Exhibit 1.1
Execution Copy
ENERGY TRANSFER PARTNERS, L.P.
$350,000,000 8.50% Senior Notes due 2014
$650,000,000 9.00% Senior Notes due 2019
UNDERWRITING AGREEMENT
April 2, 2009
Credit Suisse Securities (USA) LLC
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Greenwich Capital Markets, Inc.
as Representatives of the several Underwriters
c/o
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Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
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Ladies and Gentlemen:
1.
Introductory
. Energy Transfer Partners, L.P., a Delaware limited partnership
(
Partnership
), agrees with the several Underwriters named in
Schedule A
hereto
(
Underwriters
) to issue and sell to the several Underwriters $350,000,000 principal
amount of its 8.50% Senior Notes due 2014 (
2014 Notes
), and $650,000,000 principal amount
of its 9.00% Senior Notes due 2019 (
2019 Notes
and together with the 2014 Notes,
Offered Securities
), to be issued under an indenture, dated as of January 18, 2005, among
the Partnership, the guarantor parties named therein and U.S. Bank National Association (as
successor to Wachovia Bank, National Association), as Trustee, as supplemented through the Closing
Date (
Indenture
). Energy Transfer Partners GP, L.P., a Delaware limited partnership
(
General Partner
), is the general partner of the Partnership. Energy Transfer Partners,
L.L.C., a Delaware limited liability company, is the general partner of the General Partner
(
ETP LLC
). The General Partner, ETP LLC and the Partnership are herein collectively
called the
Partnership Entities
.
2.
Representations and Warranties of the Partnership
. The Partnership represents and warrants
to, and agrees with, the several Underwriters that:
(a)
Filing and Effectiveness of Registration Statement; Certain Defined Terms
. The
Partnership has filed with the Commission an automatic shelf registration statement (as
defined in Rule 405 of the Securities Act) on Form S-3 (No. 333-147990), including a related
prospectus or prospectuses, covering the registration of the offer and
sale of the Offered Securities under the Securities Act, which became effective upon
filing with the Commission.
Registration Statement
at any particular time means
such registration statement in the form then filed with the Commission, including any
amendment thereto, any document incorporated by reference therein and all 430B Information
and all 430C Information with respect to such registration statement, that in
any case has
not been superseded or modified.
Registration Statement
without reference to a
time means the Registration Statement as of the Effective Date. For purposes of this
definition, 430B Information shall be considered to be included in the Registration
Statement as of the time specified in Rule 430B.
For purposes of this Agreement:
430B Information
means information included in a prospectus then deemed to be a part
of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the
Registration Statement pursuant to Rule 430B(f).
430C Information
means information included in a prospectus then deemed to be a part
of the Registration Statement pursuant to Rule 430C.
Applicable Time
means 7:30 p.m. (Eastern time) on the date of this Agreement.
Closing Date
has the meaning defined in Section 3 hereof.
Commission
means the Securities and Exchange Commission.
Effective Date
of the Registration Statement relating to the Offered Securities
means the time of the first contract of sale for the Offered Securities.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Final Prospectus
means the Statutory Prospectus that discloses the public offering
price, other 430B Information and other final terms of the Offered Securities and otherwise
satisfies Section 10(a) of the Securities Act.
General Use Issuer Free Writing Prospectus
means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its being so
specified in
Schedule B
to this Agreement.
Issuer Free Writing Prospectus
means any issuer free writing prospectus, as
defined in Rule 433, relating to the Offered Securities in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the Partnerships
records pursuant to Rule 433(g).
Limited Use Issuer Free Writing Prospectus
means any Issuer Free Writing Prospectus
that is not a General Use Issuer Free Writing Prospectus.
Rules and Regulations
means the rules and regulations of the Commission.
Securities Act
means the Securities Act of 1933, as amended.
Securities Laws
means, collectively, the Sarbanes-Oxley Act of 2002
(
Sarbanes-Oxley
), the Securities Act, the Exchange Act, the Trust Indenture Act, the
Rules and Regulations, the auditing principles, rules, standards and practices applicable to
auditors of
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issuers (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company
Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and the
NASDAQ Stock Market (
Exchange Rules
).
Statutory Prospectus
with reference to any particular time means the prospectus
relating to the Offered Securities that is included in the Registration Statement immediately prior
to that time, including all 430B Information and all 430C Information with respect to the
Registration Statement. For purposes of the foregoing definition, 430B Information shall be
considered to be included in the Statutory Prospectus only as of the actual time that form of
prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b)
and not retroactively.
Trust Indenture Act
means the Trust Indenture Act of 1939, as amended.
Any reference to the Registration Statement, any Statutory Prospectus, any preliminary
prospectus, the Final Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to
and include the documents, if any, incorporated by reference, or deemed to be incorporated by
reference, therein, including, unless the context otherwise requires, the documents, if any, filed
as exhibits to such incorporated documents. Any reference herein to the terms
amend
,
amendment
or
supplement
, with respect to the Registration Statement, any
Statutory Prospectus, any preliminary prospectus, the Final Prospectus or any Issuer Free Writing
Prospectus shall be deemed to refer to and include the filing of any document under the Exchange
Act on or after the initial effective date of the Registration Statement, or the date of such
Statutory Prospectus, such preliminary prospectus, the Final Prospectus or such Issuer Free Writing
Prospectus, as the case may be, and deemed to be incorporated therein by reference. Unless
otherwise specified, a reference to a
rule
is to the indicated rule under the Securities
Act.
(b)
Compliance with Securities Act Requirements
. (i) (A) At the time the Registration
Statement initially became effective, (B) at the time of each amendment thereto for the
purposes of complying with Section 10(a)(3) of the Securities Act (whether by post-effective
amendment, incorporated report or form of prospectus), (C) on the Effective Date relating to
the Offered Securities and (D) on the Closing Date, the Registration Statement conformed and
will conform in all respects to the requirements of the Securities Act, the Trust Indenture
Act and the Rules and Regulations and did not and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of
filing the Final Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final
Prospectus will conform in all respects to the requirements of the Securities Act, the Trust
Indenture Act and the Rules and Regulations, and will not include any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from any such document based upon written information furnished to the
Partnership by any Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information is that described as such in
Section 8(b) hereof.
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(c)
Shelf Registration Statement
. The date of this Agreement is not more than three
years subsequent to the initial effective date of the Registration Statement. If,
immediately prior to the third anniversary of the initial effective date of the Registration
Statement, any of the Offered Securities remain unsold by the Underwriters, the Partnership
will prior to that third anniversary file, if it has not already done so, a new shelf
registration statement relating to the Offered Securities, in a form satisfactory to the
Representatives, will use its best efforts to cause such registration statement to be
declared effective within 180 days after that third anniversary, and will take all other
action necessary or appropriate to permit the public offering and sale of the Offered
Securities to continue as contemplated in the expired registration statement relating to the
Offered Securities. References herein to the Registration Statement shall include such new
shelf registration statement.
(d)
Ineligible Issuer Status; Well-Known Seasoned Issuer
. (i) At the earliest time
after the filing of the Registration Statement that the Partnership or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Offered
Securities and (ii) at the date of this Agreement, the Partnership was not and is not an
ineligible issuer, as defined in Rule 405, including (x) the Partnership or any subsidiary
of the Partnership in the preceding three years not having been convicted of a felony or
misdemeanor or having been made the subject of a judicial or administrative decree or order
as described in Rule 405 and (y) the Partnership in the preceding three years not having
been the subject of a bankruptcy petition or insolvency or similar proceeding, not having
had a registration statement be the subject of a proceeding under Section 8 of the
Securities Act and not being the subject of a proceeding under Section 8A of the Securities
Act in connection with the offering of the Offered Securities, all as described in Rule 405.
The Partnership has been since the time of the initial filing of the Registration
Statement, and continues to be, a well known seasoned issuer as defined in Rule 405,
including not having been an ineligible issuer as defined in Rule 405 at any such time or
date.
(e)
General Disclosure Package
. As of the Applicable Time, neither (i) the General Use
Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time, the
preliminary prospectus supplement, dated April 2, 2009, including the base prospectus, dated
December 11, 2007 (which is the most recent Statutory Prospectus distributed to investors
generally), and the other information, if any, stated in
Schedule B
to this
Agreement to be included in the
General Disclosure Package, all considered together (collectively, the
General
Disclosure Package
), nor (ii) any individual Limited Use Issuer Free Writing
Prospectus, when considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or omissions
from any Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Partnership by any Underwriter through
the Representatives specifically for use therein, it being understood and agreed that the
only such information furnished by any Underwriter consists of the information described as
such in Section 8(b) hereof.
