with the
Laws of the State of New York
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57 |
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Section 13.05
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Officers Certificate and Opinion of Counsel to Be Furnished upon
Application or Demand by the Issuers
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57 |
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Section 13.06
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Payments Due on Legal Holidays
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58 |
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Section 13.07
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Provisions Required by TIA to Control
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58 |
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Section 13.08
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Computation of Interest on Debt Securities
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58 |
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Section 13.09
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Rules by Trustee, Paying Agent and Registrar
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58 |
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Section 13.10
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No Recourse Against Others
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58 |
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Section 13.11
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Severability
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59 |
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Section 13.12
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Effect of Headings
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59 |
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Section 13.13
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Indenture May Be Executed in Counterparts
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59 |
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ARTICLE XIV
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GUARANTEE
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Section 14.01
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Unconditional Guarantee
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59 |
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Section 14.02
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Execution and Delivery of Guarantee
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61 |
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Section 14.03
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Limitation on Subsidiary Guarantors Liability
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61 |
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Section 14.04
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Release of Subsidiary Guarantors from Guarantee
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61 |
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Section 14.05
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Subsidiary Guarantor Contribution
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62 |
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Notation of Guarantee |
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Annex A
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-v-
THIS INDENTURE dated as of is among DCP Midstream Partners, LP, a Delaware limited
partnership (the Partnership), DCP Midstream Partners Finance Corp. (Finance Corp., and
together with the Partnership, the Issuers), any Subsidiary Guarantors (as defined herein party
hereto and [ ], a , as trustee (the Trustee).
RECITALS OF THE ISSUERS AND ANY SUBSIDIARY GUARANTORS
The Issuers and any Subsidiary Guarantors have duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of the Issuers debentures, notes,
bonds or other evidences of indebtedness to be issued in one or more series unlimited as to
principal amount (herein called the Debt Securities), which Debt Securities may be guaranteed by
each of the Subsidiary Guarantors and may be subordinated in right of payment to Senior
Indebtedness, as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Issuers and any
Subsidiary Guarantors, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt Securities are
authenticated, issued and delivered, and in consideration of the premises, and of the purchase and
acceptance of the Debt Securities by the Holders thereof, the Issuers, any Subsidiary Guarantor and
the Trustee covenant and agree with each other, for the benefit of the respective Holders from time
to time of the Debt Securities or any series thereof, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
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. The Trustee may request and may
conclusively rely upon an Officers Certificate to determine whether any Person is an Affiliate of
any specified Person.
Agent means any Registrar or paying agent.
Bankruptcy Law means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.
Board of Directors means, (i) with respect to Finance Corp., the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such board, (ii) with
respect to the Partnership, the Board of Directors of the General Partner or any authorized
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committee of the Board of Directors of the General Partner or any directors and/or officers of
the General Partner to whom such Board of Directors or such committee shall have duly delegated its
authority to act hereunder. If the Partnership shall change its form of entity to other than a
limited partnership, the references to the Board of Directors of the General Partner shall mean the
Board of Directors (or other comparable governing body) of the Partnership.
Business Day means any day other than a Legal Holiday.
capital stock of any Person means and includes any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable), participations or other equivalents of
or interests in (however designated) the equity (which includes, but is not limited to, common
stock, preferred stock and partnership and joint venture interests) of such Person (excluding any
debt securities that are convertible into, or exchangeable for, such equity).
Custodian means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Debt of any Person at any date means any obligation created or assumed by such Person for
the repayment of borrowed money and any guarantee thereof.
Debt Security or Debt Securities has the meaning stated in the first recital of this
Indenture and more particularly means any debt security or debt securities, as the case may be of
any series authenticated and delivered under this Indenture.
Default means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.
Depositary means, unless otherwise specified by the Issuers pursuant to either Section 2.03
or 2.15, with respect to Debt Securities of any series issuable or issued in whole or in part in
the form of one or more Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or other applicable
statute or regulations.
Designated Senior Indebtedness means (i) any Senior Indebtedness which, at the date of
determination, has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $100 million and (ii) any
other Senior Indebtedness designated, as provided in Section 2.03, in respect of any series of Debt
Securities.
Dollar or $ means such currency of the United States as at the time of payment is legal
tender for the payment of public and private debts.
Exchange Act means the Securities Exchange Act of 1934, as amended, and any successor
statute.
Finance Corp. means the Person named as Finance Corp. in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the applicable terms of this
Indenture, and thereafter Finance Corp. shall mean such successor Person.
- 2 -
Floating Rate Security means a Debt Security that provides for the payment of interest at a
variable rate determined periodically by reference to an interest rate index specified pursuant to
Section 2.03.
GAAP means generally accepted accounting principles in the United States, as in effect from
time to time.
General Partner means DCP Midstream GP, LLC, a Delaware limited liability company, and its
successors and permitted assigns as general partner of DCP Midstream GP, LP, a Delaware limited
partnership, and its successors and permitted assigns as general partner of the Partnership or as
the business entity with the ultimate authority to manage the business and operations of the
Partnership.
Global Security means with respect to any series of Debt Securities issued hereunder, a Debt
Security which is executed by the Issuers and authenticated and delivered by the Trustee to the
Depositary or pursuant to the Depositarys instruction, all in accordance with this Indenture and
any Indentures supplemental hereto, or resolution of the Board of Directors and set forth in an
Officers Certificate, which shall be registered in the name of the Depositary or its nominee and
which shall represent, and shall be denominated in an amount equal to the aggregate principal
amount of, all the Outstanding Debt Securities of such series or any portion thereof, in either
case having the same terms, including, without limitation, the same original issue date, date or
dates on which principal is due and interest rate or method of determining interest.
guarantee means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt or other obligation of any other Person and any obligation, direct
or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (b) entered into for purposes of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The term guarantee
used as a verb has a corresponding meaning.
Holder, Holder of Debt Securities or other similar terms means, a Person in whose name a
Debt Security is registered in the Debt Security Register (as defined in Section 2.07(a)).
Indenture means this instrument as originally executed, or, if amended or supplemented as
herein provided, as so amended or supplemented and shall include the form and terms of particular
series of Debt Securities as contemplated hereunder, whether or not a supplemental Indenture is
entered into with respect thereto.
Issuers means the Partnership and Finance Corp.
Issuer Order means a written request or order signed on behalf of each of the Issuers by one
of its Officers and delivered to the Trustee.
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Legal Holiday means a Saturday, a Sunday or a day on which banking institutions in the City
of Houston, Texas, City of New York, New York or at a Place of Payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal Holiday at a Place of
Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
Lien means, with respect to any asset, any mortgage, lien, security interest, pledge, charge
or other encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law.
Officer means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Vice President of such Person (or, if
such Person is a limited partnership, the general partner of such Person, except it shall be the
General Partner in the case of the Partnership so long as it is a limited partnership).
Officers Certificate means a certificate signed on behalf of each Issuer by any two of its
Officers, one of whom must be the principal executive officer, the principal financial officer or
the principal accounting officer of such Issuer, that meets the requirements of Section 13.05
hereof.
Opinion of Counsel means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Partnership or the Trustee.
Original Issue Discount Debt Security means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration of acceleration of
the maturity thereof pursuant to Section 6.01.
Outstanding, when used with respect to any series of Debt Securities, means, as of the date
of determination, all Debt Securities of that series theretofore authenticated and delivered under
this Indenture, except:
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(a) |
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Debt Securities of that series theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; |
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(b) |
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Debt Securities of that series for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any paying agent
(other than an Issuer) in trust or set aside and segregated in trust by the Issuers (if
an Issuer shall act as its own paying agent) for the Holders of such Debt Securities;
provided, that, if such Debt Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and |
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(c) |
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Debt Securities of that series which have been paid pursuant to Section 2.09 or
in exchange for or in lieu of which other Debt Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Debt Securities in respect of
which there shall have been presented to the Trustee proof satisfactory |
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to it that such Debt Securities are held by a protected purchaser in whose hands
such Debt Securities are valid obligations of the Issuers; |
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Debt Securities of any series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Debt Securities owned by either of the Issuers or any other
obligor upon the Debt 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 Debt Securities which a Trust Officer actually knows to be so owned shall
be so disregarded. Debt 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 pledgees right so
to act with respect to such Debt Securities and that the pledgee is not an Issuer or any other
obligor upon the Debt Securities or an Affiliate of the Partnership or of such other obligor. In
determining whether the Holders of the requisite principal amount of Outstanding Debt Securities
have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Debt Security that shall be deemed to be Outstanding
for such purposes shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of the maturity thereof pursuant
to Section 6.01.
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.
Person means any individual, corporation, partnership, joint venture, limited liability
company, incorporated or unincorporated association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof or other entity of any
kind.
Redemption Date, when used with respect to any Debt Security to be redeemed, means the date
fixed for such redemption by or pursuant to this Indenture.
Representative means the trustee, agent or representative (if any) for an issue of Senior
Debt.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended, and any successor statute.
Senior Indebtedness, unless otherwise provided with respect to the Debt Securities of a
series as contemplated by Section 2.03, means (1) all Debt of the Subsidiary Guarantors or the
Issuers, whether currently outstanding or hereafter issued, unless, by the terms of the instrument
creating or evidencing such Debt, it is provided that such Debt is subordinate or not superior in
right of payment to the Debt Securities, in the case of the Issuers, or the Guarantee, in the case
of the Subsidiary Guarantors, or to other Debt which is pari passu with or subordinated to the Debt
Securities, in the case of the Issuers, or the Guarantee, in the case of the Subsidiary Guarantors,
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and (2) any modifications, refunding, deferrals, renewals, or extensions of any such Debt or
securities, notes or other evidence of Debt issued in exchange for such Debt; provided that in
no event shall Senior Indebtedness include (a) Debt evidenced by the Debt Securities or any
Guarantee, (b) Debt of any of the Subsidiary Guarantors or the Issuers owed or owing to any
Subsidiary of the Partnership, (c) Debt of any of the Subsidiary Guarantors owed or owing to the
Issuers, (d) Debt to trade creditors, (e) any liability for taxes owed or owing by any of the
Subsidiary Guarantors or the Issuers or (f) Debt of any Subsidiary Guarantor in the event there is
no series of Debt Securities Outstanding that is entitled to the benefits of a Guarantee.
Stated Maturity means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).
Subsidiary of any Person means:
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(1) |
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any corporation, association or other business entity of which more than 50% of
the total voting power of equity interests entitled, without regard to the occurrence
of any contingency, to vote in the election of directors, managers, trustees or
equivalent Persons thereof is at the time of determination owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries of such
Person or combination thereof; or |
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(2) |
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in the case of a partnership, more than 50% of the partners equity interests,
considering all partners equity interests as a single class, is at such time of
determination owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of such Person or combination thereof. |
Subsidiary Guarantors means any Subsidiary of the Partnership (except Finance Corp.) who may
execute this Indenture, or a supplement hereto, for the purpose of providing a Guarantee of Debt
Securities pursuant to this Indenture until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter Subsidiary Guarantors shall mean such
successor Person.
TIA means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb), as in
effect on the date of this Indenture as originally executed and, to the extent required by law, as
amended.
Trustee initially means [ ] and any other Person or Persons appointed as
such from time to time pursuant to Section 7.08, and, subject to the provisions of Article VII,
includes its or their successors and assigns. If at any time there is more than one such Person,
Trustee as used with respect to the Debt Securities of any series shall mean the Trustee with
respect to the Debt Securities of that series.
Trust Officer means any officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
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United States means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its jurisdiction.
U.S. Government Obligations means direct obligations of the United States of America,
obligations on which the payment of principal and interest is fully guaranteed by the United States
of America or obligations or guarantees for the payment of which the full faith and credit of the
United States of America is pledged.
Yield to Maturity means the yield to maturity, calculated at the time of issuance of a
series of Debt Securities, or, if applicable, at the most recent redetermination of interest on
such series and calculated in accordance with accepted financial practice.
Section 1.02 Other Definitions.
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Term |
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Defined in Section |
Debt Security Register
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2.07 |
Defaulted Interest
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2.17 |
Event of Default
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6.01 |
Funding Guarantor
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14.05 |
Guarantee
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14.01 |
Place of Payment
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2.03 |
Registrar
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2.07 |
Subordinated Debt Securities
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12.01 |
Successor Company
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10.01 |
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture.
All terms used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;
(c) or is not exclusive;
(d) words in the singular include the plural, and in the plural include the singular;
(e) provisions apply to successive events and transactions;
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(f) if the applicable series of Debt Securities are subordinated pursuant to Article XII,
unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of
its nature as unsecured Debt; and
(g) the principal amount of any noninterest bearing or other discount security at any date
shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP.
ARTICLE II
DEBT SECURITIES
Section 2.01 Forms Generally. The Debt Securities of each series shall be in
substantially the form established without the approval of any Holder by or pursuant to a
resolution of the Board of Directors of each Issuer or in one or more Indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as the Issuers may
deem appropriate (and, if not contained in a supplemental Indenture entered into in accordance with
Article IX, as are not prohibited by the provisions of this Indenture) or as may be required or
appropriate to comply with any law or with any rules made pursuant thereto or with any rules of any
securities exchange on which such series of Debt Securities may be listed, or to conform to general
usage, or as may, consistently herewith, be determined by the officers executing such Debt
Securities as evidenced by their execution of the Debt Securities.
The definitive Debt Securities of each series 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 Debt Securities, as evidenced by their execution of such Debt Securities.
Section 2.02 Form of Trustees Certificate of Authentication. The Trustees
certificate of authentication on all Debt Securities authenticated by the Trustee shall be in
substantially the following form:
TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein referred to in the
within-mentioned Indenture.
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[ ],
As Trustee |
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By: |
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Authorized Signatory |
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Section 2.03 Principal Amount; Issuable in Series. The aggregate principal amount of
Debt Securities which may be issued, executed, authenticated, delivered and outstanding under this
Indenture is unlimited.
The Debt Securities may be issued in one or more series in fully registered form. There shall
be established, without the approval of any Holders, in or pursuant to a resolution of the Board of
Directors of each Issuer and set forth in an Officers Certificate, or established in one or more
Indentures supplemental hereto, prior to the issuance of Debt Securities of any series any or all
of the following:
(a) the title of the Debt Securities of the series (which shall distinguish the Debt
Securities of the series from all other Debt Securities);
(b) any limit upon the aggregate principal amount of the Debt Securities of the series which
may be authenticated and delivered under this Indenture (except for Debt Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
(c) the date or dates on which the principal of and premium, if any, on the Debt Securities of
the series are payable;
(d) the rate or rates (which may be fixed or variable) at which the Debt Securities of the
series shall bear interest, if any, or the method of determining such rate or rates, the date or
dates from which such interest shall accrue, the interest payment dates on which such interest
shall be payable, or the method by which such date will be determined, the record dates for the
determination of Holders thereof to whom such interest is payable; and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve thirty-day months;
(e) the place or places, if any, in addition to or instead of the corporate trust office of
the Trustee, where the principal of, and premium, if any, and interest on, Debt Securities of the
series shall be payable (Place of Payment);
(f) the price or prices at which, the period or periods within which and the terms and
conditions upon which Debt Securities of the series may be redeemed, in whole or in part, at the
option of the Issuers or otherwise;
(g) whether Debt Securities of the series are entitled to the benefits of any Guarantee of any
Subsidiary Guarantors pursuant to this Indenture;
(h) the obligation, if any, of the Issuers to redeem, purchase or repay Debt Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof,
and the price or prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligations;
(i) the terms, if any, upon which the Debt Securities of the series may be convertible into or
exchanged for capital stock (which may be represented by depositary shares), other Debt Securities
or warrants for capital stock or Debt or other securities of any kind of either of the
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Issuers or any other obligor and the terms and conditions upon which such conversion or
exchange shall be effected, including the initial conversion or exchange price or rate, the
conversion or exchange period and any other provision in addition to or in lieu of those described
herein;
(j) if other than denominations of $1,000 and any integral multiple thereof, the denominations
in which Debt Securities of the series shall be issuable;
(k) if the amount of principal of or any premium or interest on Debt Securities of the series
may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts will be determined;
(l) if the principal amount payable at the Stated Maturity of Debt Securities of the series
will not be determinable as of any one or more dates prior to such Stated Maturity, the amount
which will be deemed to be such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity other than the Stated
Maturity or which will be deemed to be Outstanding as of any such date (or, in any such case, the
manner in which such deemed principal amount is to be determined);
(m) any changes or additions to Article XI, including the addition of additional covenants
that may be subject to the covenant defeasance option pursuant to Section 11.02(b);
(n) if other than the principal amount thereof, the portion of the principal amount of Debt
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01 or provable in bankruptcy pursuant to Section 6.02;
(o) the terms, if any, of the transfer, mortgage, pledge or assignment as security for the
Debt Securities of the series of any properties, assets, moneys, proceeds, securities or other
collateral, including whether certain provisions of the TIA are applicable and any corresponding
changes to provisions of this Indenture as currently in effect;
(p) any addition to or change in the Events of Default with respect to the Debt Securities of
the series and any change in the right of the Trustee or the Holders to declare the principal of,
and premium and interest on, such Debt Securities due and payable;
(q) if the Debt Securities of the series shall be issued in whole or in part in the form of a
Global Security or Securities, the terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual Debt Securities in definitive
registered form; and the Depositary for such Global Security or Securities and the form of any
legend or legends to be borne by any such Global Security or Securities in addition to or in lieu
of the legend referred to in Section 2.15(a);
(r) any trustees, authenticating or paying agents, transfer agents or registrars;
(s) the applicability of, and any addition to or change in the covenants and definitions
currently set forth in this Indenture or in the terms currently set forth in Article X, including
conditioning any merger, conveyance, transfer or lease permitted by Article X upon the
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satisfaction of any Debt coverage standard by the Issuers and Successor Company (as defined in
Article X);
(t) the subordination, if any, of the Debt Securities of the series pursuant to Article XII
and any changes or additions to Article XII or designation of any Designated Senior Indebtedness;
(u) with regard to Debt Securities of the series that do not bear interest, the dates for
certain required reports to the Trustee; and
(v) any other terms of the Debt Securities of the series (which terms shall not be prohibited
by the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to such resolution of the Board
of Directors and as set forth in such Officers Certificate or in any such Indenture supplemental
hereto.