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(f)
Issuer Free Writing Prospectuses
. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale
of the Offered Securities or until any earlier date that the Partnership notified or
notifies the Representatives as described in the next sentence, did not, does not and will
not include any information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement or as a result of which such Issuer
Free Writing Prospectus, if republished immediately following such event or development,
would include an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (i) the Partnership has promptly
notified or will promptly notify the Representatives and (ii) the Partnership has promptly
amended or will promptly amend or supplement such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.
(g)
No Stabilization Activities
. None of the Partnership Entities has taken, directly
or indirectly, any action designed to cause or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Partnership to facilitate
the sale or resale of the Offered Securities.
(h)
Formation and Qualification
. Each of the Partnership Entities and each of the
subsidiaries of the Partnership has been duly formed and is validly existing in good
standing as a corporation, limited liability company or limited partnership under the laws
of its jurisdiction of formation with full corporate, limited liability company or limited
partnership power and authority necessary to own or lease, as the case may be, and to
operate its properties and conduct its business and, in the case of the General Partner and
ETP LLC, to act as general
partner of the Partnership and the General Partner, respectively, in each case in all
material respects as described in the General Disclosure Package and the Final Prospectus,
and is duly qualified to do business as a foreign corporation, limited liability company or
limited partnership, as the case may be, and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to so qualify and
be in good standing would not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole (a
Material Adverse Effect
).
(i)
Ownership of Subsidiaries
. All the outstanding shares of capital stock, limited
liability company interests and partner interests of each of the subsidiaries of the
Partnership, direct and indirect, have been duly authorized and validly issued and are fully
paid (to the extent required under their respective partnership agreement, limited liability
company agreement or other organizational documents) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware Limited Liability Company
Act (the
Delaware LLC Act
), Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act (the
Delaware LP Act
), Section
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5.09 of the Texas Limited Liability
Company Act (the
Texas LLC Act
) or Section 6.07 of the Texas Revised Limited
Partnership Act (the Texas LP Act)); and, except (i) as provided in the Security Agreement
dated June 28, 1996 among Heritage Holdings, Inc., Heritage Operating, L.P., a Delaware
limited partnership (the
Heritage Operating Partnershi
p), and Wilmington Trust
Company (the
Security Agreement
), (ii) for Midcontinent Express Pipeline LLC
(
MEP
) (in which the Partnership indirectly owns a 50% limited liability company
interest) and (iii) as provided in the Fourth Amended and Restated Credit Agreement of
Heritage Operating, L.P., a Delaware limited partnership (the
Heritage Operating
Partnership
) dated as of August 31, 2006, as amended, the Partnership owns all of such
shares and interests, directly or indirectly, free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances. The Partnership,
through its 100%-owned subsidiary Energy Transfer Interstate Holdings LLC, owns a 50%
limited liability company interest in MEP; such limited liability company interest has been
duly authorized and validly issued and is fully paid (to the extent required under the
limited liability company agreement of MEP) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and, except as
encumbered by the provisions of the Security Agreement, Energy Transfer Interstate Holdings
LLC owns such limited liability company interest free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances.
(j)
No Omitted Descriptions
. There is no agreement, contract or other document of a
character required to be described in the General Disclosure Package or the Final
Prospectus, or to be filed as an exhibit to any documents incorporated therein by reference,
which is not described or filed as required; and the statements (i) in the General
Disclosure Package and the Final Prospectus under the headings Description of the Debt
Securities, Description of
Notes and Certain United Stated Federal Income Tax Considerations, (ii) in the
Partnerships Annual Report on Form 10-K for the fiscal year ended December 31, 2008 under
the captions Business Natural Gas Operations Segments Regulation, Business
Environmental Matters, Risk Factors Risks Related to Our Business The FERC is
pursuing legal action against us relating to certain natural gas trading and transportation
activities, and related third party actions have been filed against us and ETE, and Legal
Proceedings, in each case, insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, were accurate and fair summaries of such legal
matters, agreements, documents or proceedings as of the date of each such document.
(k)
Due Authorization of this Agreement
. This Agreement has been duly authorized,
executed and delivered by the Partnership.
(l)
Authority of Partnership
. The Partnership has all requisite limited partnership
power and authority to issue and deliver the Offered Securities in accordance with and upon
the terms and conditions set forth in this Agreement and the Indenture, and to execute,
deliver and perform its obligations under this Agreement, the Indenture and the Offered
Securities.
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(m)
Enforceability of Indenture and Offered Securities
. The execution and delivery of,
and the performance by the Partnership of its obligations under, the Indenture have been
duly and validly authorized by the Partnership, and the Indenture, assuming due
authorization, execution and delivery thereof by the Trustee, when executed and delivered by
the Partnership, will have been duly executed and delivered by the Partnership and will
constitute the valid and legally binding agreements of the Partnership, enforceable against
the Partnership in accordance with its terms;
provided
that the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a proceeding in equity
or at law). The Indenture has been duly qualified under the Trust Indenture Act. The
Offered Securities have been duly authorized for issuance and sale to the Underwriters, and,
when executed by the Partnership and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters, will have
been duly executed and delivered by the Partnership, and will constitute the valid and
legally binding obligations of the Partnership, entitled to the benefits of the Indenture;
provided
that the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting
creditors rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(n)
No Conflicts
. None of the offering, issuance and sale by the Partnership of the
Offered Securities, the execution, delivery and performance of this Agreement, the Indenture
and the Offered Securities by the Partnership, or the consummation of the transactions
contemplated hereby and thereby or the fulfillment of the terms hereof and thereof will
conflict with, result in a breach, default or violation (or an event that, with notice or
lapse of time or both, would constitute such breach, default or violation) or the imposition
of any lien, charge or encumbrance upon any property or assets of the Partnership Entities
or any of the subsidiaries of the Partnership pursuant to (i) the certificate or agreement
of limited partnership, certificate of formation, limited liability company agreement,
certificate or articles of incorporation or bylaws or other organizational documents of any
of the Partnership Entities or any of the subsidiaries of the Partnership, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which any of the
Partnership Entities or any of the Partnerships subsidiaries is a party or bound or to
which any of their respective properties is subject, or (iii) any statute, law, rule or
regulation or any judgment, order or decree applicable to any of the Partnership Entities or
any of the subsidiaries of the Partnership of any court, regulatory body, administrative
agency or governmental body, arbitrator or other authority having jurisdiction over any of
the Partnership Entities or the subsidiaries of the Partnership or any of their properties,
which conflicts, breaches, violations, defaults or liens, in the case of clauses (ii) and
(iii), would, individually or in the aggregate, have a Material Adverse Effect, or could
materially impair the ability of the Partnership to perform its obligations under this
Agreement, the Indenture or the Offered Securities.
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(o)
No Consents
. No permit, consent, approval, authorization, order, registration,
filing or qualification (
consent
) of or with any court, governmental agency or
body is required in connection with the offering, issuance and sale by the Partnership of
the Offered Securities in the manner contemplated herein and in the General Disclosure
Package; the execution, delivery and performance of this Agreement, the Indenture and the
Offered Securities by the Partnership; or the consummation of the transactions contemplated
hereby and thereby, except (i) for such consents as may be required under state securities
or Blue Sky laws, (ii) for such consents that have been, or prior to the Closing Date will
be, obtained, and (iii) for such consents which, if not obtained, would not, individually or
in the aggregate, have a Material Adverse Effect.
(p)
Investment Company
. None of the Partnership Entities or any of the subsidiaries of
the Partnership is now, nor after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the General
Disclosure Package and the Final Prospectus, will be, an investment company as defined in
the Investment Company Act of 1940, as amended.
(q)
No Third Party Defaults
. To the knowledge of the Partnership, no third party to
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which the Partnership or
any of the subsidiaries of the Partnership is a party or bound or to which their respective
properties are subject, is in breach, default or violation under any such agreement (and no
event has occurred that, with notice or lapse of time or otherwise, would constitute such an
event), which breach, default or violation would have a Material Adverse Effect.
(r)
Financial Statements
. At December 31, 2008, the Partnership had on an actual
basis, and would have had, after giving effect to the offering of the Offered Securities on
the pro forma basis indicated in the General Disclosure Package, a capitalization as set
forth therein. The historical financial statements and schedules and the related notes
included or incorporated by reference in the General Disclosure Package present fairly in
all material respects the financial position, results of operations and cash flows of the
entities purported to be shown thereby on the basis stated therein as of the respective
dates or for the respective periods indicated, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, the Exchange Act and the
Rules and Regulations thereunder and have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis (
GAAP
)
throughout the periods involved (except as otherwise noted therein). No other financial
statements are required to be included in the Registration Statement and the General
Disclosure Package pursuant to the applicable accounting requirements of the Securities Act,
the Exchange Act and the Rules and Regulations thereunder.
(s)
Material Change
. Except as disclosed in the General Disclosure Package and the
Final Prospectus, subsequent to the date as of which such information is given in the
General Disclosure Package and the Final Prospectus, (i) none of the Partnership or any of
the subsidiaries of the Partnership has incurred any liability or obligation, indirect,
direct or contingent, or entered into any transactions not in the ordinary course of
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business that, singly or in the aggregate, is material to the Partnership and its
subsidiaries, taken as a whole, (ii) there has not been any material change in the
capitalization or material increase in the short-term or long-term debt of the Partnership
and its subsidiaries and (iii) there has not been any Material Adverse Effect, or any
development involving or which may reasonably be expected to involve, singly or in the
aggregate, a prospective Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business.
(t)
Material Proceedings
. No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any of the Partnership
Entities or any of the subsidiaries of the Partnership or any of their respective property
is pending or, to the knowledge of the Partnership, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance by the Partnership of this
Agreement, the
Indenture or the Offered Securities or the consummation of any of the transactions
contemplated hereby or thereby or (ii) could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the General Disclosure Package and
the Final Prospectus.
(u)
No Omitted Proceedings
. There are no legal or governmental proceedings pending or,
to the knowledge of the Partnership, threatened, against any of the Partnership Entities or
any of their subsidiaries, or to which any of the Partnership Entities or any of the
subsidiaries of the Partnership is a party, or to which any of their respective properties
is subject, that are required to be described in the General Disclosure Package and the
Final Prospectus but are not described as required.
(v)
Title to Property
. The Partnership and its subsidiaries have good and marketable
title to all real property and good title to all personal property described in the General
Disclosure Package and the Final Prospectus as being owned or to be owned by them, free and
clear of any perfected security interest or any other security interests, claims, liens or
encumbrances except (i) as described in the General Disclosure Package and the Final
Prospectus, (ii) pursuant to the Security Agreement, (iii) pursuant to the Fourth Amended
and Restated Credit Agreement of the Heritage Operating Partnership dated August 31, 2006,
as amended, and (iv) such as do not materially interfere with the use of such properties
taken as a whole as described in the General Disclosure Package and the Final Prospectus,
including security interests, claims, liens and encumbrances pursuant to mortgage and/or
security agreements given as security for certain non-compete agreements with the prior
owners of certain businesses previously acquired by the Partnership and its subsidiaries;
provided, that, with respect to title to pipeline rights-of-way, the Partnership represents
only that (A) each applicable subsidiary has sufficient title to enable it to use and occupy
the pipeline rights-of-way as they have been used and occupied in the past and are to be
used and occupied in the future as described in the General Disclosure Package and (B) any
lack of title to the pipeline rights-of-way will not have a Material Adverse Effect; and all
real property and buildings held under lease by the Partnership or any of its subsidiaries
are held under valid and subsisting and enforceable leases with such exceptions as do not
materially interfere with the use of such properties taken as a whole as described in the
General Disclosure Package and the Final Prospectus.
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(w)
No Defaults
. None of the Partnership Entities or the subsidiaries of the
Partnership is in violation or default (and, to the knowledge of the Partnership, no event
has occurred that, with notice or lapse of time or otherwise, would constitute such an
event) of (i) any provision of its certificate or agreement of limited partnership,
certificate of formation, limited liability company agreement, certificate or articles of
incorporation or bylaws or other organizational documents, (ii) the terms of any indenture,
contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which its property
is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over any of the Partnership Entities or such subsidiaries or
any of their respective properties in any material respect, as applicable, which violation
or default would, in the cases of clauses (ii) or (iii), have a Material Adverse Effect, or
could materially impair the ability of the Partnership to perform its obligations under this
Agreement, the Indenture or the Offered Securities.
(x)
Independent Public Accountants
Grant Thornton
. Grant Thornton LLP, who have
audited (i) the consolidated balance sheets of the Partnership and subsidiaries as of
December 31, 2008 and 2007, and the related consolidated statements of operations,
comprehensive income, partners capital, and cash flows for the year ended December 31,
2008, for the four months ended December 31, 2007, and for each of the two years in the
period ended August 31, 2007; (ii) the consolidated balance sheet of the General Partner as
of December 31, 2008; and (iii) the consolidated balance sheet of ETP LLC as of December 31,
2008; are independent public accountants with respect to the Partnership, the General
Partner, ETP LLC and their subsidiaries within the meaning of the Securities Act and the
applicable published Rules and Regulations thereunder.
(y)
Insurance
. The Partnership and the subsidiaries of the Partnership maintain
insurance covering their properties, operations, personnel and businesses against such
losses and risks as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Partnership or the
subsidiaries of the Partnership has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will have to be made in
order to continue such insurance, and all such insurance is outstanding and duly in force on
the date hereof and will be outstanding and duly in force on the Closing Date (except with
respect to those policies for which the failure to be in effect would not have, individually
or in the aggregate, a Material Adverse Effect).
(z)
Permits
. The Partnership and the subsidiaries of the Partnership possess all
licenses, certificates, permits and other authorizations issued by the appropriate foreign,
federal, state or local regulatory authorities necessary to conduct their respective
businesses in the manner described in the General Disclosure Package and the Final
Prospectus, subject to such qualifications as may be set forth in the General Disclosure
Package and the Final Prospectus and except for such licenses, certificates, permits and
other authorizations the failure of which to have obtained would not have, individually or
in the aggregate, a Material Adverse Effect. None of the Partnership or any of the
subsidiaries of the Partnership have received any notice of proceedings relating to the
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revocation or
modification of any such license, certificate, permit or other authorization which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect, except as set forth in or contemplated in the General
Disclosure Package and the Final Prospectus.
(aa)
Disclosure Controls and Procedures
. The Partnership has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act), which (i) are designed to ensure that information required to be disclosed by
the Partnership in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Partnerships management, including its principal
executive and principal financial officers, as appropriate to allow timely decisions
regarding required disclosure, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have been evaluated for
effectiveness as of December 31, 2008 and (iii) were effective, to provide reasonable
assurance regarding the functions for which they were established.
(bb)
Internal Controls
. The Partnership maintains a system of internal controls,
including, but not limited to, disclosure controls and procedures, internal controls over
accounting matters and financial reporting and legal and regulatory compliance controls that
comply with the Securities Laws and are sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with managements general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with managements general or specific
authorization and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Partnership is not aware of (i) any significant deficiency or material
weakness in the design or operation of internal controls which could adversely affect the
Partnerships ability to record, process, summarize and report financial data or any
material weaknesses in internal controls; or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Partnerships
internal controls.
(cc)
No Significant Changes in Internal Controls
. Since December 31, 2008, the most
recent date as of which the Partnership evaluated its disclosure controls and procedures,
there have been no significant changes in the Partnerships internal control over financial
reporting (as defined in Rule 13a-15) or in other factors that have materially affected, or
are reasonably likely to materially affect, the Partnerships internal control over
financial reporting, including any corrective actions with regard to significant
deficiencies and material weaknesses in the Partnerships internal controls.
(dd)
Environmental Compliance
. The Partnership and the subsidiaries of the Partnership
are (i) in compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (
Environmental
Laws
), (ii) have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
11
conduct their respective
businesses as they are currently being conducted and (iii) have not received written notice
of any actual or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in the General Disclosure
Package and the Final Prospectus. Except as set forth in the General Disclosure Package and
the Final Prospectus, none of the Partnership or any of the subsidiaries of the Partnership
has been named as a potentially responsible party under Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (
CERCLA
).
(ee)
No Prohibition of Dividends or Distribution
. No subsidiary of the Partnership is
currently prohibited, directly or indirectly, from paying any dividends to the Partnership,
from making any other distribution on such subsidiarys capital stock or partnership or
limited liability company interests, from repaying to the Partnership any loans or advances
to such subsidiary from the Partnership or from transferring any of such subsidiarys
property or assets to the Partnership or any other subsidiary of the Partnership, except as
described in or contemplated by the General Disclosure Package and the Final Prospectus.
(ff)
Registration Rights
. Except as disclosed in the General Disclosure Package and
the Final Prospectus, there are no contracts, agreements or understandings between the
Partnership and any person granting such person the right to require the Partnership to file
a registration statement under the Securities Act with respect to any securities of the
Partnership owned or to be owned by such person or to require the Partnership to include
such securities in the securities registered pursuant to a Registration Statement.
3.
Purchase, Sale and Delivery of Offered Securities
. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Partnership
agrees to sell to the several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Partnership, the respective principal amounts of the Offered
Securities set forth opposite the names of each of the Underwriters in
Schedule A
hereto at
a purchase price of 99.396% of the principal amount thereof in the case of the 2014 Notes and
99.346% of the principal amount thereof in the case of the 2019 Notes, in each case, plus accrued
interest from April 7, 2009 to the Closing Date (as hereinafter defined).