Section 2.04 Execution of Debt Securities. The Debt Securities shall be signed on
behalf of each of the Issuers by at least one of its Officers. Such signatures upon the Debt
Securities may be the manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Debt Securities.
Only such Debt Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, signed manually by the Trustee, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Debt Security executed on behalf of each of the Issuers by at least one of its Officers shall
be conclusive evidence that the Debt Security so authenticated has been duly authenticated and
delivered hereunder.
In case any Officer of either Issuer who shall have signed any of the Debt Securities shall
cease to be such Officer before the Debt Securities so signed shall have been authenticated and
delivered by the Trustee, or disposed of by the Issuers, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such Debt Securities had
not ceased to be such Officer; and any Debt Security may be signed on behalf of either Issuer by
such Persons as, at the actual date of the execution of such Debt Security, shall be the proper
Officers of such Issuer, although at the date of such Debt Security or of the execution of this
Indenture any such Person was not such Officer.
Section 2.05 Authentication and Delivery of Debt Securities. At any time and from
time to time after the execution and delivery of this Indenture, the Issuers may deliver to the
Trustee for authentication Debt Securities of any series executed by the Issuers, and the Trustee
shall thereupon authenticate and deliver said Debt Securities to or upon an Issuer Order. In
authenticating such Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying upon:
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(a) a copy of any resolution or resolutions of the Board of Directors of each Issuer,
certified by the Secretary or Assistant Secretary of each of the General Partner and Finance Corp.,
authorizing the terms of issuance of any series of Debt Securities;
(b) an executed supplemental Indenture, if any;
(c) an Officers Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section 13.05 which shall also state:
(i) that the form of such Debt Securities has been established by or pursuant to a
resolution of the Board of Directors of each Issuer or by a supplemental Indenture as
permitted by Section 2.01 in conformity with the provisions of this Indenture;
(ii) that the terms of such Debt Securities have been established by or pursuant to a
resolution of the Board of Directors or by a supplemental Indenture as permitted by Section
2.03 in conformity with the provisions of this Indenture;
(iii) that such Debt Securities, when authenticated and delivered by the Trustee and
issued by the Issuers in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of the Issuers,
enforceable in accordance with their terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors
rights generally and rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;
(iv) that the Issuers have the power to issue such Debt Securities and has duly taken
all necessary action with respect to such issuance;
(v) that the issuance of such Debt Securities will not contravene the organizational
documents of the Issuers or result in any material violation of any of the terms or
provisions of any law or regulation or of any material indenture, mortgage or other
agreement known to such counsel by which the Issuers are bound;
(vi) that authentication and delivery of such Debt Securities and the execution and
delivery of any supplemental Indenture will not violate the terms of this Indenture; and
(vii) such other matters as the Trustee may reasonably request.
Such Opinion of Counsel need express no opinion as to whether a court in the United States
would render a money judgment in a currency other than that of the United States.
The Trustee shall have the right to decline to authenticate and deliver any Debt Securities
under this Section 2.05 if the Trustee, being advised by counsel, determines that such action may
not lawfully be taken or if the Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee of directors, trustees or Officers (or any combination
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thereof) shall determine that such action would expose the Trustee to personal liability to
existing Holders.
The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to
authenticate Debt Securities of any series. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Debt Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as any Registrar, paying agent or agent for service of
notices and demands.
Unless otherwise provided in the form of Debt Security for any series, each Debt Security
shall be dated the date of its authentication.
Section 2.06 Denomination of Debt Securities. Unless otherwise provided in the form
of Debt Security for any series, the Debt Securities of each series shall be issuable only as fully
registered Debt Securities in such Dollar denominations as shall be specified or contemplated by
Section 2.03. In the absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.
Section 2.07 Registration of Transfer and Exchange.
(a) The Issuers shall keep or cause to be kept a register for each series of Debt Securities
issued hereunder (hereinafter collectively referred to as the Debt Security Register), in which,
subject to such reasonable regulations as it may prescribe, the Issuers shall provide for the
registration of all Debt Securities and the transfer of Debt Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for inspection by the
Trustee. Subject to Section 2.15, upon due presentment for registration of transfer of any Debt
Security at any office or agency to be maintained by the Issuers in accordance with the provisions
of Section 4.02, the Issuers shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Debt Security or Debt Securities of authorized
denominations for a like aggregate principal amount. In no event may Debt Securities be issued as,
or exchanged for, bearer securities.
Unless and until otherwise determined by the Issuers by resolutions of each Issuers Board of
Directors, the Debt Security Register shall be kept at the principal corporate trust office of the
Trustee and, for this purpose, the Trustee shall be designated Registrar.
Debt Securities of any series (other than a Global Security, except as set forth below) may be
exchanged for a like aggregate principal amount of Debt Securities of the same series of other
authorized denominations. Subject to Section 2.15, Debt Securities to be exchanged shall be
surrendered at the office or agency to be maintained by the Issuers as provided in Section 4.02,
and the Issuers shall execute and the Trustee shall authenticate and deliver in exchange therefor
the Debt Security or Debt Securities which the Holder making the exchange shall be entitled to
receive.
(b) All Debt Securities presented or surrendered for registration of transfer, exchange or
payment shall (if so required by the Issuers, the Trustee or the Registrar) be duly endorsed or
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be accompanied by a written instrument or instruments of transfer, in form satisfactory to the
Issuers, the Trustee and the Registrar, duly executed by the Holder or his attorney duly authorized
in writing.
All Debt Securities issued in exchange for or upon transfer of Debt Securities shall be the
valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under
this Indenture as the Debt Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of transfer of Debt
Securities (except as provided by Section 2.09), but the Issuers may require payment of a sum
sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in
relation thereto, other than those expressly provided in this Indenture to be made at the Issuers
own expense or without expense or without charge to the Holders.
The Issuers shall not be required (i) to issue, register the transfer of or exchange any Debt
Securities for a period of 15 days next preceding any mailing of notice of redemption of Debt
Securities of such series or (ii) to register the transfer of or exchange any Debt Securities
selected, called or being called for redemption.
Prior to the due presentation for registration of transfer of any Debt Security, the Issuers,
the Subsidiary Guarantors, the Trustee, any paying agent or any Registrar may deem and treat the
Person in whose name a Debt Security is registered as the absolute owner of such Debt Security for
the purpose of receiving payment of or on account of the principal of, and premium, if any, and
(subject to Section 2.12) interest on, such Debt Security and for all other purposes whatsoever,
whether or not such Debt Security is overdue, and none of the Issuers, the Subsidiary Guarantors,
the Trustee, any paying agent or any Registrar shall be affected by notice to the contrary.
None of the Issuers, the Subsidiary Guarantors, the Trustee, any agent of the Trustee, any
paying agent or any Registrar 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 2.08 Temporary Debt Securities. Pending the preparation of definitive Debt
Securities of any series, the Issuers may execute and the Trustee shall authenticate and deliver
temporary Debt Securities (printed, lithographed, photocopied, typewritten or otherwise produced)
of any authorized denomination, and substantially in the form of the definitive Debt Securities in
lieu of which they are issued, in registered form with such omissions, insertions and variations as
may be appropriate for temporary Debt Securities, all as may be determined by the Issuers with the
concurrence of the Trustee. Temporary Debt Securities may contain such reference to any provisions
of this Indenture as may be appropriate. Every temporary Debt Security shall be executed by the
Issuers and be authenticated by the Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Debt Securities.
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If temporary Debt Securities of any series are issued, the Issuers will cause definitive Debt
Securities of such series to be prepared without unreasonable delay. After the preparation of
definitive Debt Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Issuers at a Place of Payment for such
series, without charge to the Holder thereof, except as provided in Section 2.07 in connection with
a transfer. Upon surrender for cancellation of any one or more temporary Debt Securities of any
series, the Issuers shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Debt Securities of the same series of authorized
denominations and of like tenor. Until so exchanged, temporary Debt Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities
of such series.
Upon any exchange of a portion of a temporary Global Security for a definitive Global Security
or for the individual Debt Securities represented thereby pursuant to Section 2.07 or this Section
2.08, the temporary Global Security shall be endorsed by the Trustee to reflect the reduction of
the principal amount evidenced thereby, whereupon the principal amount of such temporary Global
Security shall be reduced for all purposes by the amount to be exchanged and endorsed.
Section 2.09 Mutilated, Destroyed, Lost or Stolen Debt Securities. If (a) any
mutilated Debt Security is surrendered to the Trustee at its corporate trust office or (b) the
Issuers and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of
any Debt Security, and there is delivered to the Issuers and the Trustee such security or indemnity
as may be required by them to save each of them and any paying agent harmless, and neither the
Issuers nor the Trustee receives notice that such Debt Security has been acquired by a protected
purchaser, then the Issuers shall execute and, upon an Issuer Order, the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Debt
Security, a new Debt Security of the same series of like tenor, form, terms and principal amount,
bearing a number not contemporaneously Outstanding. Upon the issuance of any substituted Debt
Security, the Issuers or the Trustee may require the payment of a sum sufficient to cover any tax,
fee, assessment or other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Debt Security which has matured or is about to mature or
which has been called for redemption shall become mutilated or be destroyed, lost or stolen, the
Issuers may, instead of issuing a substituted Debt Security, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Debt Security) if the applicant
for such payment shall furnish the Issuers and the Trustee with such security or indemnity as
either may require to save it harmless from all risk, however remote, and, in case of destruction,
loss or theft, evidence to the satisfaction of the Issuers and the Trustee of the destruction, loss
or theft of such Debt Security and of the ownership thereof.
Every substituted Debt Security of any series issued pursuant to the provisions of this
Section 2.09 by virtue of the fact that any Debt Security is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Issuers, whether or not the
destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all other Debt Securities
of that series duly issued hereunder. All Debt Securities shall be held and owned upon the express
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condition that the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities, and shall preclude any and all
other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments or other securities
without their surrender.
Section 2.10 Cancellation of Surrendered Debt Securities. All Debt Securities
surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to
an Issuer or any paying agent or a Registrar, be delivered to the Trustee for cancellation by it,
or if surrendered to the Trustee, shall be canceled by it, and no Debt Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Indenture. All
canceled Debt Securities held by the Trustee shall be destroyed (subject to the record retention
requirements of the Exchange Act) and certification of their destruction delivered to the Issuers,
unless otherwise directed. On request of the Issuers, the Trustee shall deliver to the Issuers
canceled Debt Securities held by the Trustee. If either of the Issuers shall acquire any of the
Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
Debt represented thereby unless and until the same are delivered or surrendered to the Trustee for
cancellation. The Issuers may not issue new Debt Securities to replace Debt Securities it has
redeemed, paid or delivered to the Trustee for cancellation.
Section 2.11 Provisions of the Indenture and Debt Securities for the Sole Benefit of the
Parties and the Holders. Nothing in this Indenture or in the Debt Securities, expressed or
implied, shall give or be construed to give to any Person, other than the parties hereto, the
holders of any Senior Indebtedness, the Holders or any Registrar or paying agent, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all its covenants, conditions and provisions being for the
sole benefit of the parties hereto, the Holders and any Registrar and paying agents.
Section 2.12 Payment of Interest; Interest Rights Preserved.
(a) Interest on any Debt Security that is payable and is punctually paid or duly provided for
on any interest payment date shall be paid to the Person in whose name such Debt Security is
registered at the close of business on the regular record date for such interest notwithstanding
the cancellation of such Debt Security upon any transfer or exchange subsequent to the regular
record date. Payment of interest on Debt Securities shall be made at the corporate trust office of
the Trustee (except as otherwise specified pursuant to Section 2.03), or at the option of the
Issuers, by check mailed to the address of the Person entitled thereto as such address shall appear
in the Debt Security Register or, if provided pursuant to Section 2.03 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Holder by wire transfer to an
account designated by the Holder.
(b) Subject to the foregoing provisions of this Section 2.12 and Section 2.17, each Debt
Security of a particular series delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other Debt Security.
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Section 2.13 Securities Denominated in Dollars. Except as otherwise specified
pursuant to Section 2.03 for Debt Securities of any series, payment of the principal of, and
premium, if any, and interest on, Debt Securities of such series will be made in Dollars.
Section 2.14 Wire Transfers. Notwithstanding any other provision to the contrary in
this Indenture, the Issuers may make any payment of moneys required to be deposited with the
Trustee on account of principal of, or premium, if any, or interest on, the Debt Securities
(whether pursuant to optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the Trustee before 11:00
a.m., New York City time, on the date such moneys are to be paid to the Holders of the Debt
Securities in accordance with the terms hereof.
Section 2.15 Securities Issuable in the Form of a Global Security.
(a) If the Issuers shall establish pursuant to Sections 2.01 and 2.03 that the Debt Securities
of a particular series are to be issued in whole or in part in the form of one or more Global
Securities, then the Issuers shall execute and the Trustee or its agent shall, in accordance with
Section 2.05, authenticate and deliver, such Global Security or Securities, which shall represent,
and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding
Debt Securities of such series to be represented by such Global Security or Securities, or such
portion thereof as the Issuers shall specify in an Officers Certificate, shall be registered in
the name of the Depositary for such Global Security or Securities or its nominee, shall be
delivered by the Trustee or its agent to the Depositary or pursuant to the Depositarys instruction
and shall bear a legend substantially to the following effect:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (DTC), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO HEREIN.
or such other legend as may then be required by the Depositary for such Global Security or
Securities.
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(b) Notwithstanding any other provision of this Section 2.15 or of Section 2.07 to the
contrary, and subject to the provisions of paragraph (c) below, unless the terms of a Global
Security expressly permit such Global Security to be exchanged in whole or in part for definitive
Debt Securities in registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee of the Depositary
for such Global Security, or by a nominee of the Depositary to the Depositary or another nominee of
the Depositary, or by the Depositary or a nominee of the Depositary to a successor Depositary for
such Global Security selected or approved by the Issuers, or to a nominee of such successor
Depositary.
(c) (i) If at any time the Depositary for a Global Security or Securities notifies the Issuers
that it is unwilling or unable to continue as Depositary for such Global Security or Securities or
if at any time the Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or regulation, the
Issuers shall appoint a successor Depositary with respect to such Global Security or Securities.
If a successor Depositary for such Global Security or Securities is not appointed by the Issuers
within 90 days after the Issuers receive such notice or becomes aware of such ineligibility, the
Issuers shall execute, and the Trustee or its agent, upon receipt of an Issuer Order for the
authentication and delivery of such individual Debt Securities of such series in exchange for such
Global Security or Securities, will authenticate and deliver, individual Debt Securities of such
series of like tenor and terms in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities in exchange for such Global Security or
Securities.
(ii) If an Event of Default occurs and the Depositary for a Global Security or
Securities notifies the Trustee of its decision to require that the Debt Securities of any
series or portion thereof issued or issuable in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities, the Issuers shall
appoint a successor Depositary with respect to such Global Security or Securities. In such
event the Issuers will execute, and the Trustee, upon receipt of an Issuer Order for the
authentication and delivery of individual Debt Securities of such series in exchange in
whole or in part for such Global Security or Securities, will authenticate and deliver
individual Debt Securities of such series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such series or portion thereof
in exchange for such Global Security or Securities.