The Partnership will deliver the Offered Securities to or as instructed by the Representatives
for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives
against payment of the purchase price by the Underwriters in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to the Representatives at
the office of Andrews Kurth LLP, Houston, Texas, at 9:00 a.m., Houston time, on April 7, 2009, or
at such other time not later than seven full business days thereafter as the Representatives and
the Partnership determine, such time being herein referred to as the
Closing Date
. For
purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds
12
and delivery of
securities for all the Offered Securities sold pursuant to the offering. The Offered Securities so
to be delivered or evidence of their issuance will be made available for checking at the above
office of Andrews Kurth LLP at least 24 hours prior to the Closing Date.
4.
Offering by Underwriters
. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in General Disclosure Package and the
Final Prospectus.
5.
Certain Agreements of the Partnership
. The Partnership agrees with the several
Underwriters that:
(a)
Filing of Prospectuses
. The Partnership has filed or will file each Statutory
Prospectus (including the Final Prospectus) pursuant to and in accordance with Rule
424(b)(2) (or, if applicable and consented to by the Representatives, subparagraph (5)) not
later than the second business day following the earlier of the date it is first used or the
execution and delivery of this Agreement. The Partnership has complied and will comply with
Rule 433.
(b)
Filing of Amendments; Response to Commission Requests.
Until the completion of the
public offer and sale of the Offered Securities contemplated hereby, the Partnership will
promptly advise the Representatives of any proposal to amend or supplement the Registration
Statement or any Statutory Prospectus at any time and will offer the Representatives a
reasonable opportunity to comment on any such amendment or supplement; and the Partnership
will also advise the Representatives promptly of (i) the filing of any such amendment or
supplement, (ii) any request by the Commission or its staff for any amendment to the
Registration Statement, for any supplement to any Statutory Prospectus or for any additional
information, (iii) the institution by the Commission of any stop order proceedings in
respect of the Registration Statement or the threatening of any proceeding for that purpose,
and (iv) the receipt by the Partnership of any notification with respect to the suspension
of the qualification of the Offered Securities in any jurisdiction or the institution or
threatening of any proceedings for such purpose. The Partnership will use its best efforts
to prevent the issuance of any such stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal thereof.
(c)
Continued Compliance with Securities Laws
. If, at any time when a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Securities Act by any Underwriter or dealer, any event
occurs as a result of which the Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Registration Statement
or supplement the Final Prospectus to comply with the Securities Act, the Partnership will
promptly notify the Representatives of such event and will promptly prepare and file with
the Commission and furnish, at its own expense, to the Underwriters and the dealers and any
other dealers upon request of the Representatives, an amendment or supplement which will
correct such statement or
13
omission or an amendment which will effect such compliance.
Neither the Representatives consent to, nor the Underwriters delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set forth in
Section 7 hereof.
(d)
Rule 158
. As soon as practicable, but not later than 16 months, after the date of
this Agreement, the Partnership will make generally available to its securityholders an
earnings statement covering a period of at least 12 months beginning after the date of this
Agreement and satisfying the provisions of Section 11(a) of the Securities Act and Rule 158.
(e)
Furnishing of Prospectuses
. The Partnership will furnish to the Representatives
copies of the Registration Statement, including all exhibits, any Statutory Prospectus, the
Final Prospectus and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Representatives reasonably request. The
Partnership will pay the expenses of printing and distributing to the Underwriters all such
documents.
(f)
Blue Sky Qualifications
. The Partnership will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required for the
distribution;
provided
that in no event shall the Partnership be obligated to qualify to do
business in any jurisdiction where it is not now so qualified, to register or qualify as a
dealer in securities or to take any action that would subject it to service of process in
any jurisdiction, other than those arising out of the offering or sale of the Offered
Securities, in any jurisdiction where it is not now so subject.
(g)
Reporting Requirements
. For so long as the Offered Securities remain outstanding,
the Partnership will furnish to the Representatives and, upon request, to each of the other
Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual report to
holders of its limited partnership units for such year; and the Partnership will furnish to
the Representatives (i) as soon as available, a copy of each report and any definitive proxy
statement of the Partnership filed with the Commission under the Exchange Act or mailed to
holders of the Partnerships limited partnership units, and (ii) from time to time, such
other information concerning the Partnership as the Representatives may reasonably request.
However, so long as the Partnership is subject to the reporting requirements of either
Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the
Commission on its Electronic Data Gathering, Analysis and Retrieval system
(
EDGAR
), it is not required to furnish such reports or statements to the
Underwriters.
(h)
Payment of Expenses
. The Partnership will pay all expenses incident to the
performance of its obligations under this Agreement, including but not limited to any filing
fees and other expenses (including fees and disbursements of counsel to the Underwriters)
incurred in connection with qualification of the Offered Securities for sale under the laws
of such jurisdictions as the Representatives designate and the preparation and printing of
memoranda relating thereto, any fees charged by investment rating agencies for the rating of
the Offered Securities, costs and expenses relating to investor
14
presentations or any road
show in connection with the offering and sale of the Offered Securities including, without
limitation, any travel expenses of the Partnerships officers and employees and any other
expenses of the Partnership including the chartering of airplanes, and expenses incurred in
distributing preliminary prospectuses and the Final Prospectus (including any amendments and
supplements thereto) to the Underwriters and for expenses incurred for preparing, printing
and distributing any Issuer Free Writing Prospectuses to investors or prospective investors.
(i)
Use of Proceeds
. The Partnership will use the net proceeds received in connection
with this offering in the manner described in the Use of Proceeds section of the General
Disclosure Package and the Final Prospectus and, except as disclosed in the General
Disclosure Package and the Final Prospectus, the Partnership does not intend to use any of
the proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt
owed to any affiliate of any Underwriter.
(j)
Absence of Manipulation
. The Partnership will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably be expected to
cause or result in, stabilization or manipulation of the price of any securities of the
Partnership to facilitate the sale or resale of the Offered Securities.
(k)
Restriction on Sale of Securities
. The Partnership will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission
a registration statement under the
Securities Act relating to United States dollar-denominated debt securities issued or
guaranteed by the Partnership and having a maturity of more than one year from the date of
issue, or publicly disclose the intention to make any such offer, sale, pledge, disposition
or filing, without the prior written consent of the Representatives for a period beginning
on the date hereof and ending 30 days after the Closing Date.
6.
Free Writing Prospectuses
.
(a)
Issuer Free Writing Prospectuses
. The Partnership represents and agrees that,
unless it obtains the prior consent of the Representatives, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the Partnership and the
Representatives, it has not made and will not make any offer relating to the Offered
Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a free writing prospectus, as defined in Rule 405, required to be filed with
the Commission. Any such free writing prospectus consented to by the Partnership and the
Representatives is hereinafter referred to as a
Permitted Free Writing Prospectus
.
The Partnership represents that it has treated and agrees that it will treat each Permitted
Free Writing Prospectus as an issuer free writing prospectus, as defined in Rule 433, and
has complied and will comply with the requirements of Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where required,
legending and record keeping.
(b)
Term Sheets
. The Partnership will prepare a final term sheet relating to the
Offered Securities, containing only information that describes the final terms of the
15
Offered Securities and otherwise in a form consented to by the Representatives, and will
file such final term sheet within the period required by Rule 433(d)(5)(ii) following the
date such final terms have been established for all classes of the offering of the Offered
Securities. Any such final term sheet is an Issuer Free Writing Prospectus and a Permitted
Free Writing Prospectus for purposes of this Agreement. The Partnership also consents to
the use by any Underwriter of a free writing prospectus that contains only (i)(x)
information describing the preliminary terms of the Offered Securities or their offering,
(y) information permitted by Rule 134, or (z) information that describes the final terms of
the Offered Securities or their offering and that is included in the final term sheet of the
Partnership contemplated in the first sentence of this subsection or (ii) other information
that is not issuer information, as defined in Rule 433, it being understood that any such
free writing prospectus referred to in clause (i) or (ii) above shall not be an Issuer Free
Writing Prospectus for purposes of this Agreement.
7.
Conditions of the Obligations of the Underwriters
. The obligations of the several
Underwriters to purchase and pay for the Offered Securities on the Closing Date will be subject to
the accuracy of the representations and warranties of the Partnership herein (as of the Applicable
Time and as of the Closing Date), to
the accuracy of the statements of Partnership officers made pursuant to the provisions hereof,
to the performance by the Partnership of its obligations hereunder and to the following additional
conditions precedent:
(a)
Accountants Comfort Letters
. At the time of execution of this Agreement, the
Underwriters shall have received from Grant Thornton LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and dated the date hereof
(i) confirming that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given
in the General Disclosure Package and the Final Prospectus, as of a date not more than five
days prior to the date hereof), the conclusions and findings of such firm with respect to
the financial information and other matters ordinarily covered by accountants comfort
letters to underwriters in connection with public offerings of securities.
With respect to the letter of Grant Thornton LLP referred to in the preceding paragraph
and delivered to the Underwriters concurrently with the execution of this Agreement (the
initial letter
), the Partnership shall have furnished to the Underwriters a letter
(the
bring-down letter
) of Grant Thornton LLP, addressed to the Underwriters and
dated the Closing Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the General Disclosure Package and the Final Prospectus,
as of a date not more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information
16
and other
matters covered by the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(b)
Filing of Prospectus
. The Final Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) hereof. No stop
order suspending the effectiveness of the Registration Statement or of any part thereof
shall have been issued and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Partnership or any Underwriter, shall be contemplated by the
Commission.
(c)
No Material Adverse Change
. Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise), results of
operations, business, properties or
prospects of the Partnership and its subsidiaries taken as a whole which, in the
judgment of the Representatives, is material and adverse and makes it impractical or
inadvisable to market the Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Partnership by any nationally recognized statistical rating organization
(as defined for purposes of Rule 436(g)), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities of the
Partnership (other than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or
international financial, political or economic conditions or currency exchange rates or
exchange controls the effect of which is such as to make it, in the judgment of the
Representatives, impractical to market or to enforce contracts for the sale of the Offered
Securities, whether in the primary market or in respect of dealings in the secondary market;
(iv) any suspension or material limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum or maximum prices for trading on such
exchange; (v) or any suspension of trading of any securities of the Partnership on any
exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S.
federal or New York authorities; (vii) any major disruption of settlements of securities,
payment, or clearance services in the United States or (viii) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States, any declaration
of war by Congress or any other national or international calamity or emergency if, in the
judgment of the Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency is such as to make it impractical or inadvisable to
market the Offered Securities or to enforce contracts for the sale of the Offered
Securities.
(d)
Opinion of Counsel for Partnership
. The Underwriters shall have received opinions,
dated the Closing Date, of Vinson & Elkins LLP, counsel for the Partnership, substantially
to the effect set forth in
Exhibit A
.
(e)
Opinion of Counsel for Underwriters
. The Underwriters shall have received from
Andrews Kurth LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Representatives may require, and the Partnership
shall have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
17
(f)
Officers Certificate
. The Underwriters shall have received a certificate, dated
Closing Date, of an executive officer of ETP LLC and a principal financial or accounting
officer of ETP LLC in which such officers shall state that: (i) the representations and
warranties of the Partnership in this Agreement are true and correct; (ii) the Partnership
has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; (iii) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of their knowledge and after reasonable
investigation, are contemplated by the Commission; and (iv) subsequent to the date of the
most recent financial statements in the General Disclosure Package, there has been no
material adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or otherwise), results of operations, business,
properties or prospects of the Partnership and its subsidiaries taken as a whole except as
set forth in the General Disclosure Package and the Final Prospectus.
The Partnership will furnish the Underwriters with such conformed copies of such opinions,
certificates, letters and documents as the Representatives reasonably request. The Representatives
may in their sole discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters hereunder.
8.
Indemnification and Contribution
.
(a)
Indemnification of Underwriters
. The Partnership will indemnify and hold harmless
each Underwriter, its partners, members, directors, officers, employees, agents, affiliates
and each person, if any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, an
Indemnified Party
),
against any and all losses, claims, damages or liabilities, joint or several, to which such
Indemnified Party may become subject, under the Securities Act, the Exchange Act, other
Federal or state statutory law or regulation or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in any part of
the Registration Statement at any time, any Statutory Prospectus (which term includes any
base prospectus and any preliminary prospectus supplement) as of any time, the Final
Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each Indemnified Party for
any legal or other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending against any loss, claim, damage, liability, action, litigation,
investigation or proceeding whatsoever (whether or not such Indemnified Party is a party
thereto), whether threatened or commenced, and in connection with the enforcement of this
provision with respect to any of the above as such expenses are incurred;
provided, however
,
that the Partnership will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents in reliance
upon and in conformity with written information furnished to the Partnership by any
Underwriter through the Representatives
18
specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
(b)
Indemnification of Partnership
. Each Underwriter will severally and not jointly
indemnify and hold harmless the Partnership, each of its directors and each of its officers
who signs a Registration Statement and each person, if any, who controls the Partnership
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, an
Underwriter Indemnified Party
), against any losses, claims, damages or
liabilities to which such Underwriter Indemnified Party may become subject, under the
Securities Act, the Exchange Act, other Federal or state statutory law or regulation or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any part of the Registration Statement at any time, any
Statutory Prospectus (which term includes any base prospectus and any preliminary prospectus
supplement) as of any time, the Final Prospectus, or any Issuer Free Writing Prospectus, or
arise out of or are based upon the omission or the alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Partnership by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by such Underwriter Indemnified Party in connection with investigating
or defending against any such loss, claim, damage, liability, action, litigation,
investigation or proceeding whatsoever (whether or not such Underwriter Indemnified Party is
a party thereto), whether threatened or commenced, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission as such expenses are incurred, it
being understood and agreed that the only such information furnished by any Underwriter
consists of the following information in the Final Prospectus furnished on behalf of each
Underwriter: (i) the concession and reallowance figures appearing in the fourth paragraph
under the caption Underwriting and (ii) the information contained in the sixth paragraph
under the caption Underwriting.
(c)
Actions against Parties; Notification
. Promptly after receipt by an indemnified
party under this Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but
the failure to notify the indemnifying party shall not relieve it from any liability that it
may have under subsection (a) or (b) above except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and
provided further
that the failure to notify the indemnifying party shall not relieve it from
any liability that it may have to an indemnified party otherwise than under subsection (a)
or (b) above. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly
19
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation.
Notwithstanding the indemnifying partys election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any claims that are
the subject matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an indemnified
party.
(d)
Contribution
. If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or (b) above,
then each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Partnership on the one hand and the Underwriters on the other from
the offering of the Offered Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault
of the Partnership on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits received by the
Partnership on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Partnership bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Partnership or the Underwriters and the parties relative
20
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the amount by which
the total underwriting discounts and commissions received by such Underwriter with respect
to the offering of the Offered Securities exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint. The Partnership and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 8(d).
9.
Default of Underwriters
. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on the Closing Date and the aggregate principal amount of
Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount of Offered Securities that the Underwriters are
obligated to purchase on such Closing Date, the Representatives may make arrangements satisfactory
to the Partnership for the purchase of such Offered Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase
on such Closing Date. If any Underwriter or Underwriters so default and the aggregate principal
amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities that the Underwriters are obligated to purchase on
such Closing Date and arrangements satisfactory to the Representatives and the Partnership for the
purchase of such Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Partnership, except as provided in Section 10. As used in this Agreement, the
term Underwriter includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
10.
Survival of Certain Representations and Obligations
. The respective indemnities,
agreements, representations, warranties and other statements of the Partnership or its officers and
of the several Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter, the Partnership or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of and payment for the
Offered
21
Securities. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this Agreement pursuant
to Section 9 hereof, the Partnership will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities, and the respective obligations of the Partnership and the
Underwriters pursuant to Sections 5(h) and 8 hereof shall remain in effect. In addition, if any
Offered Securities have been purchased hereunder, the representations and warranties in Section 2
and all obligations under Section 5 shall also remain in effect.
11.
Notices
. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or faxed and confirmed to the Representatives, c/o Credit
Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010; Attention: LCD-IBD,
Fax No. (212) 322-1904, or, if sent to the Partnership, will be mailed, delivered or faxed and
confirmed to it at Energy Transfer Partners, L.P., 3738 Oak Lawn Avenue, Dallas, Texas 75219,
Attention: General Counsel, Fax No. (214) 981-0701;
provided, however
, that any notice to an
Underwriter pursuant to Section 8 will be mailed, delivered or faxed and confirmed to such
Underwriter.
12.
Successors
. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and controlling persons
referred to in Section 8, and no other person will have any right or obligation hereunder.
13.
Representation of Underwriters
. The Representatives will act for the several Underwriters
in connection with this financing, and any action under this Agreement taken by the Representatives
will be binding upon all the Underwriters.
14.
Counterparts
. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the
same Agreement.
15.
Absence of Fiduciary Relationship
. The Partnership acknowledges and agrees that:
(a)
No Other Relationship
. The Underwriters have been retained solely to act as
underwriters in connection with the sale of Offered Securities and that no fiduciary,
advisory or agency relationship between the Partnership and the Underwriters has been
created in respect of any of the transactions contemplated by this Agreement or the Final
Prospectus, irrespective of whether the Underwriters have advised or are advising the
Partnership on other matters;
(b)
Arms Length Negotiations
. The price of the Offered Securities set forth in this
Agreement was established by the Partnership following discussions and arms-length
negotiations with the Representatives, and the Partnership is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c)
Absence of Obligation to Disclose
. The Partnership has been advised that the
Underwriters and their affiliates are engaged in a broad range of transactions which
22
may
involve interests that differ from those of the Partnership and that the Underwriters have
no obligation to disclose such interests and transactions to the Partnership by virtue of
any fiduciary, advisory or agency relationship; and
(d)
Waiver
. The Partnership waives, to the fullest extent permitted by law, any claims
it may have against the Underwriters for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or
indirect) to the Partnership in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the Partnership, including
unitholders, employees or creditors of the Partnership.