(iii) If specified by the Issuers pursuant to Sections 2.01 and 2.03 with respect to
Debt Securities issued or issuable in the form of a Global Security, the Depositary for such
Global Security may surrender such Global Security in exchange in whole or in part for
individual Debt Securities of such series of like tenor and terms in definitive form on such
terms as are acceptable to the Issuers, the Trustee and such Depositary. Thereupon the
Issuers shall execute, and the Trustee or its agent upon receipt of an Issuer Order for the
authentication and delivery of definitive Debt Securities of such series shall authenticate
and deliver, without service charge, to each Person specified by such Depositary a new Debt
Security or Securities of the same series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount equal to and in
exchange for such Persons beneficial interest in the Global
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Security; and to such Depositary a new Global Security of like tenor and terms and in
an authorized denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Debt Securities
delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three paragraphs, the
Issuers will execute and the Trustee or its agent will authenticate and deliver individual
Debt Securities. Upon the exchange of the entire principal amount of a Global Security for
individual Debt Securities, such Global Security shall be canceled by the Trustee or its
agent. Except as provided in the preceding paragraph, Debt Securities issued in exchange
for a Global Security pursuant to this Section 2.15 shall be registered in such names and in
such authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall instruct the
Trustee or the Registrar. The Trustee or the Registrar shall deliver such Debt Securities
to the Persons in whose names such Debt Securities are so registered.
(v) Payments in respect of the principal of and interest on any Debt Securities
registered in the name of the Depositary or its nominee will be payable to the Depositary or
such nominee in its capacity as the registered owner of such Global Security. The Issuers,
any Subsidiary Guarantors and the Trustee may treat the Person in whose name the Debt
Securities, including the Global Security, are registered as the owner thereof for the
purpose of receiving such payments and for any and all other purposes whatsoever. None of
the Issuers, any Subsidiary Guarantors, the Trustee, any Registrar, the paying agent or any
agent of the Issuers, any Subsidiary Guarantors or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on account of the
beneficial ownership interests of the Global Security by the Depositary or its nominee or
any of the Depositarys direct or indirect participants, or for maintaining, supervising or
reviewing any records of the Depositary, its nominee or any of its direct or indirect
participants relating to the beneficial ownership interests of the Global Security, the
payments to the beneficial owners of the Global Security of amounts paid to the Depositary
or its nominee, or any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants. None of the Issuers,
any Subsidiary Guarantors, the Trustee or any such agent will be liable for any delay by the
Depositary, its nominee, or any of its direct or indirect participants in identifying the
beneficial owners of the Debt Securities, and the Issuers, any Subsidiary Guarantors and the
Trustee may conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes (including with respect to the registration and
delivery, and the respective principal amounts, of the Debt Securities to be issued).
Section 2.16 Medium Term Securities. Notwithstanding any contrary provision herein,
if all Debt Securities of a series are not to be originally issued at one time, it shall not be
necessary for each of the Issuers to deliver to the Trustee an Officers Certificate, resolutions
of each such Issuers Board of Directors, supplemental Indenture, Opinion of Counsel or written
order or any other document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of authentication of each Debt Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon original issuance of
the
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first such Debt Security of such series to be issued; provided, that any subsequent request by
the Issuers to the Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Issuers that, as of the date of such request,
the statements made in the Officers Certificate delivered pursuant to Section 2.05 or 13.05 shall
be true and correct as if made on such date and that the Opinion of Counsel delivered at or prior
to such time of authentication of an original issuance of Debt Securities shall specifically state
that it shall relate to all subsequent issuances of Debt Securities of such series that are
identical to the Debt Securities issued in the first issuance of Debt Securities of such series.
An Issuer Order delivered by the Issuers to the Trustee in the circumstances set forth in the
preceding paragraph, may provide that Debt Securities which are the subject thereof will be
authenticated and delivered by the Trustee or its agent on original issue from time to time upon
the telephonic or written order of Persons designated in such written order (any such telephonic
instructions to be promptly confirmed in writing by such Person) and that such Persons are
authorized to determine, consistent with the Officers Certificate, supplemental Indenture or
resolution of the Board of Directors relating to such written order, such terms and conditions of
such Debt Securities as are specified in such Officers Certificate, supplemental Indenture or such
resolution.
Section 2.17 Defaulted Interest. Any interest on any Debt Security of a particular
series which is payable, but is not punctually paid or duly provided for, on the dates and in the
manner provided in the Debt Securities of such series and in this Indenture (herein called
Defaulted Interest) shall forthwith cease to be payable to the Holder thereof on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest may be paid by the
Issuers, at their election in each case, as provided in clause (i) or (ii) below:
(i) The Issuers may elect to make payment of any Defaulted Interest to the Persons in
whose names the Debt Securities of such series 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 Issuers shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Debt Security of such series and the
date of the proposed payment, and at the same time the Issuers 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 Issuers of
such special record date and, in the name and at the expense of the Issuers, shall cause
notice of the proposed payment of such Defaulted Interest and the special record date
therefor to be mailed, first class postage pre-paid, to each Holder thereof at its address
as it appears in the Debt 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
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Defaulted Interest shall be paid to the Persons in whose names the Debt Securities of
such series are registered at the close of business on such special record date.
(ii) The Issuers may make payment of any Defaulted Interest on the Debt Securities of
such series in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debt Securities of such series may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the Issuers to the
Trustee of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Section 2.18 CUSIP Numbers. The Issuers in issuing the Debt Securities may use
CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the accuracy of such numbers either as printed on the Debt 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 Debt Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Issuers will promptly notify the
Trustee in writing of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01 Applicability of Article. The provisions of this Article shall be
applicable to the Debt Securities of any series which are redeemable before their Stated Maturity
except as otherwise specified as contemplated by Section 2.03 for Debt Securities of such series.
Section 3.02 Notice of Redemption; Selection of Debt Securities. In case the Issuers
shall desire to exercise the right to redeem all or, as the case may be, any part of the Debt
Securities of any series in accordance with their terms, by resolution of the Board of Directors of
each Issuer or a supplemental Indenture, the Issuers shall fix a date for redemption and shall give
notice of such redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the Holders of Debt Securities of such series so to be redeemed as a whole or in
part, in the manner provided in Section 13.03. The notice if given in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to the Holder of any
Debt Security of a series designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debt Security of such series.
Each such notice of redemption shall specify (i) the date fixed for redemption, (ii) the
redemption price at which Debt Securities of such series are to be redeemed (or the method of
calculating such redemption price), (iii) the Place or Places of Payment that payment will be made
upon presentation and surrender of such Debt Securities, (iv) that any interest accrued to the date
fixed for redemption will be paid as specified in said notice, (v) that the redemption is for a
sinking fund payment (if applicable), (vi) that, unless otherwise specified in such notice, if the
Issuers default in making such redemption payment or if the Debt Securities of that series are
subordinated pursuant to the terms of Article XII, the paying agent is prohibited from making such
payment pursuant to the terms of this Indenture, (vii) that on and after said date any interest
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thereon or on the portions thereof to be redeemed will cease to accrue, (viii) that in the
case of Original Issue Discount Securities original issue discount accrued after the date fixed for
redemption will cease to accrue, (ix) the terms of the Debt Securities of that series pursuant to
which the Debt Securities of that series are being redeemed and (x) that no representation is made
as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on
the Debt Securities of that series. If less than all the Debt Securities of a series are to be
redeemed the notice of redemption shall specify the certificate numbers of any Debt Securities of
that series to be redeemed that are not in global form. In case any Debt Security of a series is
to be redeemed in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Debt Security, a new Debt Security or Debt Securities of that series in principal
amount equal to the unredeemed portion thereof, will be issued.
At least five days before the giving of any notice of redemption, unless the Trustee consents
to a shorter period, the Issuers shall give written notice to the Trustee of the Redemption Date,
the principal amount of Debt Securities to be redeemed and the series and terms of the Debt
Securities pursuant to which such redemption will occur. Such notice shall be accompanied by an
Officers Certificate and an Opinion of Counsel from the Issuers to the effect that such redemption
will comply with the conditions herein, and such notice may be revoked at any time prior to the
giving of a notice of redemption to the Holders pursuant to this Section 3.02. If fewer than all
the Debt Securities of a series are to be redeemed, the record date relating to such redemption
shall be selected by the Issuers and given in writing to the Trustee, which record date shall be
not less than three days after the date of notice to the Trustee.
By 11 a.m., New York City time, on the Redemption Date for any Debt Securities, the Issuers
shall deposit with the Trustee or with a paying agent (or, if an Issuer is acting as its own paying
agent, segregate and hold in trust) an amount of money in Dollars (except as provided pursuant to
Section 2.03) sufficient to pay the redemption price of such Debt Securities or any portions
thereof that are to be redeemed on that date, together with any interest accrued to the Redemption
Date.
If less than all the Debt Securities of like tenor and terms of a series are to be redeemed
(other than pursuant to mandatory sinking fund redemptions), the Trustee shall select, on a pro
rata basis, by lot or by such other method as in its sole discretion it shall deem appropriate and
fair, the Debt Securities of that series or portions thereof (in multiples of $1,000) to be
redeemed. In any case where more than one Debt Security of such series is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so registered as if it
were represented by one Debt Security of such series. The Trustee shall promptly notify the
Issuers in writing of the Debt Securities selected for redemption and, in the case of any Debt
Securities selected for partial redemption, the principal amount thereof to be redeemed. If any
Debt Security called for redemption shall not be so paid upon surrender thereof on such Redemption
Date, the principal, premium, if any, and interest shall bear interest until paid from the
Redemption Date at the rate borne by the Debt Securities of that series. If less than all the Debt
Securities of unlike tenor and terms of a series are to be redeemed, the particular Debt Securities
to be redeemed shall be selected by the Issuers. Provisions of this Indenture that apply to Debt
Securities called for redemption also apply to portions of Debt Securities called for redemption.
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Section 3.03 Payment of Debt Securities Called for Redemption. If notice of
redemption has been given as provided in Section 3.02, the Debt Securities or portions of Debt
Securities of the series with respect to which such notice has been given shall become due and
payable on the date and at the Place or Places of Payment stated in such notice at the applicable
redemption price, together with any interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuers shall default in the payment of such Debt Securities at the
applicable redemption price, together with any interest accrued to said date) any interest on the
Debt Securities or portions of Debt Securities of any series so called for redemption shall cease
to accrue, and any original issue discount in the case of Original Issue Discount Securities shall
cease to accrue. On presentation and surrender of such Debt Securities at the Place or Places of
Payment in said notice specified, the said Debt Securities or the specified portions thereof shall
be paid and redeemed by the Issuers at the applicable redemption price, together with any interest
accrued thereon to the date fixed for redemption.
Any Debt Security that is to be redeemed only in part shall be surrendered at the Place of
Payment with, if the Issuers, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Issuers, the Registrar and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in writing, and the Issuers
shall execute, and the Trustee shall authenticate and deliver to the Holder of such Debt Security
without service charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Debt Security so
surrendered; except that if a Global Security is so surrendered, the Issuers shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global Security, without service
charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered. In the case of a Debt Security providing
appropriate space for such notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a notation on such Debt
Security of the payment of the redeemed portion thereof.
Section 3.04 Mandatory and Optional Sinking Funds. The minimum amount of any sinking
fund payment provided for by the terms of Debt Securities of any series, resolution of the Board of
Directors or a supplemental Indenture is herein referred to as a mandatory sinking fund payment,
and any payment in excess of such minimum amount provided for by the terms of Debt Securities of
any series, resolution of the Board of Directors or a supplemental Indenture is herein referred to
as an optional sinking fund payment.
In lieu of making all or any part of any mandatory sinking fund payment with respect to any
Debt Securities of a series in cash, the Issuers may at their option (a) deliver to the Trustee
Debt Securities of that series theretofore purchased or otherwise acquired by the Issuers or (b)
receive credit for the principal amount of Debt Securities of that series which have been redeemed
either at the election of the Issuers pursuant to the terms of such Debt Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of such Debt
Securities, resolution or supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Debt Securities, resolution
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or supplemental Indenture for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly.
Section 3.05 Redemption of Debt Securities for Sinking Fund. Not less than 60 days
prior to each sinking fund payment date for any series of Debt Securities, the Issuers will deliver
to the Trustee an Officers Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, any resolution or supplemental
Indenture, the portion thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Debt Securities of that
series pursuant to this Section 3.05 (which Debt Securities, if not previously redeemed, will
accompany such certificate) and whether the Issuers intend to exercise its right to make any
permitted optional sinking fund payment with respect to such series. Such certificate shall also
state that no Event of Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Issuers shall be obligated to make the
cash payment or payments therein referred to, if any, by 11 a.m., New York City time, on the next
succeeding sinking fund payment date. Failure of the Issuers to deliver such certificate (or to
deliver the Debt Securities specified in this paragraph) shall not constitute a Default, but such
failure shall require that the sinking fund payment due on the next succeeding sinking fund payment
date for that series shall be paid entirely in cash and shall be sufficient to redeem the principal
amount of such Debt Securities subject to a mandatory sinking fund payment without the option to
deliver or credit Debt Securities as provided in this Section 3.05 and without the right to make
any optional sinking fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused
balance of any preceding sinking fund payments made in cash which shall equal or exceed $100,000
(or a lesser sum if the Issuers shall so request) with respect to the Debt Securities of any
particular series shall be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment date, on the sinking
fund payment date following the date of such payment) to the redemption of such Debt Securities at
the redemption price specified in such Debt Securities, resolution or supplemental Indenture for
operation of the sinking fund together with any accrued interest to the date fixed for redemption.
Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Debt
Securities shall be added to the next cash sinking fund payment received by the Trustee for such
series and, together with such payment, shall be applied in accordance with the provisions of this
Section 3.05. Any and all sinking fund moneys with respect to the Debt Securities of any
particular series held by the Trustee on the last sinking fund payment date with respect to Debt
Securities of such series and not held for the payment or redemption of particular Debt Securities
shall be applied by the Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the Debt Securities of that series
at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such sinking fund payment
date in the manner specified in the last paragraph of Section 3.02 and the Issuers shall cause
notice of the redemption thereof to be given in the manner provided in Section 3.02 except that the
notice of redemption shall also state that the Debt Securities are being redeemed by operation of
the sinking fund. Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Section 3.03.
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The Trustee shall not redeem any Debt Securities of a series with sinking fund moneys or mail
any notice of redemption of such Debt Securities by operation of the sinking fund for such series
during the continuance of a Default in payment of interest on such Debt Securities or of any Event
of Default (other than an Event of Default occurring as a consequence of this paragraph) with
respect to such Debt Securities, except that if the notice of redemption of any such Debt
Securities shall theretofore have been mailed in accordance with the provisions hereof, the Trustee
shall redeem such Debt Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any such Default or Event of
Default shall occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such Default or Event of Default, be held as security for the payment of such Debt
Securities; provided, however, that in case such Default or Event of Default shall have been cured
or waived as provided herein, such moneys shall thereafter be applied on the next sinking fund
payment date for such Debt Securities on which such moneys may be applied pursuant to the
provisions of this Section 3.05.
ARTICLE IV
PARTICULAR COVENANTS OF THE ISSUERS
Section 4.01 Payment of Principal of, and Premium, If Any, and Interest on, Debt
Securities. The Issuers, for the benefit of each series of Debt Securities, will duly and
punctually pay or cause to be paid the principal of, and premium, if any, and interest on, each of
the Debt Securities at the place, at the respective times and in the manner provided herein or in
the Debt Securities. Each installment of interest on any Debt Securities not in global form may at
the Issuers option be paid by mailing checks for such interest payable to the Person entitled
thereto pursuant to Section 2.07(a) to the address of such Person as it appears on the Debt
Security Register.
Principal of and premium and interest on Debt Securities of any series shall be considered
paid on the date due if, by 11 a.m., New York City time, on such date the Trustee or any paying
agent holds in accordance with this Indenture money sufficient to pay all principal, premium and
interest then due and, in the case of Debt Securities subordinated pursuant to the terms of Article
XII, the Trustee or such paying agent, as the case may be, is not prohibited from paying such money
to the Holders on that date pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal or premium, if any, at the rate specified
therefor in the Debt Securities, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
Section 4.02 Maintenance of Offices or Agencies for Registration of Transfer, Exchange and
Payment of Debt Securities. The Issuers will maintain in each Place of Payment for any series
of Debt Securities an office or agency where Debt Securities of such series may be presented or
surrendered for payment, and it shall also maintain (in or outside such Place of Payment) an office
or agency where Debt Securities of such series may be surrendered for transfer or exchange and
where notices and demands to or upon the Issuers in respect of the Debt Securities of such series
and this Indenture may be served. The Issuers will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If
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at any time the Issuers 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 office of the Trustee where its corporate trust business is
principally administered in the United States, and the Issuers hereby appoint the Trustee as their
agent to receive all presentations, surrenders, notices and demands.