16.
Applicable
Law
. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York
.
The Partnership hereby submits to the non-exclusive jurisdiction of the Federal and state
courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. The Partnership irrevocably
and unconditionally waives any objection to the laying of venue of any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby in Federal and state
courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit or proceeding in any
such court has been brought in an inconvenient forum.
(Reminder of Page Intentionally Left Blank)
23
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Partnership and the several Underwriters.
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Very truly yours,
ENERGY TRANSFER PARTNERS, L.P.
By: ENERGY TRANSFER PARTNERS GP, L.P.
Its: General Partner
By: ENERGY TRANSFER PARTNERS, L.L.C.
Its: General Partner
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By:
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/s/ Thomas P. Mason
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Name:
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Thomas P. Mason
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Title:
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Vice President, General Counsel and Secretary
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The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CREDIT SUISSE SECURITIES (USA) LLC
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
GREENWICH CAPITAL MARKETS, INC.
Acting on behalf of themselves and as the Representatives of the several Underwriters
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By: CREDIT SUISSE SECURITIES (USA) LLC
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By:
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/s/ Michael Cannon
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Name:
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Michael Cannon
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Title:
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Managing Director
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By: J.P. MORGAN SECURITIES INC.
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By:
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/s/ Robert Bottamedi
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Name:
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Robert Bottamedi
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Title:
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Vice President
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By: MORGAN STANLEY & CO. INCORPORATED
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By:
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/s/ Yurij Slyz
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Name:
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Yurij Slyz
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Title:
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Vice President
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By: GREENWICH CAPITAL MARKETS, INC.
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By:
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/s/ Okwudiri Onyedum
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Name:
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Okwudiri Onyedum
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Title:
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Senior Vice President
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SCHEDULE A
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Principal
|
|
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Principal
|
|
|
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Amount of
|
|
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Amount of
|
|
Underwriter
|
|
2014 Notes
|
|
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2019 Notes
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse Securities (USA) LLC
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|
$
|
70,000,000
|
|
|
$
|
130,000,000
|
|
J.P. Morgan Securities Inc.
|
|
|
70,000,000
|
|
|
|
130,000,000
|
|
Morgan Stanley & Co. Incorporated
|
|
|
70,000,000
|
|
|
|
130,000,000
|
|
Greenwich Capital Markets, Inc.
|
|
|
70,000,000
|
|
|
|
130,000,000
|
|
BNP Paribas Securities Corp.
|
|
|
35,000,000
|
|
|
|
65,000,000
|
|
Deutsche Bank Securities Inc.
|
|
|
35,000,000
|
|
|
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65,000,000
|
|
|
|
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Total
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$
|
350,000,000
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|
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$
|
650,000,000
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SCHEDULE B
1. General Use Free Writing Prospectuses (included in the General Disclosure Package)
General Use Issuer Free Writing Prospectus includes the following document:
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1.
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Final term sheet, dated April 2, 2009, for the
Offered Securities.
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2. Other Information Included in the General Disclosure Package
The following information is also included in the General Disclosure Package:
None
EXHIBIT A
Form of Opinion of Vinson & Elkins LLP
April 7, 2009
Credit Suisse Securities (USA) LLC
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Greenwich Capital Markets, Inc.
as Representatives of the several Underwriters
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c/o
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Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
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Ladies and Gentlemen:
This opinion is provided to you pursuant to Section 7(d) of the Underwriting Agreement, dated
April 2, 2009 (the Underwriting Agreement), by and among Energy Transfer Partners, L.P., a
Delaware limited partnership (the Partnership), and the underwriters named therein (collectively,
the Underwriters), in connection with the offer and sale by the Partnership of $350,000,000
aggregate principal amount of its 8.50% Senior Notes due 2014, and $650,000,000 aggregate principal
amount of its 9.00% Senior Notes due 2019 (the Notes). Any capitalized term used in this opinion
and not defined herein shall have the meaning assigned to such term in the Underwriting Agreement.
We have acted as counsel to the Partnership in connection with the offer and sale by the
Partnership of the Notes. In connection with the opinions expressed below, we have examined the
following:
(i) executed originals or counterparts of the Underwriting Agreement, the Indenture, dated as
of January 15, 2005 (the Original Indenture), by and among the Partnership, certain subsidiary
guarantors named therein and U.S. Bank National Association, as successor to Wachovia Bank,
National Association, as trustee (the Trustee) and the Eighth Supplemental Indenture dated as of
April 7, 2009 (the Supplemental Indenture) and a global certificate representing the Notes;
(ii) executed originals or counterparts of the organizational documents of the Partnership;
(iii) a copy of the Certificate of Limited Partnership for the Partnership as filed with the
Secretary of State of the State of Delaware;
(iv) copies of resolutions duly adopted by the Board of Directors and the Pricing Committee of
Energy Transfer Partners, LLC (ETP LLC) as general partner of the general partner of the
Partnership, certified as of the date hereof by the Secretary of ETP LLC;
(v) the Registration Statement, the General Disclosure Package and the Final Prospectus;
A-1
(vi) evidence satisfactory to us of the effectiveness of the Registration Statement under the
Act; and
(vii) such other documents and records as we have deemed necessary or advisable for purposes
of the opinions expressed below.
The Underwriting Agreement, the Original Indenture, the Supplemental Indenture and the Notes
are hereinafter collectively referred to as the Transaction Documents.
Based upon the foregoing, and subject to the qualifications and limitations set forth below,
we are of the opinion that:
1. The Partnership is validly existing in good standing as a limited partnership under the
laws of the State of Delaware with all requisite limited partnership power and authority under the
laws of the State of Delaware to own or lease its properties and conduct its business, in each case
in all material respects as described in the General Disclosure Package and the Final Prospectus.
2. The Partnership has all requisite limited partnership power and authority to issue, sell
and deliver the Notes in accordance with and upon the terms and conditions set forth in the
Transaction Documents, and to execute, deliver, incur and perform its respective obligations under
the Transaction Documents.
3. The Underwriting Agreement has been duly authorized, executed and delivered by the
Partnership.
4. Each of the Original Indenture and the Supplemental Indenture has been duly authorized by
all necessary limited partnership action, executed and delivered by the Partnership and constitutes
a valid and binding obligation of the Partnership enforceable against the Partnership in accordance
with its terms. The Indenture has been duly qualified under the Trust Indenture Act.
5. The Notes have been duly authorized by all necessary limited partnership action, executed
and delivered by the Partnership and when authenticated by the Trustee in accordance with the terms
of the Original Indenture and delivered against payment therefor will constitute valid and binding
obligations of the Partnership, enforceable against the Partnership in accordance with their terms,
and are entitled to the benefits of the Original Indenture and the Supplemental Indenture.
6. The execution and delivery by the Partnership of, and the incurrence and performance of its
obligations under, the Transaction Documents (A) will not violate (i) any Federal, Texas or New
York law (it being understood and agreed that in this paragraph 6, we express no opinion with
respect to federal or state securities laws), (ii) the Delaware Revised Uniform Limited Partnership
Act or the Delaware Limited Liability Company Act, or (iii) any applicable governmental order
identified to us by the Partnership as being material to the
Partnership, (B) will not violate the certificate of limited partnership and agreement of
limited partnership of the Partnership, and (C) will not constitute a breach or violation of, or a
default (or an event which, with notice or lapse of time or both, would constitute such a default),
or result in
A-2
the creation of any security interest in, or lien upon, any of the property or assets
of the Partnership or any of its subsidiaries under any agreement listed as an exhibit to the
Partnerships (1) Annual Report on Form 10-K for the fiscal year ended December 31, 2008, or (2)
any Current Report on Form 8-K filed after December 31, 2008 and prior to the date hereof, except
in the case of (A) or (C), for such matters that would not individually or in the aggregate, have a
material adverse effect on the Partnership and its subsidiaries, taken as a whole.
7. No consent, license, filing, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the issuance and sale of the Notes, the execution
and delivery by the Partnership of, and the performance by the Partnership of its respective
obligations under the Transaction Documents, except (i) as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of the Notes, (ii) those
consents, licenses, filings, authorizations, approvals, orders, exemptions and other actions that
have been obtained or taken, and any filings that have been made, as of the date hereof, or (iii)
where the failure to obtain, take or make such consent, approval, authorization, order,
qualification, action or filing would not, either individually or in the aggregate, have a material
adverse effect on the Partnership and its subsidiaries, taken as a whole.
8. The statements in the General Disclosure Package and the Final Prospectus under the caption
Description of the Notes and Description of the Debt Securities insofar as such statements are
summaries of the documents referred to therein, constitute accurate summaries in all material
respects of the documents referred to therein, and the Notes and the Original Indenture and the
Supplemental Indenture conform in all material respects to the descriptions thereof contained in
the General Disclosure Package and the Final Prospectus under the heading Description of the
Notes and Description of the Debt Securities.
9. Subject to the qualifications and limitations therein, the statements in the General
Disclosure Package and the Final Prospectus under the caption Certain United States Federal Income
Tax Considerations insofar as such statements are a summary of the United States federal tax laws
referred to therein, constitute accurate summaries in all material respects of the matters therein
described.
10. The Partnership is not an investment company within the meaning of the Investment
Company Act of 1940, as amended.
11. The Registration Statement has become effective under the Securities Act, the Final
Prospectus was filed with the Commission pursuant to the subparagraph (2) of Rule 424(b), the final
term sheet dated December 18, 2008 described in Schedule B of the Underwriting Agreement was filed
with the Commission pursuant to Rule 433 in accordance with Rule 433(d) and, to the best of our
knowledge, no stop order suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act; The Registration Statement, as of the Effective Date, and
the Final Prospectus, as of its date and the date hereof, (except in
such case for the financial statements and the notes and financial schedules and other
financial, statistical and accounting data included therein, as to which we do not express an
opinion)
A-3
appeared on their face to comply as to form in all material respects with the requirements
of the Securities Act and the Rules and Regulations.
In rendering the opinions expressed herein, we have:
(a) relied, without independent investigation or verification, with respect to matters of
fact, upon certificates of officers of ETP LLC and information obtained from public officials;
(b) assumed that all documents submitted to us as originals are authentic, that all copies
submitted to us conform to the originals thereof, and that the signatures on all documents examined
by us are genuine; and
(c) assumed that each certificate from governmental officials reviewed by us is accurate,
complete and authentic, and all official public records are accurate and complete.
Because we have not conducted any independent investigation or verification with regard to the
information set forth in the Registration Statement, the General Disclosure Package or the Final
Prospectus (except with respect to the opinions set forth in paragraphs (8) and (9) above), we are
not (except as aforesaid) passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained therein. We have participated, however, in
conferences with officers and other representatives of the Partnership, representatives of the
independent public accountants of the Partnership and your representatives, at which the contents
of the Registration Statement, the General Disclosure Package and the Final Prospectus and related
matters were discussed. Based on the foregoing participation (relying as to factual matters in
respect of the determination of materiality to a significant extent upon the statements of fact
made by officers and other representatives of the Partnership), no facts have come to our attention
that lead us to believe that (a) the Registration Statement, as of the Effective Date, contained
any untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading; (b) the Final
Prospectus, as of its date or as of the Closing Date, contained or contains an untrue statement of
a material fact or omitted or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
or (c) the General Disclosure Package, as of the Applicable Time, contained any untrue statement of
a material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. We,
however, express no opinion with respect to the financial statements and notes and related
schedules and other related financial and accounting data included in the Registration Statement,
General Disclosure Package or the Final Prospectus or with respect to the Form T-1 of the Trustee.
We express no opinion as to the enforceability of any provisions of the Original Indenture,
the Supplemental Indenture or the Notes to the extent relating to: (i) any failure to comply with
requirements concerning notices, relating to delay or omission to enforce rights or remedies or
purporting to waive or affect rights, claims, defenses or other benefits to the extent that any of
the same cannot be waived or so affected under applicable law; (ii) indemnification to
the extent it relates to any violation of federal or state securities laws; (iii) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or
A-4
hereafter
in effect relating to or affecting creditors rights generally; or (iv) general principles of
equity (regardless of whether such enforcement is considered in a proceeding at law or in equity)
and an implied covenant of good faith and fair dealing.
Our opinion is limited to matters governed by the federal laws of the United States of America
to the extent specifically referred to herein, the Delaware Revised Uniform Limited Partnership
Act, the Limited Liability Company Act of the State of Delaware, the laws of the State of Texas and
the laws of the State of New York, and we express no opinion as to the law of any other
jurisdiction. We do not express any opinion with respect to (i) state or local taxes or tax
statutes to which any of the limited partners of the Partnership or the Partnership or any of its
subsidiaries may be subject or (ii) state or federal anti-fraud laws or regulations. We also do
not express any opinion with respect to laws relating to or promulgated by the Federal Energy
Regulatory Commission.
This opinion letter is furnished to you solely for your benefit pursuant to Section 7(d) of
the Underwriting Agreement. This letter and the opinions expressed herein may not be used or
relied upon by you for any other purpose and may not be used or relied upon for any purpose by any
other person or entity without our prior written consent. This letter is not to be quoted or
reproduced in whole or in part or otherwise referred to in any manner nor is it to be filed with
any governmental agency or delivered to any other person without our prior written consent. This
opinion speaks as of its date, and we undertake no (and hereby disclaim any) obligation to update
this opinion.
Very truly yours,
A-5
Exhibit 4.2
ENERGY TRANSFER PARTNERS, L.P.,
as Issuer,
and
U.S. BANK NATIONAL ASSOCIATION
(AS SUCCESSOR TO
WACHOVIA BANK, NATIONAL ASSOCIATION),
as Trustee
EIGHTH SUPPLEMENTAL INDENTURE
Dated as of April 7, 2009
to
Indenture dated as of January 18, 2005
8.50% Senior Notes due 2014
9.00% Senior Notes due 2019
Table of Contents
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ARTICLE I DEFINITIONS
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1
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SECTION 1.1
Generally
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1
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SECTION 1.2
Definition of Certain Terms
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2
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ARTICLE II GENERAL TERMS OF THE NOTES
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6
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SECTION 2.1
Form
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6
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SECTION 2.2
Title, Amount and Payment of Principal and Interest
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7
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SECTION 2.3
Transfer and Exchange
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8
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ARTICLE III FUTURE SUBSIDIARY GUARANTEES
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8
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SECTION 3.1
No Initial Guarantee of the Notes by Subsidiary Guarantors
|
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8
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SECTION 3.2
Future Subsidiary Guarantors
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8
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SECTION 3.3
Release of Guarantees
|
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9
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SECTION 3.4
Reinstatement of Guarantees
|
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9
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ARTICLE IV REDEMPTION
|
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9
|
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SECTION 4.1
Redemption
|
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9
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ARTICLE V ADDITIONAL COVENANTS
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10
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SECTION 5.1
Limitation on Liens
|
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10
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SECTION 5.2
Restriction on Sale-Leasebacks
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10
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ARTICLE VI ADDITIONAL EVENT OF DEFAULT
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11
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SECTION 6.1
Additional Event of Default
|
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11
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ARTICLE VII MISCELLANEOUS PROVISIONS
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11
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SECTION 7.1
Ratification of Base Indenture
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11
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SECTION 7.2
Trustee Not Responsible for Recitals
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11
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SECTION 7.3
Table of Contents, Headings, etc.
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12
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SECTION 7.4
Counterpart Originals
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12
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SECTION 7.5
Governing Law
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12
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i
THIS EIGHTH SUPPLEMENTAL INDENTURE dated as of April 7, 2009 (the Eighth Supplemental
Indenture), is among Energy Transfer Partners, L.P., a Delaware limited partnership (the
Partnership), and U.S. Bank National Association, a national banking association, as successor to
Wachovia Bank, National Association, a national banking association, as trustee (the Trustee).
RECITALS:
WHEREAS, the Partnership and certain Subsidiary Guarantors have executed and delivered to the
Trustee an Indenture, dated January 18, 2005 (the Base Indenture and as supplemented by this
Eighth Supplemental Indenture, the Indenture), providing for the issuance by the Partnership from
time to time of its debentures, notes, bonds or other evidences of indebtedness to be issued in one
or more series unlimited as to principal amount (the Debt Securities);
WHEREAS, the Partnership has duly authorized and desires to cause to be established pursuant
to the Base Indenture and this Eighth Supplemental Indenture two new series of Debt Securities
designated the 8.50% Senior Notes due 2014 (the 2014 Notes) and the 9.00% Senior Notes due
2019 (the 2019 Notes and together with the 2014 Notes, the Notes);
WHEREAS, Sections 2.01 and 2.04 of the Base Indenture permit the execution of indentures
supplemental thereto to establish the form and terms of Debt Securities of any series;
WHEREAS, pursuant to Section 9.01 of the Base Indenture, the Partnership has requested that
the Trustee join in the execution of this Eighth Supplemental Indenture to establish the form and
terms of the Notes;
WHEREAS, all things necessary have been done to make the Notes, when executed by the
Partnership and authenticated and delivered hereunder and under the Base Indenture and duly issued
by the Partnership, the valid obligations of the Partnership, and to make this Eighth Supplemental
Indenture a valid agreement of the Partnership enforceable in accordance with its terms.