The Issuers may also from time to time designate different or additional offices or agencies
to be maintained for such purposes (in or outside of such Place of Payment), and may from time to
time rescind any such designation; provided, however, that no such designation or rescission shall
in any manner relieve the Issuers of their obligations described in the preceding paragraph. The
Issuers will give prompt written notice to the Trustee of any such additional designation or
rescission of designation and any change in the location of any such different or additional office
or agency.
Section 4.03 Appointment to Fill a Vacancy in the Office of Trustee. The Issuers,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner
provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder with
respect to each series of Debt Securities.
Section 4.04 Duties of Paying Agents, etc.
(a) The Issuers shall cause each paying agent, if any, other than the Trustee, to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such agent for the payment of the
principal of, and premium, if any, or interest on, the Debt Securities of any series
(whether such sums have been paid to it by the Issuers or by any other obligor on the Debt
Securities of such series) in trust for the benefit of the Holders of the Debt Securities of
such series;
(ii) that it will give the Trustee notice of any failure by the Issuers (or by any
other obligor on the Debt Securities of such series) to make any payment of the principal
of, and premium, if any, or interest on, the Debt Securities of such series when the same
shall be due and payable; and
(iii) that it will at any time during the continuance of an Event of Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held by it as such
agent.
(b) If either of the Issuers shall act as its own paying agent, it will, on or before each due
date of the principal of, and premium, if any, or interest on, the Debt Securities of any series,
set aside, segregate and hold in trust for the benefit of the Holders of the Debt Securities of
such series a sum sufficient to pay such principal, premium, if any, or interest so becoming due.
The Issuers will promptly notify the Trustee of any failure by either of the Issuers to take such
action or the failure by any other obligor on such Debt Securities to make any payment of the
principal of, and premium, if any, or interest on, such Debt Securities when the same shall be due
and payable.
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(c) Anything in this Section 4.04 to the contrary notwithstanding, either of the Issuers may,
at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Issuer or such paying agent.
(d) Whenever the Issuers shall have one or more paying agents with respect to any series of
Debt Securities, they will, prior to each due date of the principal of, and premium, if any, or
interest on, any Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such paying agent is the Trustee)
the Issuers will promptly notify the Trustee of its action or failure so to act.
(e) Anything in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums
in trust as provided in this Section 4.04 is subject to the provisions of Section 11.05.
Section 4.05 SEC Reports; Financial Statements.
(a) The Partnership shall, so long as any of the Debt Securities are Outstanding, file with
the Trustee, within 30 days after it files the same with the SEC, copies of the annual reports and
the information, documents and other reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) that the Partnership is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Partnership is not subject to the
requirements of such Section 13 or 15(d), the Partnership shall file with the Trustee, within 30
days after it would have been required to file the same with the SEC, financial statements,
including any notes thereto (and with respect to annual reports, an auditors report by a firm of
established national reputation), and a Managements Discussion and Analysis of Financial
Condition and Results of Operations, both comparable to that which the Partnership would have been
required to include in such annual reports, information, documents or other reports if the
Partnership had been subject to the requirements of such Section 13 or 15 (d). The Issuers shall
also comply with the provisions of TIA Section 314 (a).
(b) The Partnership shall provide the Trustee with a sufficient number of copies of all
reports and other documents and information that the Trustee may be required to deliver to Holders
under this Section.
(c) The Partnership shall, so long as any of the Notes are Outstanding, deliver to the
Trustee, within 30 days of any Officer of the Partnership becoming aware of the occurrence of any
Event of Default, an Officers Certificate specifying such Event of Default and what action the
Partnership is taking or proposes to take with respect thereto.
Section 4.06 Compliance Certificate.
(a) Each of the Issuers and any Subsidiary Guarantor shall, so long as any of the Debt
Securities are Outstanding, deliver to the Trustee, within 120 days after the end of each fiscal
year of the Partnership, an Officers Certificate stating that a review of the activities of the
Partnership and its Subsidiaries during the preceding fiscal year has been made under the
supervision of the Officers signing the certificate with a view to determining whether each of the
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Issuers and any Subsidiary Guarantor has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge each of the Issuers and any Subsidiary Guarantor has
kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is
not in default in the performance or observance of any of the terms, provisions and conditions
hereof, without regard to any grace period or requirement of notice required by this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such Defaults or Events of
Default of which such Officer may have knowledge and what action the Issuers or any Subsidiary
Guarantor is taking or proposes to take with respect thereto) and that to the best of his knowledge
no event has occurred and remains in existence by reason of which payments on account of the
principal of, or premium, if any, or interest, if any, on the Debt Securities are prohibited or, if
such event has occurred, a description of the event and what action the Partnership or any
Subsidiary Guarantor is taking or proposes to take with respect thereto.
(b) The Partnership shall, so long as any of the Debt Securities are Outstanding, deliver to
the Trustee within 30 days after the occurrence of any Default or Event of Default under this
Indenture, an Officers Certificate specifying such Default or Event of Default, the status thereof
and what action the Partnership is taking or proposes to take with respect thereto.
Section 4.07 Further Instruments and Acts. The Partnership will, upon request of the
Trustee, execute and deliver such further instruments and do such further acts as may reasonably be
necessary or proper to carry out more effectually the purposes of this Indenture.
Section 4.08 Existence. Except as permitted by Article X hereof, the Partnership
shall do or cause to be done all things necessary to preserve and keep in full force and effect its
existence and all rights (charter and statutory) and franchises of the Partnership, provided that
the Partnership shall not be required to preserve any such right or franchise, if its Board of
Directors shall determine that the preservation thereof is no longer desirable in the conduct of
the business of the Partnership.
Section 4.09 Maintenance of Properties. The Partnership shall cause all properties
owned by the Partnership or any of its Subsidiaries or used or held for use in the conduct of its
business or the business of any such Subsidiary to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all necessary equipment and
will cause to be made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Partnership may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all times; provided that
nothing in this Section shall prevent the Partnership from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment of the
Partnership, desirable in the conduct of its business or the business of any such Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 4.10 Payment of Taxes and Other Claims. The Partnership shall pay or
discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon the Partnership or any of its
Subsidiaries or upon the income, profits or property of the Partnership or any of its Subsidiaries,
and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might
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by law become a Lien upon the property of the Partnership or any of its Subsidiaries; provided
that the Partnership shall not be required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Section 4.11 Waiver of Certain Covenants. The Issuers and the Subsidiary Guarantors
may, with respect to the Debt Securities of any series, omit in any particular instance to comply
with any covenant set forth in this Article IV (except Sections 4.01 through 4.08) or made
applicable to such Debt Securities pursuant to Section 2.03, if, before or after the time for such
compliance, the Holders of at least a majority in principal amount of the Outstanding Debt
Securities of each series affected, waive such compliance in such instance with such covenant, but
no such waiver shall extend to or affect such covenant except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Issuers and the Subsidiary
Guarantors and the duties of the Trustee in respect of any such covenant shall remain in full force
and effect.
ARTICLE V
HOLDERS LISTS AND REPORTS BY THE TRUSTEE
Section 5.01 Issuers to Furnish Trustee Information as to Names and Addresses of Holders;
Preservation of Information. The Issuers covenant and agree that they will furnish or cause to
be furnished to the Trustee with respect to the Debt Securities of each series:
(a) not more than 10 days after each record date with respect to the payment of interest, if
any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the
Holders as of such record date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Issuers of any such request, a list of similar form and contents as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such lists shall not be
required to be furnished.
The Trustee shall preserve, in as current a form as is reasonably practicable, all information
as to the names and addresses of the Holders (i) contained in the most recent list furnished to it
as provided in this Section 5.01 or (ii) received by it in the capacity of paying agent or
Registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it as provided in this Section 5.01 upon receipt
of a new list so furnished.
Section 5.02 Communications to Holders. Holders may communicate pursuant to Section
312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Debt
Securities. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the TIA.
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Section 5.03 Reports by Trustee. Within 60 days after each January 31, beginning with
the first January 31 following the date of this Indenture, and in any event on or before April 1 in
each year, the Trustee shall mail to Holders a brief report dated as of such January 31 that
complies with TIA Section 313 (a); provided, however, that if no event described in TIA Section 313
(a) has occurred within the twelve months preceding the reporting date, no report need be
transmitted. The Trustee also shall comply with TIA Section 313 (b).
Reports pursuant to this Section 5.03 shall be transmitted by mail:
(a) to all Holders, as the names and addresses of such Holders appear in the Debt Security
Register; and
(b) except in the cases of reports under Section 313(b)(2) of the TIA, to each Holder of a
Debt Security of any series whose name and address appear in the information preserved at the time
by the Trustee in accordance with Section 5.01.
A copy of each report at the time of its mailing to Holders shall be filed with the Securities
and Exchange Commission and each stock exchange (if any) on which the Debt Securities of any series
are listed. The Issuers agree to notify promptly the Trustee whenever the Debt Securities of any
series become listed on any stock exchange and of any delisting thereof.
Section 5.04 Record Dates for Action by Holders. If the Issuers shall solicit from
the Holders of Debt Securities of any series any action (including the making of any demand or
request, the giving of any direction, notice, consent or waiver or the taking of any other action),
the Issuers may, at their option, by resolution of their respective Boards of Directors, fix in
advance a record date for the determination of Holders of Debt Securities entitled to take such
action, but the Issuers shall have no obligation to do so. Any such record date shall be fixed at
the Issuers discretion. If such a record date is fixed, such action may be sought or given before
or after the record date, but only the Holders of Debt Securities of record at the close of
business on such record date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of such series
Outstanding have authorized or agreed or consented to such action, and for that purpose the Debt
Securities of such series Outstanding shall be computed as of such record date.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01 Events of Default. If any one or more of the following shall have
occurred and be continuing with respect to Debt Securities of any series (each of the following, an
Event of Default):
(a) default in the payment of any installment of interest upon any Debt Securities of that
series as and when the same shall become due and payable, whether or not such payment shall be
prohibited by Article XII, if applicable, and continuance of such default for a period of 30 days;
or
(b) default in the payment of the principal of or premium, if any, on any Debt Securities of
that series as and when the same shall become due and payable, whether at Stated
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Maturity, upon redemption, by declaration, upon required repurchase or otherwise, whether or
not such payment shall be prohibited by Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with respect to any Debt Securities of
that series as and when the same shall become due and payable; or
(d) failure on the part of the Issuers, or if any series of Debt Securities Outstanding under
this Indenture is entitled to the benefits of the Guarantee, any of the Subsidiary Guarantors, duly
to observe or perform any other of the covenants or agreements on the part of the Issuers, or if
applicable, any of the Subsidiary Guarantors, in the Debt Securities of that series, in any
resolution of the Board of Directors authorizing the issuance of that series of Debt Securities, in
this Indenture with respect to such series or in any supplemental Indenture with respect to such
series (other than a covenant a default in the performance of which is elsewhere in this Section
specifically dealt with), continuing for a period of 60 days after the date on which written notice
specifying such failure and requiring the Issuers, or if applicable, the Subsidiary Guarantors, to
remedy the same shall have been given to the Issuers, or if applicable, the Subsidiary Guarantors,
by the Trustee or to the Issuers, or if applicable, the Subsidiary Guarantors, and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Debt Securities of that series at
the time Outstanding; or
(e) either of the Issuers, or if any series of Debt Securities Outstanding under this
Indenture is entitled to the benefits of the Guarantee, any of the Subsidiary Guarantors, pursuant
to or within the meaning of any Bankruptcy Law,
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or substantially all
of its property; or
(iv) makes a general assignment for the benefit of its creditors;
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against either of the Issuers, or if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the
Subsidiary Guarantors, as debtor in an involuntary case,
(ii) appoints a Custodian of either of the Issuers, or if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the
Subsidiary Guarantors, or a Custodian for all or substantially all of the property of either
of the Issuers, or if applicable, any of the Subsidiary Guarantors, or
(iii) orders the liquidation of either of the Issuers, or if any series of Debt
Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee,
any of the Subsidiary Guarantors,
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and the order or decree remains unstayed and in effect for 60 days;
(g) if any series of Debt Securities Outstanding under this Indenture is entitled to the
benefits of the Guarantee, the Guarantee of any of the Subsidiary Guarantors ceases to be in full
force and effect with respect to Debt Securities of that series (except as otherwise provided in
this Indenture) or is declared null and void in a judicial proceeding or any of the Subsidiary
Guarantors denies or disaffirms its obligations under this Indenture or such Guarantee; or
(h) any other Event of Default provided with respect to Debt Securities of that series;
then and in each and every case that an Event of Default described in clause (a), (b), (c), (d),
(g), or (h) with respect to Debt Securities of that series at the time Outstanding occurs and is
continuing, unless the principal of, premium, if any, and accrued and unpaid interest on all the
Debt Securities of that series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Debt Securities of that series
then Outstanding hereunder, by notice in writing to the Issuers (and to the Trustee if given by
Holders), may declare the principal of (or, if the Debt Securities of that series are Original
Issue Discount Debt Securities, such portion of the principal amount as may be specified in the
terms of that series), premium, if any, and interest on all the Debt Securities of that series to
be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Debt Securities of that series
contained to the contrary notwithstanding. If an Event of Default described in clause (e) or (f)
occurs with respect to either of the Issuers, then and in each and every such case, unless the
principal of and accrued and unpaid interest on all the Debt Securities shall have become due and
payable, the principal of (or, if the Debt Securities of that series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in the terms thereof),
premium, if any, and interest on all the Debt Securities then Outstanding hereunder shall ipso
facto become and be immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders, anything in this Indenture or in the Debt Securities contained to the
contrary notwithstanding.
The Holders of a majority in aggregate principal amount of the Debt Securities of a particular
series by written notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction
already rendered and if all existing Events of Default with respect to that series have been cured
or waived except nonpayment of principal, premium, if any, or interest that has become due solely
because of acceleration. Upon any such rescission, the parties hereto shall be restored
respectively to their several positions and rights hereunder, and all rights, remedies and powers
of the parties hereto shall continue as though no such proceeding had been taken.
Section 6.02 Collection of Debt by Trustee, etc. If an Event of Default occurs and is
continuing, the Trustee, in its own name and as trustee of an express trust, shall be entitled and
empowered to institute any action or proceedings at law or in equity for the collection of the sums
so due and unpaid or enforce the performance of any provision of the Debt Securities of the
affected series or this Indenture, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against any of the Subsidiary
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Guarantors or the Issuers or any other obligor upon the Debt Securities of such series (and
collect in the manner provided by law out of the property of any of the Subsidiary Guarantors or
the Issuers or any other obligor upon the Debt Securities of such series wherever situated the
moneys adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for the reorganization of any
of the Subsidiary Guarantors or the Issuers or any other obligor upon the Debt Securities of any
series under any Bankruptcy Law, or in case a Custodian shall have been appointed for its property,
or in case of any other similar judicial proceedings relative to any of the Subsidiary Guarantors
or the Issuers or any other obligor upon the Debt Securities of any series, its creditors or its
property, the Trustee, irrespective of whether the principal of Debt Securities of any series shall
then be due and payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02,
shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal, premium, if any, and interest (or, if
the Debt Securities of such series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and unpaid in respect of
the Debt Securities of such series, and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith) and of the Holders thereof allowed in any such judicial proceedings
relative to any of the Subsidiary Guarantors or the Issuers, or any other obligor upon the Debt
Securities of such series, its creditors or its property, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of such Holders and of the Trustee on their behalf, and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by each of such Holders to
make payments to the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a
result of its negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or under any of the Debt
Securities of any series, may be enforced by the Trustee without the possession of any such Debt
Securities, or the production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment (except for any amounts payable to the Trustee
pursuant to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt
Securities in respect of which such action was taken.
In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
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granted in this Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
Section 6.03 Application of Moneys Collected by Trustee. Any moneys or other property
collected by the Trustee pursuant to Section 6.02 with respect to Debt Securities of any series
shall be applied, after giving effect to the provisions of Article XII, if applicable, in the order
following, at the date or dates fixed by the Trustee for the distribution of such moneys or other
property, upon presentation of the several Debt Securities of such series in respect of which
moneys or other property have been collected, and the notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant to Section 7.06;
SECOND: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall not have become due, to the payment of interest on the Debt
Securities of such series in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate or Yield to Maturity (in the case of Original Issue Discount
Debt Securities) borne by the Debt Securities of such series, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall have become due, by declaration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Debt Securities of such series for principal and
premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to
the extent that such interest has been collected by the Trustee) upon overdue installments of
interest at the rate or Yield to Maturity (in the case of Original Issue Discount Debt Securities)
borne by the Debt Securities of such series; and, in case such moneys shall be insufficient to pay
in full the whole amount so due and unpaid upon the Debt Securities of such series, then to the
payment of such principal and premium, if any, and interest, without preference or priority of
principal and premium, if any, over interest, or of interest over principal and premium, if any, or
of any installment of interest over any other installment of interest, or of any Debt Security of
such series over any Debt Security of such series, ratably to the aggregate of such principal and
premium, if any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Subsidiary Guarantors or the Issuers, as
applicable, or to whomsoever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.03. At least 15 days before such record date, the Issuers shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and amount to be paid.
Section 6.04 Limitation on Suits by Holders. No Holder of any Debt Security of any
series shall have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or otherwise, upon or under
or with
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respect to this Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of
an Event of Default with respect to Debt Securities of that same series and of the continuance
thereof and unless the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request upon the Trustee to
institute such action or proceedings in respect of such Event of Default in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity or security as it may
require against the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of indemnity or security
shall have failed to institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section 6.06; it being
understood and intended, and being expressly covenanted by the Holder of every Debt Security with
every other Holder and the Trustee, that no one or more Holders shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any Holders, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all such Holders. For the protection and
enforcement of the provisions of this Section 6.04, each and every Holder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision in this Indenture, however, the right of any Holder of any
Debt Security to receive payment of the principal of, and premium, if any, and (subject to Section
2.12) interest on, such Debt Security, on or after the respective due dates expressed in such Debt
Security, and to institute suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of
Default. All powers and remedies given by this Article VI to the Trustee or to the Holders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and agreements contained in
this Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or
power accruing upon any Default occurring and continuing as aforesaid, shall impair any such right
or power, or shall be construed to be a waiver of any such Default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy given by this Article VI or by
law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Holders.
Section 6.06 Rights of Holders of Majority in Principal Amount of Debt Securities to
Direct Trustee and to Waive Default. The Holders of not less than a majority in aggregate
principal amount of the Debt Securities of any series at the time Outstanding shall have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or of exercising any right, trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that such direction shall not be otherwise than
in accordance with law and the provisions of this Indenture, and that subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such direction if the
Trustee being advised by counsel shall determine that the action so directed may not
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lawfully be taken or is inconsistent with any provision of this Indenture, or if the Trustee
shall by a responsible officer or officers determine that the action so directed would involve it
in personal liability or would be unduly prejudicial to Holders of Debt Securities of such series
not taking part in such direction; and provided, further, however, that nothing in this Indenture
contained shall impair the right of the Trustee to take any action deemed proper by the Trustee and
which is not inconsistent with such direction by such Holders. The Holders of not less than a
majority in aggregate principal amount of the Debt Securities of any series at the time Outstanding
may on behalf of the Holders of all the Debt Securities of that series waive any past Default or
Event of Default and its consequences for that series, except a Default or Event of Default in the
payment of the principal of, and premium, if any, or interest on, any of the Debt Securities and a
Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected thereby. In case of any such waiver, such Default
shall cease to exist, any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture, and the Subsidiary Guarantors, the Issuers, the Trustee and the
Holders of the Debt Securities of that series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
Section 6.07 Trustee to Give Notice of Events of Defaults Known to It, but May Withhold
Such Notice in Certain Circumstances. The Trustee shall, within 90 days after the occurrence
of an Event of Default, or if later, within 30 days after the Trustee obtains actual knowledge of
the Event of Default, with respect to a series of Debt Securities give to the Holders thereof, in
the manner provided in Section 13.03, notice of all Events of Default with respect to such series
known to the Trustee, unless such Events of Default shall have been cured or waived before the
giving of such notice; provided, that, except in the case of an Event of Default in the payment of
the principal of, or premium, if any, or interest on, any of the Debt Securities of such series or
in the making of any sinking fund payment with respect to the Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the board of directors, the
executive committee or a committee of directors or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the Holders thereof.
Section 6.08 Requirement of an Undertaking to Pay Costs in Certain Suits under the
Indenture or Against the Trustee. All parties to this Indenture agree, and each Holder of any
Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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 or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit in the manner and to
the extent provided in the TIA, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 6.08 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate more than 25 percent
in principal amount of the Outstanding Debt Securities of that series or to any suit instituted by
any Holder for the enforcement of the payment of the principal of, or premium, if any, or interest
on, any Debt Security on or after the due date for such payment expressed in such Debt Security.
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ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, its own bad faith or its own willful
misconduct, except that:
(a) this paragraph shall not be construed to limit the effect of the first paragraph of this
Section 7.01;
(b) prior to the occurrence of an Event of Default with respect to the Debt Securities of a
series and after the curing or waiving of all Events of Default with respect to such series which
may have occurred:
(i) the duties and obligations of the Trustee with respect to Debt Securities of any
series shall be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and obligations with
respect to such series as are specifically set forth in this Indenture, and no implied
covenants or obligations with respect to such series shall be read into this Indenture
against the Trustee;
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee and 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; but the Trustee shall examine the evidence furnished
to it pursuant to Sections 4.05 and 4.06 to determine whether or not such evidence conforms
to the requirement of this Indenture;
(iii) the Trustee shall not be liable for an 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; and
(iv) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it with respect to Debt Securities of any series in good faith in accordance with
the direction of the Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of that series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any
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trust or power conferred upon the Trustee, under this Indenture with respect to Debt
Securities of such series.
None of the provisions of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any personal financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.
Section 7.02 Certain Rights of Trustee. Except as otherwise provided in Section 7.01:
(a) the Trustee may rely 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 or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of either of the Issuers mentioned herein shall be
sufficiently; evidenced by an Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors of an Issuer may be
evidenced to the Trustee by a copy thereof certified by its Secretary or an Assistant Secretary;
(c) the Trustee may consult with counsel, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders of Debt Securities of
any series pursuant to the provisions of this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, 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, approval or other paper or document, unless requested
in writing to do so by the Holders of a majority in aggregate principal amount of the then
Outstanding Debt Securities of a series affected by such matter; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be
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incurred by it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding, and the reasonable expense of every such investigation shall be paid by
the Issuers or, if paid by the Trustee, shall be repaid by the Issuers upon demand;
(g) 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 by it
with due care hereunder; and
(h) if any property other than cash shall at any time be subject to a Lien in favor of the
Holders, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of
competent jurisdiction or by the supplemental instrument subjecting such property to such Lien,
shall be entitled to make advances for the purpose of preserving such property or of discharging
tax Liens or other prior Liens or encumbrances thereon.
Section 7.03 Trustee Not Liable for Recitals in Indenture or in Debt Securities. The
recitals contained herein, in the Debt Securities (except the Trustees certificate of
authentication) shall be taken as the statements of the Issuers, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities of any series, except that the
Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate
the Debt Securities and perform its obligations hereunder, and that the statements made by it or to
be made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Issuers
are true and accurate. The Trustee shall not be accountable for the use or application by the
Issuers of any of the Debt Securities or of the proceeds thereof.
Section 7.04 Trustee, Paying Agent or Registrar May Own Debt Securities. The Trustee
or any paying agent or Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debt Securities and subject to the provisions of the TIA relating to conflicts of
interest and preferential claims may otherwise deal with the Issuers with the same rights it would
have if it were not Trustee, paying agent or Registrar.
Section 7.05 Moneys Received by Trustee to Be Held in Trust. Subject to the
provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received, but 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 moneys received by it hereunder. So long as no Event of Default
shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from
time to time to the Issuers upon an Issuer Order.
Section 7.06 Compensation and Reimbursement. The Issuers covenant and agree to pay in
Dollars to the Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust), and, except as otherwise
expressly provided herein, the Issuers will pay or reimburse in Dollars the Trustee
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upon its request for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents, attorneys and counsel and of all
Persons not regularly in its employ), including without limitation, Section 6.02, except any such
expense, disbursement or advances as may arise from its negligence, willful misconduct or bad
faith. The Issuers also covenant to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, willful misconduct or bad
faith on the part of the Trustee, arising out of or in connection with the acceptance or
administration of this trust or trusts hereunder, including the reasonable costs and expenses of
defending itself against any claim of liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligations of the Issuers under this Section 7.06 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional Debt hereunder and shall survive the
satisfaction and discharge of this Indenture. The Issuers and the Holders agree that such
additional Debt shall be secured by a Lien prior to that of the Debt Securities upon all property
and funds held or collected by the Trustee, as such, except funds held in trust for the payment of
principal of, and premium, if any, or interest on, particular Debt Securities.
When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(e) or (f) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
Section 7.07 Right of Trustee to Rely on an Officers Certificate Where No Other Evidence
Specifically Prescribed. Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
Section 7.08 Separate Trustee; Replacement of Trustee. The Issuers may, but need not,
appoint a separate Trustee for any one or more series of Debt Securities. The Trustee may resign
with respect to one or more or all series of Debt Securities at any time by giving notice to the
Issuers. The Holders of a majority in principal amount of the Debt Securities of a particular
series may remove the Trustee for such series and only such series by so notifying the Trustee and
may appoint a successor Trustee. The Issuers shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a Custodian takes charge of the Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal
amount of the Debt Securities of a particular series and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly
appoint a successor Trustee. No resignation or removal of the Trustee and no appointment of a
successor Trustee shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of Debt Securities of each applicable series. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in
Section 7.06.
If a successor Trustee does not take office within 60 days after the retiring Trustee gives
notice of resignation or is removed, the retiring Trustee or the Holders of 25% in principal amount
of the Debt Securities of any applicable series may petition any court of competent jurisdiction
for the appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt Securities of any
applicable series may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers
obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor Trustee with respect to
the Debt Securities of one or more series, the Issuers, any retiring Trustee and each successor or
separate Trustee with respect to the Debt Securities of any applicable series shall execute and
deliver an Indenture supplemental hereto (i) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Debt Securities of any series as to which any such retiring Trustee is
not retiring shall continue to be vested in such retiring Trustee and (ii) that shall add to or
change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental Indenture shall constitute such Trustees co-trustees of the
same trust and that each such separate, retiring or successor Trustee shall be Trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other
such Trustee.
Section 7.09 Successor Trustee by Merger. If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Trustee.
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In case at the time such successor or successors to the Trustee by merger, conversion,
consolidation or transfer shall succeed to the trusts created by this Indenture any of the Debt
Securities shall have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities shall not have
been authenticated, any successor to the Trustee may authenticate such Debt Securities either in
the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all
such cases such certificates shall have the full force which it is anywhere in the Debt Securities
or in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual report of
condition. No obligor upon the Debt Securities of a particular series or Person directly or
indirectly controlling, controlled by or under common control with such obligor shall serve as
Trustee for the Debt Securities of such series. The Trustee shall comply with Section 310(b) of
the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of
the TIA this Indenture or any indenture or indentures under which other securities or certificates
of interest or participation in other securities of the Issuers are outstanding if the requirements
for such exclusion set forth in Section 310(b)(1) of the TIA are met.
Section 7.11 Preferential Collection of Claims Against Issuers. The Trustee shall
comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b)
of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the
TIA to the extent indicated therein.
Section 7.12 Compliance with Tax Laws. The Trustee hereby agrees to comply with all
U.S. Federal income tax information reporting and withholding requirements applicable to it with
respect to payments of premium (if any) and interest on the Debt Securities, whether acting as
Trustee, Registrar, paying agent or otherwise with respect to the Debt Securities.
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01 Evidence of Action by Holders. Whenever in this Indenture it is provided
that the Holders of a specified percentage in aggregate principal amount of the Debt Securities of
any or all series may take action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the Holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders
in Person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in accordance with the provisions of
Section 5.02, (c) by a combination of such instrument or instruments and any such record of such a
meeting of Holders or (d) in the case of Debt Securities evidenced by a Global Security, by any
electronic transmission or other message, whether or not in written format, that complies with the
Depositarys applicable procedures.
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Section 8.02 Proof of Execution of Instruments and of Holding of Debt Securities.
Subject to the provisions of Sections 7.01, 7.02 and 13.09, proof of the execution of any
instrument by a Holder or his agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Debt Securities of any series shall be proved by the
Debt Security Register or by a certificate of the Registrar for such series. The Trustee may
require such additional proof of any matter referred to in this Section 8.02 as it shall deem
necessary.
Section 8.03 Who May Be Deemed Owner of Debt Securities. Prior to due presentment for
registration of transfer of any Debt Security, the Issuers, the Subsidiary Guarantors, the Trustee,
any paying agent and any Registrar may deem and treat the Person in whose name any Debt Security
shall be registered upon the books of the Issuers as the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on account of the principal of
and premium, if any, and (subject to Section 2.12) interest on such Debt Security and for all other
purposes, and none of the Issuers, the Subsidiary Guarantors or the Trustee nor any paying agent
nor any Registrar shall be affected by any notice to the contrary; and all such payments so made to
any such Holder for the time being, or upon his order, shall be valid and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such
Debt Security.
None of the Issuers, the Subsidiary Guarantors, the Trustee, any paying agent or any Registrar
will have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.
Section 8.04 Instruments Executed by Holders Bind Future Holders. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the Holders of the percentage in aggregate principal amount of the Debt Securities of any
series specified in this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be included in the Debt
Securities the Holders of which have consented to such action may, by filing written notice with
the Trustee at its corporate trust office and upon proof of holding as provided in Section 8.02,
revoke such action so far as concerns such Debt Security. Except as aforesaid any such action
taken by the Holder of any Debt Security shall be conclusive and binding upon such Holder and upon
all future Holders and owners of such Debt Security and of any Debt Security issued upon transfer
thereof or in exchange or substitution therefor, irrespective of whether or not any notation in
regard thereto is made upon such Debt Security or such other Debt Securities. Any action taken by
the Holders of the percentage in aggregate principal amount of the Debt Securities of any series
specified in this Indenture in connection with such action shall be conclusively binding upon the
Issuers, the Subsidiary Guarantors, the Trustee and the Holders of all the Debt Securities of such
series.
The Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of Debt Securities entitled to give their consent or take any other action
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
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notwithstanding the immediately preceding paragraph, those Persons who were Holders of Debt
Securities at such record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to take any such action,
whether or not such Persons continue to be Holders of Debt Securities after such record date. No
such consent shall be valid or effective for more than 120 days after such record date unless the
consent of the Holders of the percentage in aggregate principal amount of the Debt Securities of
such series specified in this Indenture shall have been received within such 120-day period.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Purposes for Which Supplemental Indenture May Be Entered into Without Consent
of Holders. The Issuers and any Subsidiary Guarantors, when authorized by resolutions of each
Issuers Board of Directors, and the Trustee may from time to time and at any time, without the
consent of Holders, enter into an Indenture or Indentures supplemental hereto (which shall conform
to the provisions of the TIA as in force at the date of the execution thereof) for one or more of
the following purposes:
(a) to evidence the succession pursuant to Article X of another Person to either of the
Issuers, or successive successions, and the assumption by the Successor Company (as defined in
Section 10.01) of the covenants, agreements and obligations of its predecessor Issuer in this
Indenture and in the Debt Securities;
(b) to surrender any right or power herein conferred upon the Issuers or the Subsidiary
Guarantors, to add to the covenants of the Issuers or the Subsidiary Guarantors such further
covenants, restrictions, conditions or provisions for the protection of the Holders of all or any
series of Debt Securities (and if such covenants are to be for the benefit of less than all series
of Debt Securities, stating that such covenants are expressly being included solely for the benefit
of such series) as the Board of Directors shall consider to be for the protection of the Holders of
such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a Default
in any of such additional covenants, restrictions, conditions or provisions a Default or an Event
of Default permitting the enforcement of all or any of the several remedies provided in this
Indenture; provided, that in respect of any such additional covenant, restriction, condition or
provision such supplemental Indenture may provide for a particular period of grace after Default
(which period may be shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such Default or may limit the remedies available to the
Trustee upon such Default or may limit the right of the Holders of a majority in aggregate
principal amount of any or all series of Debt Securities to waive such Default;
(c) to cure any ambiguity or omission or to correct or supplement any provision contained
herein, in any supplemental Indenture or in any Debt Securities of any series that may be defective
or inconsistent with any other provision contained herein, in any supplemental Indenture or in the
Debt Securities of such series; to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or to make such other provisions in regard to matters or questions arising under
this Indenture as shall not adversely affect the interests of any Holders of Debt Securities of any
series;
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(d) to permit the qualification of this Indenture or any Indenture supplemental hereto under
the TIA as then in effect, except that nothing herein contained shall permit or authorize the
inclusion in any Indenture supplemental hereto of the provisions referred to in Section 316(a)(2)
of the TIA;
(e) to change or eliminate any restrictions on the payment of principal of, or premium, if
any, on, Debt Securities; provided, that any such action shall not adversely affect the interests
of the Holders of Debt Securities of any series in any material respect or permit or facilitate the
issuance of Debt Securities of any series in uncertificated form;
(f) to reflect the release of any Subsidiary Guarantor in accordance with Article XIV
(g) in the case of any Debt Securities subordinated pursuant to Article XII, to make any
change in Article XII that would limit or terminate the benefits available to any holder of Senior
Indebtedness (or Representatives therefor) under Article XII;
(h) to add Subsidiary Guarantors with respect to any or all of the Debt Securities or to
secure any or all of the Debt Securities or the Guarantee;
(i) to make any change that does not adversely affect the rights hereunder of any Holder;
(j) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Debt Securities; provided, however, that any such addition, change or elimination
not otherwise permitted under this Section 9.01 shall neither apply to any Debt Security of any
series created prior to the execution of such supplemental Indenture and entitled to the benefit of
such provision nor modify the rights of the Holder of any such Debt Security with respect to such
provision or shall become effective only when there is no such Debt Security Outstanding;
(k) to evidence and provide for the acceptance of appointment hereunder by a successor or
separate Trustee with respect to the Debt Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; and
(l) to establish the form or terms of Debt Securities of any series as permitted by Sections
2.01 and 2.03.
The Trustee is hereby authorized to join with the Issuers and the Subsidiary Guarantors in the
execution of any such supplemental Indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into
any such supplemental Indenture which affects the Trustees own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this Section 9.01 may be executed
by the Issuers, the Subsidiary Guarantors and the Trustee without the consent of the
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Holders of any of the Debt Securities at the time Outstanding, notwithstanding any of the
provisions of Section 9.02.
In the case of Debt Securities subordinated pursuant to Article XII, an amendment under this
Section 9.01 may not make any change that adversely affects the rights under Article XII of any
holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or Representative thereof authorized to give a consent) consent to such change.
Section 9.02 Modification of Indenture with Consent of Holders of Debt Securities.
Without notice to any Holder but with the consent (evidenced as provided in Section 8.01) of the
Holders of not less than a majority in aggregate principal amount of the Outstanding Debt
Securities of each series affected by such supplemental Indenture (including consents obtained in
connection with a tender offer or exchange offer for any such series of Debt Securities), the
Issuers and the Subsidiary Guarantors, when authorized by resolutions of each Issuers Board of
Directors, and the Trustee may from time to time and at any time enter into an Indenture or
Indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the
date of execution thereof) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental Indenture or of
modifying in any manner the rights of the Holders of the Debt Securities of such series; provided,
that no such supplemental Indenture, without the consent of the Holders of each Debt Security so
affected, shall: reduce the percentage in principal amount of Debt Securities of any series whose
Holders must consent to an amendment; reduce the rate of or extend the time for payment of
interest on any Debt Security; reduce the principal of or extend the Stated Maturity of any Debt
Security; reduce any premium payable upon the redemption of any Debt Security or change the time
at which any Debt Security may or shall be redeemed in accordance with Article III; make any Debt
Security payable in currency other than the Dollar; impair the right of any Holder to receive
payment of premium, if any, principal of and interest on such Holders Debt Securities on or after
the due dates therefor or to institute suit for the enforcement of any payment on or with respect
to such Holders Debt Securities; in the case of any Debt Security subordinated pursuant to Article
XII, make any change in Article XII that adversely affects the rights of any Holder under Article
XII; release any security that may have been granted in respect of the Debt Securities, other than
in accordance with this Indenture; make any change in Section 6.06 or this Section 9.02; or, except
as provided in Section 11.02(b) or Section14.04, release the Subsidiary Guarantors other than as
provided in this Indenture or modify the Guarantee in any manner adverse to the Holders.
A supplemental Indenture which changes or eliminates any covenant or other provision of this
Indenture which has been expressly included solely for the benefit of one or more particular series
of Debt Securities or which modifies the rights of the Holders of Debt Securities of such series
with respect to such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Issuers, accompanied by a copy of resolutions of the Board of
Directors of each Issuer authorizing the execution of any such supplemental Indenture, and upon the
filing with the Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall join
with the Issuers and the Subsidiary Guarantors in the execution of such supplemental
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Indenture unless such supplemental Indenture affects the Trustees own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but
shall not be obligated to enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed supplemental Indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
In the case of any Debt Securities subordinated pursuant to Article XII, an amendment under
this Section 9.02 may not make any change that adversely affects the rights under Article XII of
any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or Representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section 9.02 requiring the consent of the Holders of any series
of Debt Securities becomes effective, the Issuers shall mail to Holders of that series of Debt
Securities of each series affected thereby a notice briefly describing such amendment. The failure
to give such notice to any such Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.02 with respect to other Holders.
Section 9.03 Effect of Supplemental Indentures. Upon the execution of any
supplemental Indenture pursuant to the provisions of this Article IX, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective rights, limitations
of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuers, the
Subsidiary Guarantors and the Holders shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental Indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may receive an Officers
Certificate and an Opinion of Counsel as conclusive evidence that any such supplemental Indenture
complies with the provisions of this Article IX.
Section 9.04 Debt Securities May Bear Notation of Changes by Supplemental Indentures.
Debt Securities of any series authenticated and delivered after the execution of any supplemental
Indenture pursuant to the provisions of this Article IX 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. New Debt Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture contained in any such
supplemental Indenture may be prepared and executed by the Issuers, authenticated by the Trustee
and delivered in exchange for the Debt Securities of such series then Outstanding. Failure to make
the appropriate notation or to issue a new Debt Security of such series shall not affect the
validity of such amendment.
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ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01 Consolidations and Mergers of the Issuers. Neither of the Issuers may
consolidate or amalgamate with or merge with or into any Person, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all its assets to any Person, whether in a single
transaction or a series of related transactions, unless: (a) either (i) such Issuer shall be the
surviving Person in the case of a merger or (ii) the resulting, surviving or transferee Person if
other than such Issuer (the Successor Company), shall be a partnership, limited liability company
or corporation organized and existing under the laws of the United States, any State thereof or the
District of Columbia and the Successor Company shall expressly assume, by an Indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of such Issuer under this Indenture and the Debt Securities according to their tenor;
(b) immediately after giving effect to such transaction or series of transactions (and treating any
Debt which becomes an obligation of the Successor Company or any Subsidiary of such Issuer as a
result of such transaction as having been incurred by the Successor Company or such Subsidiary at
the time of such transaction or series of transactions), no Default or Event of Default would occur
or be continuing; (c) if such Issuer is not the continuing Person, then each Subsidiary Guarantor,
unless it has become the Successor Company, shall confirm that its Guarantee shall continue to
apply to the obligations under the Debt Securities and this Indenture; and (d) the Issuers shall
have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that
such consolidation, amalgamation, merger or disposition and such supplemental Indenture (if any)
comply with this Indenture.
Section 10.02 Rights and Duties of Successor Company. In case of any consolidation,
amalgamation or merger where such Issuer is not the continuing Person, or disposition of all or
substantially all of the assets of such Issuer in accordance with Section 10.01, the Successor
Company shall succeed to and be substituted for such Issuer with the same effect as if it had been
named herein as the respective party to this Indenture, and the predecessor entity shall be
released from all liabilities and obligations under this Indenture and the Debt Securities, except
that no such release will occur in the case of a lease of all or substantially all of such Issuers
assets. The Successor Company thereupon may cause to be signed, and may issue either in its own
name or in the name of such Issuer, any or all the Debt Securities issuable hereunder which
theretofore shall not have been signed by or on behalf of such Issuer and delivered to the
Trustee; and, upon the order of the Successor Company, instead of such Issuer, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate
and shall deliver any Debt Securities which previously shall have been signed and delivered by or
on behalf of such Issuer to the Trustee for authentication, and any Debt Securities which the
Successor Company thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debt Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all such Debt Securities had been issued at the date of
the execution hereof.
In case of any such consolidation, amalgamation, merger, sale or disposition such changes in
phraseology and form (but not in substance) may be made in the Debt Securities thereafter to be
issued as may be appropriate.
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ARTICLE XI
SATISFACTION AND DISCHARGE OF
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01 Applicability of Article. The provisions of this Article XI relating to
discharge or defeasance of Debt Securities shall be applicable to each series of Debt Securities
except as otherwise specified pursuant to Section 2.03 for Debt Securities of such series.
Section 11.02 Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time the Issuers shall have delivered to the Trustee for cancellation all Debt
Securities of any series theretofore authenticated and delivered (other than any Debt Securities of
such series which shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.09 and Debt Securities for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Issuers as provided in Section 11.05) or all Debt
Securities of such series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Issuers shall deposit with the Trustee as trust funds the
entire amount in cash sufficient to pay at final maturity or upon redemption all Debt Securities of
such series not theretofore delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due on such date of maturity or Redemption Date, as
the case may be, and if in either case the Issuers shall also pay or cause to be paid all other
sums payable hereunder by the Issuers, then this Indenture shall cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of such Debt Securities
herein expressly provided for) with respect to the Debt Securities of such series, and the Trustee,
on demand of the Issuers accompanied by an Officers Certificate and an Opinion of Counsel and at
the cost and expense of the Issuers, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture with respect to the Debt Securities of such series.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Issuers at any time may terminate, with
respect to Debt Securities of a particular series, all its obligations under the Debt Securities
of such series and this Indenture with respect to the Debt Securities of such series (legal
defeasance option) or the operation of (w) Sections 4.09 and 4.10, (x) any covenant made
applicable to such Debt Securities pursuant to Section 2.03, (y) Sections 6.01(d), (g) and (h) and
(z) as they relate to the Subsidiary Guarantors only, Sections 6.01(e) and (f) (covenant
defeasance option). If the Issuers exercise either their legal defeasance option or their
covenant defeasance option with respect to Debt Securities of a particular series that are entitled
to the benefit of the Guarantee, the Guarantee will terminate with respect to that series of Debt
Securities. The Issuers may exercise their legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Issuers exercise their legal defeasance option, payment of the Debt Securities of the
defeased series may not be accelerated because of an Event of Default. If the Issuers exercise
their covenant defeasance option, payment of the Debt Securities of the defeased series may not
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be accelerated because of an Event of Default specified in Sections 6.01(d), (g) and (h) and,
with respect to the Subsidiary Guarantors only, Sections 6.01(e) and (f).
Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the
Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.07,
2.09, 4.02, 4.03, 4.04, the last sentence of 4.05(a), 4.06(a), 5.01, 7.06, 11.05, 11.06 and 11.07
shall survive until the Debt Securities of the defeased series have been paid in full. Thereafter,
the Issuers obligations in Sections 7.06, 11.05 and 11.06 shall survive.
Section 11.03 Conditions of Defeasance. The Issuers may exercise their legal
defeasance option or its covenant defeasance option with respect to Debt Securities of a particular
series only if:
(a) the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government
Obligations for the payment of principal of, and premium, if any, and interest on, the Debt
Securities of such series to final maturity or redemption, as the case may be;
(b) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of
independent accountants expressing their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts as will be sufficient to pay
the principal, premium, if any, and interest when due on all the Debt Securities of such series to
final maturity or redemption, as the case may be;
(c) 91 days pass after the deposit is made and during the 91-day period no Default specified
in Section 6.01(e) or (f) with respect to the Issuers occurs which is continuing at the end of the
period;
(d) no Default has occurred and is continuing on the date of such deposit and after giving
effect thereto;
(e) the deposit does not constitute a default under any other agreement binding on the Issuers
and, if the Debt Securities of such series are subordinated pursuant to Article XII, is not
prohibited by Article XII;
(f) the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;
(g) in the event of the legal defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel stating that the Issuers have received from the Internal Revenue
Service a ruling, or since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such defeasance and will be
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subject to Federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;
(h) in the event of the covenant defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of Debt Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not occurred; and
(i) the Issuers deliver to the Trustee an Officers Certificate and an Opinion of Counsel,
each stating that all conditions precedent to the defeasance and discharge of the Debt Securities
of such series as contemplated by this Article XI have been complied with.
Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for
the redemption of Debt Securities of such series at a future date in accordance with Article III.
Section 11.04 Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article XI. It shall apply the
deposited money and the money from U.S. Government Obligations through any paying agent and in
accordance with this Indenture to the payment of principal of, and premium, if any, and interest
on, the Debt Securities of the defeased series. In the event the Debt Securities of the defeased
series are subordinated pursuant to Article XII, money and securities so held in trust are not
subject to Article XII.
Section 11.05 Repayment to Issuers. The Trustee and any paying agent shall promptly
turn over to the Issuers upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any paying agent shall pay
to the Issuers upon request any money held by them for the payment of principal, premium or
interest that remains unclaimed for two years, and, thereafter, Holders entitled to such money must
look to the Issuers for payment as general creditors.
Section 11.06 Indemnity for U.S. Government Obligations. The Issuers shall pay and
shall indemnify the Trustee and the Holders against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government Obligations or the principal and interest received on
such U.S. Government Obligations.
Section 11.07 Reinstatement. If the Trustee or any paying agent is unable to apply
any money or U.S. Government Obligations in accordance with this Article XI by reason of any legal
proceeding or by reason of any order or judgment of any court or government authority enjoining,
restraining or otherwise prohibiting such application, the Issuers obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and reinstated as though
no deposit had occurred pursuant to this Article XI until such time as the Trustee or any paying
agent is permitted to apply all such money or U.S. Government Obligations in accordance with this
Article XI.
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ARTICLE XII
SUBORDINATION OF DEBT SECURITIES AND GUARANTEE
Section 12.01 Applicability of Article; Agreement to Subordinate. The provisions of
this Article XII shall only be applicable to the Debt Securities of any series (Debt Securities of
such series referred to in this Article XII as Subordinated Debt Securities) designated, pursuant
to Section 2.03, as subordinated to Senior Indebtedness and any related Guarantee of such
Subordinated Debt Securities. Each Holder by accepting a Subordinated Debt Security agrees that
the Debt evidenced by such Subordinated Debt Security and any related Guarantee of such
Subordinated Debt Security is subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment of all Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. All
provisions of this Article XII shall be subject to Section 12.12.
Section 12.02 Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution
of the assets of any of the Issuers or the Subsidiary Guarantors to creditors (i) upon a
liquidation or a dissolution of any of the Issuers or the Subsidiary Guarantors or (ii) in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to any of the
Issuers or the Subsidiary Guarantors or its property:
(a) holders of Senior Indebtedness of the Issuers or any Subsidiary Guarantor, as the case may
be, shall be entitled to receive payment in full in cash of such Senior Indebtedness of such Person
(including interest (if any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against any of the Issuers or the Subsidiary Guarantors, as the
case may be, in such bankruptcy proceeding) before Holders of Subordinated Debt Securities and any
related Guarantee shall be entitled to receive any payment of principal of, or premium, if any, or
interest on, the Subordinated Debt Securities from the Issuers, or any payment in respect of the
Guarantee from the Subsidiary Guarantors; and
(b) until the Senior Indebtedness of the Issuers or any Subsidiary Guarantor, as the case may
be, is paid in full, any distribution to which Holders of Subordinated Debt Securities and any
related Guarantee would be entitled but for this Article XII shall be made to holders of Senior
Indebtedness of the Issuers or the Subsidiary Guarantors, as the case may be, as their interests
may appear, except that such Holders may receive capital stock and any debt securities that are
subordinated to Senior Indebtedness of any of the Issuers or the Subsidiary Guarantors, as the case
may be, to at least the same extent as the Subordinated Debt Securities of the Issuers or the
related Guarantee of any Subsidiary Guarantor, respectively.
Section 12.03 Default on Senior Indebtedness. The Issuers and the Subsidiary
Guarantors may not pay the principal of, or premium, if any, or interest on, the Subordinated Debt
Securities or any related Guarantee or make any deposit pursuant to Article XI and may not
repurchase, redeem or otherwise retire (except, in the case of Subordinated Debt Securities that
provide for a mandatory sinking fund pursuant to Section 3.05, by the delivery of Subordinated Debt
Securities by the Issuers to the Trustee pursuant to the first paragraph of Section 3.05) any
Subordinated Debt Securities (collectively, pay the Subordinated Debt Securities) if any
principal, premium or interest in respect of Senior Indebtedness of such Person is not paid within
any applicable grace period (including at maturity) or any other default on Senior Indebtedness
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of such Person occurs and the maturity of such Senior Indebtedness is accelerated in
accordance with its terms unless and until the default has been cured or waived and any such
acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash;
provided, however, that the Issuers and the Subsidiary Guarantors may make payments on the
Subordinated Debt Securities or any related Guarantee without regard to the foregoing if the
Issuers and the Trustee receive written notice approving such payment from the Representative of
each issue of Designated Senior Indebtedness. During the continuance of any other default with
respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be required to effect
such acceleration) or the expiration of any applicable grace periods, the Issuers and the
Subsidiary Guarantors may not make payments on the Subordinated Debt Securities or any related
Guarantee for a period (a Payment Blockage Period) commencing upon the receipt by the Issuers and
the Trustee (and if such Designated Senior Indebtedness is Debt of a Subsidiary Guarantor, the
Subsidiary Guarantor) of written notice of such default from the Representative of any Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period (a Blockage
Notice) and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated
by written notice to the Trustee and the Issuers (and if such Designated Senior Indebtedness is
Debt of a Subsidiary Guarantor, the Subsidiary Guarantor) from the Person or Persons who gave such
Blockage Notice, by repayment in full in cash of such Designated Senior Indebtedness or because
the default giving rise to such Blockage Notice is no longer continuing). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the provisions contained
in Section 12.02 and the first sentence of this Section 12.03), unless the holders of such
Designated Senior Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Issuers and the Subsidiary Guarantors may
resume payments on the Subordinated Debt Securities and related Guarantees after such Payment
Blockage Period. Not more than one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to any number of issues of Designated Senior
Indebtedness during such period, unless otherwise specified pursuant to Section 2.03 for the
Subordinated Debt Securities of a series; provided, however, that in no event may the total number
of days during which any Payment Blockage Period or Periods is in effect exceed 179 days in the
aggregate during any 360 consecutive day period. For purposes of this Section 12.03, no default or
event of default which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period
by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
Section 12.04 Acceleration of Payment of Debt Securities. If payment of the
Subordinated Debt Securities is accelerated because of an Event of Default, the Issuers shall
promptly notify the holders of the Designated Senior Indebtedness (or their Representatives) of the
acceleration.
Section 12.05 When Distribution Must Be Paid Over. If a distribution is made to
Holders of Subordinated Debt Securities or a related Guarantee that because of this Article XII
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should not have been made to them, the Holders who receive such distribution shall hold it in
trust for holders of Senior Indebtedness and pay it over to them as their interests may appear.
Section 12.06 Subrogation. After all Senior Indebtedness is paid in full and until
the Subordinated Debt Securities are paid in full, Holders thereof shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness. A distribution made under this Article XII to holders of Senior Indebtedness which
otherwise would have been made to Holders of Subordinated Debt Securities is not, as between the
Issuers or the Subsidiary Guarantors, as the case may be, and such Holders, a payment by the
Issuers or the Subsidiary Guarantors, as the case may be, on Senior Indebtedness.
Section 12.07 Relative Rights. This Article XII defines the relative rights of
Holders of Subordinated Debt Securities and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(a) impair, as between the Issuers or the Subsidiary Guarantors, as the case may be, and
Holders of Subordinated Debt Securities, the obligation of the Issuers or the Subsidiary
Guarantors, as the case may be, which is absolute and unconditional, to pay principal of, and
premium, if any, and interest on, the Subordinated Debt Securities in accordance with their terms;
or
(b) prevent the Trustee or any Holder of Subordinated Debt Securities from exercising its
available remedies upon an Event of Default, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise payable to Holders of Subordinated Debt Securities.
Section 12.08 Subordination May Not Be Impaired by Issuers. No right of any holder of
Senior Indebtedness to enforce the subordination of the Debt evidenced by the Subordinated Debt
Securities and the Guarantee in respect thereof shall be impaired by any act or failure to act by
any of the Issuers or the Subsidiary Guarantors or by its failure to comply with this Indenture.
Section 12.09 Rights of Trustee and Paying Agent. Notwithstanding Sections 12.02 and
12.03, the Trustee or any paying agent may continue to make payments on Subordinated Debt
Securities and shall not be charged with knowledge of the existence of facts that would prohibit
the making of any such payments unless, not less than two Business Days prior to the date of such
payment, a responsible officer of the Trustee receives notice satisfactory to it that payments may
not be made under this Article XII. The Issuers, the Registrar, any paying agent, a Representative
or a holder of Senior Indebtedness may give the notice; provided, however, that, if an issue of
Senior Indebtedness has a Representative, only the Representative may give the notice on behalf of
the Holders of the Senior Indebtedness of that issue.
The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same
rights it would have if it were not Trustee. The Registrar and any paying agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in this Article XII
with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness; and nothing in Article VII shall deprive the Trustee
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of any of its rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
Section 12.10 Distribution or Notice to Representative. Whenever a distribution is to
be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the
notice given to their Representative (if any).
Section 12.11 Article XII Not to Prevent Defaults or Limit Right to Accelerate. The
failure to make a payment pursuant to the Subordinated Debt Securities, whether directly or
pursuant to the Guarantee, by reason of any provision in this Article XII shall not be construed as
preventing the occurrence of a Default. Nothing in this Article XII shall have any effect on the
right of the Holders or the Trustee to accelerate the maturity of either the Subordinated Debt
Securities or the Debt Securities, as the case may be.
Section 12.12 Trust Moneys Not Subordinated. Notwithstanding anything contained
herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in
trust under Article XI by the Trustee for the payment of principal of, and premium, if any, and
interest on, the Subordinated Debt Securities or the Debt Securities shall not be subordinated to
the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this
Article XII, and none of the Holders thereof shall be obligated to pay over any such amount to the
Issuers, the Subsidiary Guarantors or any holder of Senior Indebtedness of the Issuers or the
Subsidiary Guarantors or any other creditor of the Issuers or the Guarantor.
Section 12.13 Trustee Entitled to Rely. Upon any payment or distribution pursuant to
this Article XII, the Trustee and the Holders shall be entitled to rely upon any order or decree
of a court of competent jurisdiction in which any proceedings of the nature referred to in Section
12.02 are pending, upon a certificate of the liquidating trustee or agent or other Person making
such payment or distribution to the Trustee or to such Holders or upon the Representatives for the
holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and other Debt of any of
the Issuers or the Subsidiary Guarantors, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XII.
In the event that the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article XII, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article XII.
Section 12.14 Trustee to Effectuate Subordination. Each Holder by accepting a
Subordinated Debt Security authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination between the
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Holders of Subordinated Debt Securities and the holders of Senior Indebtedness as provided in
this Article XII and appoints the Trustee as attorney-in-fact for any and all such purposes.
Section 12.15 Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not
be liable to any such holders if it shall mistakenly pay over or distribute to Holders of
Subordinated Debt Securities or any of the Issuers or the Subsidiary Guarantors or any other
Person, money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of
this Article XII or otherwise.
Section 12.16 Reliance by Holders of Senior Indebtedness on Subordination Provisions.
Each Holder by accepting a Subordinated Debt Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a consideration to each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before
or after the issuance of the Subordinated Debt Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and continuing to hold,
or in continuing to hold, such Senior Indebtedness.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Successors and Assigns of Issuers Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the
Issuers, the Subsidiary Guarantors or the Trustee shall bind their respective successors and
assigns, whether so expressed or not.
Section 13.02 Acts of Board, Committee or Officer of Successor Issuer Valid. Any act
or proceeding by any provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of either of the Issuers shall and may be done and performed with
like force and effect by the like board, committee or officer of any Successor Company.
Section 13.03 Required Notices or Demands. Any notice or communication by the
Issuers, the Subsidiary Guarantors or the Trustee to the others is duly given if in writing in the
English language and delivered in Person or mailed by registered or certified mail (return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery, to the others
address:
If to the Issuers or any Subsidiary Guarantor:
DCP Midstream Partners, LP
1700 Pacific, Suite 2900
Dallas, Texas 75201
Attention: Chief Legal Officer
Telecopy No. (214) 750-1749
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If to the Trustee:
[ ]
The Issuers, any Subsidiary Guarantor or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; on the first Business Day on or after being sent, if telecopied and the sender
receives confirmation of successful transmission; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice required or permitted to a Holder by the Issuers, any Subsidiary Guarantor or the
Trustee pursuant to the provisions of this Indenture shall be deemed to be properly mailed by being
deposited postage prepaid in a post office letter box in the United States addressed to such Holder
at the address of such Holder as shown on the Debt Security Register. Any report pursuant to
Section 313 of the TIA shall be transmitted in compliance with subsection (c) therein.
Notwithstanding the foregoing, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required pursuant to Section 2.03,
shall be sufficiently given if given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any other cause it shall be
impracticable to give notice by mail, then such notification as shall be given with the approval of
the Trustee shall constitute sufficient notice for every purpose hereunder.
In the event it shall be impracticable to give notice by publication, then such notification
as shall be given with the approval of the Trustee shall constitute sufficient notice for every
purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in it or any defect in any
notice by publication as to a Holder shall not affect the sufficiency of such notice with respect
to other Holders. If a notice or communication is mailed or published in the manner provided
above, it is conclusively presumed duly given.
Section 13.04 Indenture and Debt Securities to Be Construed in Accordance with the Laws of
the State of New York. THIS INDENTURE, EACH DEBT SECURITY AND THE GUARANTEE SHALL BE DEEMED TO
BE NEW YORK CONTRACTS, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF SAID STATE.
Section 13.05 Officers Certificate and Opinion of Counsel to Be Furnished upon
Application or Demand by the Issuers. Upon any application or demand by the Issuers to the
Trustee to take any action under any of the provisions of this Indenture, each of the Issuers shall
furnish to the Trustee an Officers Certificate stating that all conditions precedent provided for
in
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this Indenture relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions precedent have been
complied with, except that in the case of any such application or demand as to which the furnishing
of such document is specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this Indenture shall include (a)
a statement that the Person making such certificate or opinion has read such covenant or condition,
(b) 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, (c) a statement that, in
the opinion of such Person, 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 (d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 13.06 Payments Due on Legal Holidays. In any case where the date of maturity
of interest on or principal of and premium, if any, on the Debt Securities of a series or the date
fixed for redemption or repayment of any Debt Security or the making of any sinking fund payment
shall not be a Business Day at any Place of Payment for the Debt Securities of such series, then
payment of interest or principal and premium, if any, or the making of such sinking fund payment
need not be made on such date at such Place of Payment, 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 date of
maturity or the date fixed for redemption, and no interest shall accrue for the period after such
date. If a record date is not a Business Day, the record date shall not be affected.
Section 13.07 Provisions Required by TIA to Control. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another provision included in this
Indenture which is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the TIA, such required provision shall control.
Section 13.08 Computation of Interest on Debt Securities. Interest, if any, on the
Debt Securities shall be computed on the basis of a 360-day year of twelve 30-day months, except as
may otherwise be provided pursuant to Section 2.03.
Section 13.09 Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or a meeting of Holders. The Registrar and any paying agent may
make reasonable rules for their functions.
Section 13.10 No Recourse Against Others. The General Partner and its directors,
officers, employees and members, as such, shall have no liability for any obligations of the
Subsidiary Guarantors or the Issuers under the Debt Securities, this Indenture or the Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or their creation. By
accepting a Debt Security, each Holder shall be deemed to have waived and released all such
liability. The waiver and release shall be part of the consideration for the issue of the Debt
Securities.
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Section 13.11 Severability. In case any provision in this Indenture or the Debt
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 13.12 Effect of Headings. The article and section headings herein and in the
Table of Contents are for convenience only and shall not affect the construction hereof.
Section 13.13 Indenture May Be Executed in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
ARTICLE XIV
GUARANTEE
Section 14.01 Unconditional Guarantee.
(a) Notwithstanding any provision of this Article XIV to the contrary, the provisions of this
Article XIV shall be applicable only to, and inure solely to the benefit of, the Debt Securities of
any series designated, pursuant to Section 2.03, as entitled to the benefits of the Guarantee of
each of the Subsidiary Guarantors.
(b) For value received, each of the Subsidiary Guarantors hereby fully, unconditionally and
absolutely guarantees (the Guarantee) to the Holders and to the Trustee the due and punctual
payment of the principal of, and premium, if any, and interest on the Debt Securities and all other
amounts due and payable under this Indenture and the Debt Securities by the Issuers, 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 Debt Securities and this Indenture, subject to (i) the limitations set forth in
Section 14.03 and (ii) in the case of the Guarantee of the Subordinated Debt Securities, to the
subordination provisions contained in Article XII.
(c) Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever
reason, each of the Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately, subject, in the case of the Guarantee of the Subordinated Debt Securities, to the
subordination provisions contained in Article XII. The Guarantee hereunder (other than the
Guarantee of Subordinated Debt Securities) is intended to be a general, unsecured, senior
obligation of each of the Subsidiary Guarantors and will rank pari passu in right of payment with
all Debt of each Subsidiary Guarantor that is not, by its terms, expressly subordinated in right of
payment to the Guarantee. Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be full, unconditional and absolute, irrespective of the validity, regularity or
enforceability of the Debt Securities, the Guarantee (including the Guarantee of any other
Subsidiary Guarantor) or this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Debt Securities with respect to any provisions hereof or thereof,
the recovery of any judgment against either of the Issuers or any other Subsidiary Guarantor, or
any action to enforce the same or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of any of the Subsidiary Guarantors. Each of the Subsidiary
Guarantors hereby agrees that in the event of a default in
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payment of the principal of, or premium, if any, or interest on the Debt Securities, whether
at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.04,
by the Holders, on the terms and conditions set forth in this Indenture, directly against such
Subsidiary Guarantor to enforce the Guarantee without first proceeding against either of the
Issuers or any other Subsidiary Guarantor.
(d) The obligations of each of the Subsidiary Guarantors under this Article XIV shall be as
aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited
by any occurrence or condition whatsoever, including, without limitation, (A) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of any of the Issuers or the Subsidiary Guarantors contained
in the Debt Securities or this Indenture, (B) any impairment, modification, release or limitation
of the liability of any of the Issuers or the Subsidiary Guarantors 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 any of the Issuers, the Subsidiary
Guarantors or the Trustee of any rights or remedies under the Debt Securities or this Indenture or
their delay in or failure to assert or exercise any such rights or remedies, (D) the assignment or
the purported assignment of any property as security for the Debt Securities, including all or any
part of the rights of any of the Issuers or the Subsidiary Guarantors under this Indenture, (E) the
extension of the time for payment by any of the Issuers or the Subsidiary Guarantors of any
payments or other sums or any part thereof owing or payable under any of the terms and provisions
of the Debt Securities or this Indenture or of the time for performance by any of the Issuers or
the Subsidiary Guarantors 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 any of the Issuers or the
Subsidiary Guarantors set forth in this Indenture, (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, any of the Issuers or the Subsidiary Guarantors or any of their respective assets, or
the disaffirmance of the Debt Securities, the Guarantee or this Indenture in any such proceeding,
(H) the release or discharge of any of the Issuers or the Subsidiary Guarantors 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 Debt Securities, the Guarantee or
this Indenture or (J) any other circumstances (other than payment in full or discharge of all
amounts guaranteed pursuant to the Guarantee) which might otherwise constitute a legal or equitable
discharge of a surety or guarantor.
(e) Each of the Subsidiary 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 any
of the Issuers or the Subsidiary Guarantors, and all demands whatsoever, (B) acknowledges that any
agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit
of its obligations hereunder shall extend to each holder of any agreement, instrument or document
evidencing the Guarantee without notice to it and (C) covenants that the Guarantee will not be
discharged except by complete performance of the
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Guarantee. Each of the Subsidiary Guarantors further agrees that if at any time all or any
part of any payment theretofore applied by any Person to the Guarantee is, or must be, rescinded or
returned for any reason whatsoever, including without limitation, the insolvency, bankruptcy or
reorganization of any of the Issuers or the Subsidiary Guarantors, the Guarantee shall, to the
extent that such payment is or must be rescinded or returned, be deemed to have continued in
existence notwithstanding such application, and the Guarantee shall continue to be effective or be
reinstated, as the case may be, as though such application had not been made.
(f) Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holders and the
Trustee against the Issuers in respect of any amounts paid by such Subsidiary Guarantor pursuant to
the provisions of this Indenture, provided, however, that such Subsidiary Guarantor, shall not be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all of the Debt Securities and the Guarantee shall have been paid in full or
discharged.
Section 14.02 Execution and Delivery of Guarantee. To further evidence the Guarantee
set forth in Section 14.01, each of the Subsidiary Guarantors hereby agrees that a notation
relating to such Guarantee, substantially in the form attached hereto as Annex A, shall be endorsed
on each Debt Security entitled to the benefits of the Guarantee authenticated and delivered by the
Trustee and executed by either manual or facsimile signature of an Officer of such Subsidiary
Guarantor. Each of the Subsidiary Guarantors hereby agrees that the Guarantee set forth in Section
14.01 shall remain in full force and effect notwithstanding any failure to endorse on each Debt
Security a notation relating to the Guarantee. If any Officer of any Subsidiary Guarantor whose
signature is on this Indenture or a Debt Security no longer holds that office at the time the
Trustee authenticates such Debt Security or at any time thereafter, the Guarantee of such Debt
Security shall be valid nevertheless. The delivery of any Debt Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of the Subsidiary Guarantors.
The Trustee hereby accepts the trusts in this Indenture upon the terms and conditions herein
set forth.
Section 14.03 Limitation on Subsidiary Guarantors Liability. Each Subsidiary
Guarantor and by its acceptance hereof each Holder of a Debt Security entitled to the benefits of
the Guarantee hereby confirm that it is the intention of all such parties that the guarantee by
such Subsidiary Guarantor pursuant to the Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Federal or state law. To effectuate the foregoing intention, the
Holders of a Debt Security entitled to the benefits of the Guarantee and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of each Subsidiary Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under the Guarantee, not result in the obligations of such Subsidiary Guarantor under the
Guarantee constituting a fraudulent conveyance or fraudulent transfer under Federal or state law.
Section 14.04 Release of Subsidiary Guarantors from Guarantee.
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(a) Notwithstanding any other provisions of this Indenture, the Guarantee of any Subsidiary
Guarantor may be released upon the terms and subject to the conditions set forth in Section
11.02(b) and in this Section 14.04. Provided that no Default shall have occurred and shall be
continuing under this Indenture, the Guarantee incurred by a Subsidiary Guarantor pursuant to this
Article XIV shall be unconditionally released and discharged (i) automatically upon (A) any sale,
exchange or transfer, whether by way of merger or otherwise, to any Person that is not an Affiliate
of the Partnership, of all of the Partnerships direct or indirect limited partnership or other
equity interests in such Subsidiary Guarantor (provided such sale, exchange or transfer is not
prohibited by this Indenture) or (B) the merger of such Subsidiary Guarantor into either of the
Issuers or any other Subsidiary Guarantor or the liquidation and dissolution of such Subsidiary
Guarantor (in each case to the extent not prohibited by this Indenture) or (ii) upon the Issuers
delivery of a written notice to the Trustee of the release or discharge of all guarantees by such
Subsidiary Guarantor of any Debt of the Issuers other than obligations arising under this Indenture
and any Debt Securities issued hereunder, except a discharge or release by or as a result of
payment under such guarantees.
(b) The Trustee shall deliver an appropriate instrument evidencing any release of a Subsidiary
Guarantor from the Guarantee upon receipt of a written request of the Issuers accompanied by an
Officers Certificate and an Opinion of Counsel to the effect that the Subsidiary Guarantor is
entitled to such release in accordance with the provisions of this Indenture. Any Subsidiary
Guarantor not so released shall remain liable for the full amount of principal of (and premium, if
any) and interest on the Debt Securities entitled to the benefits of the Guarantee as provided in
this Indenture, subject to the limitations of Section 14.03.
Section 14.05 Subsidiary Guarantor Contribution. In order to provide for just and
equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors hereby agree,
inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a
Funding Guarantor) under the Guarantee, such Funding Guarantor shall be entitled to a
contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the net
assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Issuers obligations with respect to
the Debt Securities or any other Subsidiary Guarantors obligations with respect to the Guarantee.
[Remainder of This Page Intentionally Left Blank.]
- 62 -
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.
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DCP MIDSTREAM PARTNERS, LP |
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By:
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DCP MIDSTREAM GP, LP,
its General Partner |
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By:
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DCP MIDSTREAM GP, LLC,
its General Partner |
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By: |
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Name:
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Title: |
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DCP MIDSTREAM PARTNERS FINANCE CORP. |
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By: |
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Name:
Title:
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[NAME OF SUBSIDIARY GUARANTOR(S)] |
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By: |
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Name:
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Title: |
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[
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By: |
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Name:
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[Signature
Page to Subordinated Indenture]
ANNEX A
NOTATION OF GUARANTEE
Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Debt Securities and all other amounts due
and payable under the Indenture and the Debt Securities by the Issuers.
The obligations of the Subsidiary Guarantors to the Holders of Debt Securities and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the
Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.
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[NAME OF SUBSIDIARY GUARANTOR(S)] |
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By: |
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Name:
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Title:
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A-1
exv5w1
Exhibit 5.1
April 20, 2007
DCP Midstream Partners, LP
370 17th Street, Suite 2775
Denver, Colorado 80202
Ladies and Gentlemen:
We have acted as counsel for DCP Midstream Partners, LP, a Delaware limited partnership (the
Partnership) and certain of its subsidiaries with respect to the preparation of the
Registration Statement on Form S-3 (the Registration Statement) filed on the date hereof
with the Securities and Exchange Commission (the Commission) in connection with the
registration by the Partnership under the Securities Act of 1933, as amended (the Securities
Act), of the offer and sale by the Partnership from time to time, pursuant to Rule 415 under
the Securities Act, of:
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common units representing limited partner interests in the Partnership (the
Common Units); |
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(2) |
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debt securities, which may be co-issued by DCP Midstream Partners Finance
Corp., a Delaware corporation (DCP Partners Finance), in one or more series,
consisting of notes, debentures or other evidences of indebtedness (the Debt
Securities); and |
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(3) |
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guarantees (the Guarantees) of the Debt Securities by certain
subsidiaries of the Partnership listed in the Registration Statement as guarantors (the
Guarantors). |
The Common Units, Debt Securities and Guarantees are collectively referred to herein as the
Securities. We have also participated in the preparation of the Prospectus (the
Prospectus) contained in the Registration Statement to which this opinion is an exhibit.
Capitalized terms not defined herein shall have the meanings ascribed to them in the Prospectus.
We have examined the Registration Statement, including the Prospectus, the form of Senior
Indenture (the Senior Indenture) filed as an exhibit to the Registration Statement the
form of Subordinated Indenture (the Subordinated Indenture, together with the Senior
Indenture, the Indentures) filed as an exhibit to the Registration Statement, the Amended
and Restated Agreement of Limited Partnership of the Partnership (the Partnership
Agreement), the Certificate of Limited Partnership (the Certificate) filed with the
Secretary of State of
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Vinson & Elkins LLP Attorneys at Law
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First City Tower, 1001 Fannin Street, Suite 2500 |
Austin Beijing Dallas Dubai Hong Kong Houston
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Houston, TX 77002-6760 |
London Moscow New York Shanghai Tokyo Washington
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Tel 713.758.2222 Fax 713.758.2346 www.velaw.com |
Delaware pursuant to the Delaware Revised Uniform Limited Partnership Act in connection with
the formation of the Partnership, other formation documents and agreements, as applicable, of DCP
Partners Finance and the Subsidiary Guarantors and such other documents as we have deemed necessary
or appropriate for purposes of this opinion. In addition, we have reviewed certain certificates of
officers of the Partnership and of public officials, and we have relied on such certificates with
respect to certain factual matters that we have not independently established.
In connection with this opinion, we have assumed that :
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(i) the Registration Statement, and any amendments thereto (including
post-effective amendments), will have become effective; |
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(ii) a Prospectus Supplement will have been prepared and filed with the
Commission describing the Securities offered thereby; |
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(iii) all Securities will be issued and sold in compliance with applicable
federal and state securities laws and in the manner stated in the Registration
Statement and the appropriate Prospectus Supplement; and |
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(iv) a definitive purchase, underwriting or similar agreement with respect to
any Securities offered will have been duly authorized and validly executed and
delivered by the Partnership and the other parties thereto. |
Based upon and subject to the foregoing, we are of the opinion that:
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(1) With respect to the Common Units, when (i) the Partnership has taken all
necessary action to approve the issuance of such Common Units, the terms of the
offering thereof and related matters and (ii) the Common Units have been issued and
delivered in accordance with the terms of the applicable definitive purchase,
underwriting or similar agreement approved by the Partnership upon payment of the
consideration thereof or provided for therein, then the Common Units will be validly
issued, fully paid and non-assessable. |
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(2) With respect to the Debt Securities and the Guarantees, when (i) the
Indentures have been duly qualified under the Trust Indenture Act of 1939, as amended;
(ii) the Partnership, DCP Partners Finance and the Subsidiary Guarantors, as
applicable, have taken all necessary action to approve the issuance and terms of such
Debt Securities and Guarantees, the terms of the offering thereof and related matters;
and (iii) such Debt Securities and Guarantees have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the applicable Indenture and
the applicable definitive purchase, underwriting or similar agreement approved by the
Partnership, DCP Partners Finance and the Subsidiary Guarantors, as applicable, upon
payment of the consideration thereof or provided for therein, such Debt Securities and
Guarantees |
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Vinson & Elkins LLP Attorneys at Law
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First City Tower, 1001 Fannin Street, Suite 2500 |
Austin Beijing Dallas Dubai Hong Kong Houston
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Houston, TX 77002-6760 |
London Moscow New York Shanghai Tokyo Washington
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Tel 713.758.2222 Fax 713.758.2346 www.velaw.com |
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will be legally issued and will constitute valid and legally binding obligations of
the Partnership, DCP Partners Finance and the Subsidiary Guarantors, as applicable,
enforceable against the Partnership, DCP Partners Finance and the Subsidiary
Guarantors, as applicable, in accordance with their terms, except as such
enforcement may be subject to any applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or other law relating to or affecting creditors rights
generally and general principles of equity. |
The opinions expressed herein are qualified in the following respects:
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(1) We have assumed, without independent verification, that the certificates for
the Common Units will conform to the specimens thereof examined by us and will have
been duly countersigned by a transfer agent and duly registered by a registrar of the
Common Units. |
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(2) We have assumed that (i) each document submitted to us for review is
accurate and complete, each such document that is an original is authentic, each such
document that is a copy conforms to an authentic original and all signatures on each
such document are genuine and (ii) each certificate from governmental officials
reviewed by us is accurate, complete and authentic, and all official public records are
accurate and complete. |
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(3) We express no opinions concerning (i) the validity or enforceability of any
provisions contained in the Indentures that purport to waive or not give effect to the
rights to notices, defenses, subrogation or other rights or benefits that cannot be
effectively waived under applicable law; or (ii) the enforceability of indemnification
provisions to the extent they purport to relate to liabilities resulting from or based
upon negligence or any violation of federal or state securities or blue sky laws. |
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(4) This opinion is limited in all respects to federal laws, the Delaware
Revised Uniform Limited Partnership Act and the Constitution of the State of Delaware,
as interpreted by the courts of the State of Delaware and of the United States. |
We hereby consent to the references to this firm under the caption Legal Matters in the
Prospectus and to the filing of this opinion as an Exhibit to the Registration Statement. By giving
such consent, we do not admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange
Commission issued thereunder.
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Very truly yours, |
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/s/ Vinson & Elkins L.L.P. |
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Vinson & Elkins LLP Attorneys at Law
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First City Tower, 1001 Fannin Street, Suite 2500 |
Austin Beijing Dallas Dubai Hong Kong Houston
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Houston, TX 77002-6760 |
London Moscow New York Shanghai Tokyo Washington
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Tel 713.758.2222 Fax 713.758.2346 www.velaw.com |
exv8w1
Exhibit 8.1
April 20, 2007
DCP Midstream Partners, LP
DCP Midstream Partners Finance Corp.
370 17th Street, Suite 2775
Denver, Colorado 80202
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RE:
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DCP MIDSTREAM PARTNERS, LP REGISTRATION STATEMENT ON FORM S-3 |
Ladies and Gentlemen:
We have acted as counsel for DCP Midstream Partners, LP (the Partnership), a Delaware
limited partnership, and DCP Midstream Partners Finance Corp. (DCP Finance), a Delaware
corporation, with respect to certain legal matters in connection with the filing with the
Securities and Exchange Commission (the Commission) of a registration statement (the
Registration Statement) under the Securities Act of 1933, as amended (the Securities Act),
regarding the offer and sale by the Partnership from time to time, pursuant to Rule 415 under the
Securities Act, of:
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common units representing limited partner interests in the Partnership (the Common Units); |
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debt securities, which may be co-issued by DCP Finance in one or more series, consisting of
notes, debentures or other evidences of indebtedness (the Debt Securities); and |
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guarantees (the Guarantees) of the Debt Securities by certain subsidiaries of the
Partnership listed in the Registration Statement as guarantors (the Subsidiary Guarantors). |
In connection therewith, we prepared the discussion (the Discussion) set forth under the caption
Material Tax Consequences in the prospectus included in the Registration Statement.
All statements of legal conclusions contained in the Discussion, unless otherwise noted, are
our opinion with respect to the matters set forth therein as of the effective date of the
Registration Statement qualified by the limitations contained in the Discussion. In addition, we
are of the opinion that the Discussion with respect to those matters as to which no legal
conclusions are provided is an accurate discussion of such federal income tax matters (except for
the representations and statements of fact by the Partnership and its general partner, included in
the Discussion, as to which we express no opinion).
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement
and to the use of our name in the Registration Statement. This consent does not constitute an
admission that we are experts within the meaning of such term as used in the Securities Act or
the rules and regulations of the Commission issued thereunder.
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Very truly yours,
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/s/ VINSON & ELKINS L.L.P.
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Vinson & Elkins L.L.P. |
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Vinson & Elkins LLP Attorneys at Law Austin Beijing Dallas Dubai
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First City Tower, 1001 Fannin Street, Suite 2300, Houston, TX 77002-6760 |
Houston London Moscow New York Shanghai Tokyo Washington
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Tel 713.758.2222 Fax 713.758.2346 www.velaw.com |
exv12w1
Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
The table below sets forth the calculation of Ratios of Earnings to Fixed Charges for DCP
Midstream Partners, LP for the periods indicated.
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DCP Midstream Partners, LP |
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Year Ended December 31, |
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2002 |
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2003 |
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2004 |
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2005 |
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Earnings from continuing operations before
fixed charges |
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Pretax income from continuing operations
before income or loss from equity investees |
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14.6 |
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16.3 |
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30.2 |
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47.4 |
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32.7 |
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0.1 |
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0.5 |
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Less: |
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(0.4 |
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Earnings from continuing operations before
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15.2 |
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44.9 |
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Fixed charges |
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Interest expense, net of capitalized interest |
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0.8 |
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0.1 |
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0.7 |
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Amortization of deferred loan costs |
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0.1 |
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Total fixed charges |
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0.1 |
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12.6 |
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Ratio of earnings to fixed charges |
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152.00 |
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168.00 |
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303.00 |
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32.60 |
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3.56 |
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For purposes of determining the ratio of earnings to fixed charges, earnings are defined
as pretax income from continuing operations before income or loss from equity investees, plus fixed
charges, plus distributed income of equity investees, less capitalized interest. Fixed charges
consist of interest expensed, capitalized interest, amortization of deferred loan costs, and an
estimate of the interest within rental expense.
exv23w1
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement of DCP Midstream
Partners, LP and DCP Midstream Partners Finance Corp. on Form S-3 of our reports dated March 14,
2007, relating to the consolidated financial statements and financial statement schedule of DCP
Midstream Partners, LP (which report expresses an unqualified opinion and includes an explanatory
paragraph relating to the preparation of the portion of the DCP Midstream Partners, LP
consolidated financial statements attributable to operations prior to December 7, 2005 from the
separate records of DCP Midstream, LLC (formerly Duke Energy Field Services, LLC) and the basis of
presentation of the consolidated financial statements of DCP Midstream Partners, LP to
retroactively reflect DCP Midstream Partners, LPs acquisition of the wholesale propane logistics
business and the preparation of the portion of the DCP Midstream Partners, LP consolidated
financial statements attributable to the wholesale propane logistics business from the separate
records maintained by DCP Midstream, LLC), and managements report on the effectiveness of
internal control over financial reporting appearing in the Annual Report on Form 10-K of DCP
Midstream Partners, LP for the year ended December 31, 2006 and to the reference to us under the
heading Experts in the Prospectus of DCP Midstream Partners, LP and DCP Midstream Partners
Finance Corp. which is part of this Registration Statement.
/s/
Deloitte & Touche LLP
Denver, Colorado
April 20, 2007
exv23w2
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of DCP Midstream
Partners, LP and DCP Midstream Partners Finance Corp. on Form S-3 of our report dated April 20,
2007, relating to the consolidated balance sheet of DCP Midstream GP, LP as of December 31, 2006
appearing in the Current Report on Form 8-K filed under the Securities and Exchange Act of 1934 of
DCP Midstream Partners, LP dated April 20, 2007 and to the reference to us under the heading
Experts in the Prospectus of DCP Midstream Partners, LP and DCP Midstream Partners Finance Corp.
which is part of this Registration Statement.
/s/
Deloitte & Touche LLP
Denver, Colorado
April 20, 2007
exv23w3
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of DCP Midstream
Partners, LP and DCP Midstream Partners Finance Corp. on Form S-3 of our report dated March 14,
2007, relating to the consolidated balance sheet of DCP Midstream, LLC (formerly Duke Energy Field
Services, LLC) as of December 31, 2006 appearing in the Current Report on Form 8-K filed under the
Securities and Exchange Act of 1934 of DCP Midstream Partners, LP dated April 20, 2007 and to the
reference to us under the heading Experts in the Prospectus of DCP Midstream Partners, LP and DCP
Midstream Partners Finance Corp. which is part of this Registration Statement.
/s/
Deloitte & Touche LLP
Denver, Colorado
April 20, 2007