NOW, THEREFORE, the Partnership and the Trustee hereby agree that the following provisions
shall supplement the Base Indenture:
ARTICLE I
DEFINITIONS
SECTION 1.1
Generally
.
(a) Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings ascribed thereto in the Base Indenture.
(b) The rules of interpretation set forth in the Base Indenture shall be applied hereto as if
set forth in full herein.
1
SECTION 1.2
Definition of Certain Terms
.
For all purposes of this Eighth Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires, the following terms shall have the following respective
meanings:
Attributable Indebtedness, when used with respect to any Sale-Leaseback Transaction (as
defined in Section 5.2 hereof), means, as at the time of determination, the present value
(discounted at the rate set forth or implicit in the terms of the lease included in such
transaction) of the total obligations of the lessee for rental payments (other than amounts
required to be paid on account of property taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items that do not constitute payments for property
rights) during the remaining term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended). In the case of any lease that is
terminable by the lessee upon the payment of a penalty or other termination payment, such amount
shall be the lesser of the amount determined assuming termination upon the first date such lease
may be terminated (in which case the amount shall also include the amount of the penalty or
termination payment, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the amount determined assuming
no such termination.
Comparable Treasury Issue means the United States Treasury security selected by the
Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to
be redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Notes to be redeemed;
provided, however
, that if no maturity is within
three months before or after the maturity date for such Notes, yields for the two published
maturities most closely corresponding to such United States Treasury security will be determined
and the treasury rate will be interpolated or extrapolated from those yields on a straight line
basis rounding to the nearest month.
Comparable Treasury Price means, with respect to any Redemption Date, (a) the average of the
Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (b) if the Independent Investment Banker obtains
fewer than four Reference Treasury Dealer Quotations, the average of all such quotations.
Consolidated Net Tangible Assets means, at any date of determination, the total amount of
assets of the Partnership and its consolidated Subsidiaries after deducting therefrom:
(1) all current liabilities (excluding (A) any current liabilities that by their terms are
extendable or renewable at the option of the obligor thereon to a time more than twelve months
after the time as of which the amount thereof is being computed, and (B) current maturities of
long-term debt); and
(2) the value (net of any applicable reserves) of all goodwill, trade names, trademarks,
patents and other like intangible assets,
2
all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of
the Partnership and its consolidated Subsidiaries for the Partnerships most recently completed
fiscal quarter for which financial statements have been filed with the SEC, prepared in accordance
with generally accepted accounting principles.
Credit Agreement means the Amended and Restated Credit Agreement, dated as of July 20, 2007,
among the Partnership, Wachovia Bank, National Association, as Administrative Agent, and the other
agents and lenders party thereto and as further amended, restated, refinanced, replaced or refunded
from time to time.
Indebtedness of any Person at any date means any obligation created or assumed by such
Person for the repayment of borrowed money or any guaranty thereof.
Independent Investment Banker means Credit Suisse Securities (USA) LLC, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated or Greenwich Capital Markets, Inc. (and their
respective successors) or, if any such firm is not willing and able to select the applicable
Comparable Treasury Issue, an independent investment banking institution of national standing
appointed by the Trustee and reasonably acceptable to the Partnership.
Permitted Liens means:
(1) liens upon rights-of-way for pipeline purposes;
(2) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business and encumbrances consisting of zoning restrictions, easements,
licenses, restrictions on the use of real property or minor imperfections in title thereto and
which do not in the aggregate materially adversely affect the value of the properties encumbered
thereby or materially impair their use in the operation of the business of the Partnership and its
Subsidiaries;
(3) rights reserved to or vested by any provision of law in any municipality or public
authority to control or regulate any of the properties of the Partnership or any Subsidiary or the
use thereof or the rights and interests of the Partnership or any Subsidiary therein, in any manner
under any and all laws;
(4) rights reserved to the grantors of any properties of the Partnership or any Subsidiary,
and the restrictions, conditions, restrictive covenants and limitations, in respect thereto,
pursuant to the terms, conditions and provisions of any rights-of-way agreements, contracts or
other agreements therewith;
(5) any statutory or governmental lien or lien arising by operation of law, or any mechanics,
repairmens, materialmens, suppliers, carriers, landlords, warehousemens or similar lien
incurred in the ordinary course of business which is not more than sixty (60) days past due or
which is being contested in good faith by appropriate proceedings and any undetermined lien which
is incidental to construction, development, improvement or repair;
3
(6) any right reserved to, or vested in, any municipality or public authority by the terms of
any right, power, franchise, grant, license, permit or by any provision of law, to purchase or
recapture or to designate a purchaser of, any property;
(7) liens for taxes and assessments which are (a) for the then current year, (b) not at the
time delinquent, or (c) delinquent but the validity or amount of which is being contested at the
time by the Partnership or any of its Subsidiaries in good faith by appropriate proceedings;
(8) liens of, or to secure performance of, leases, other than capital leases;
(9) any lien in favor of the Partnership or any Subsidiary;
(10) any lien upon any property or assets of the Partnership or any Subsidiary in existence on
the date of the initial issuance of the Notes;
(11) any lien incurred in the ordinary course of business in connection with workmens
compensation, unemployment insurance, temporary disability, social security, retiree health or
similar laws or regulations or to secure obligations imposed by statute or governmental
regulations;
(12) liens in favor of any Person to secure obligations under provisions of any letters of
credit, bank guarantees, bonds or surety obligations required or requested by any governmental
authority in connection with any contract or statute, provided that such obligations do not
constitute Indebtedness; or any lien upon or deposits of any assets to secure performance of bids,
trade contracts, leases or statutory obligations, and other obligations of a like nature incurred
in the ordinary course of business;
(13) any lien upon any property or assets created at the time of acquisition of such property
or assets by the Partnership or any of its Subsidiaries or within one year after such time to
secure all or a portion of the purchase price for such property or assets or debt incurred to
finance such purchase price, whether such debt was incurred prior to, at the time of or within one
year after the date of such acquisition;
(14) any lien upon any property or assets to secure all or part of the cost of construction,
development, repair or improvements thereon or to secure Indebtedness incurred prior to, at the
time of, or within one year after completion of such construction, development, repair or
improvements or the commencement of full operations thereof (whichever is later), to provide funds
for any such purpose;
(15) any lien upon any property or assets existing thereon at the time of the acquisition
thereof by the Partnership or any of its Subsidiaries and any lien upon any property or assets of a
Person existing thereon at the time such Person becomes a Subsidiary of the Partnership by
acquisition, merger or otherwise;
provided
that, in each case, such lien only encumbers the
property or assets so acquired or owned by such Person at the time such Person becomes a
Subsidiary;
(16) liens imposed by law or order as a result of any proceeding before any court or
regulatory body that is being contested in good faith, and liens which secure a judgment or other
4
court-ordered award or settlement as to which the Partnership or the applicable Subsidiary has
not exhausted its appellate rights;
(17) any extension, renewal, refinancing, refunding or replacement (or successive extensions,
renewals, refinancing, refunding or replacements) of liens, in whole or in part, referred to in
clauses (1) through (16) above;
provided, however
, that any such extension, renewal, refinancing,
refunding or replacement lien shall be limited to the property or assets covered by the lien
extended, renewed, refinanced, refunded or replaced and that the obligations secured by any such
extension, renewal, refinancing, refunding or replacement lien shall be in an amount not greater
than the amount of the obligations secured by the lien extended, renewed, refinanced, refunded or
replaced and any expenses of the Partnership or its Subsidiaries (including any premium) incurred
in connection with such extension, renewal, refinancing, refunding or replacement; or
(18) any lien resulting from the deposit of moneys or evidence of indebtedness in trust for
the purpose of defeasing Indebtedness of the Partnership or any of its Subsidiaries.
Principal Property means, whether owned or leased on the date hereof or thereafter acquired:
(1) any pipeline assets of the Partnership or any of its Subsidiaries, including any related
facilities employed in the gathering, transportation, distribution, storage or marketing of natural
gas, refined petroleum products, natural gas liquids and petrochemicals, that are located in the
United States of America or any territory or political subdivision thereof; and
(2) any processing, compression, treating, blending or manufacturing plant or terminal owned
or leased by the Partnership or any of its Subsidiaries that is located in the United States or any
territory or political subdivision thereof, except in the case of either of the preceding clauses
(1) or (2):
(a) any such assets consisting of inventories, furniture, office fixtures and equipment
(including data processing equipment), vehicles and equipment used on, or useful with,
vehicles;
(b) any such assets which, in the opinion of the board of directors of the General
Partner are not material in relation to the activities of the Partnership and its
Subsidiaries taken as a whole; and
(c) any assets used primarily in the conduct of the retail propane marketing business
conducted by Heritage Operating, L.P. and its Subsidiaries.
Reference Treasury Dealer means (a) each of Credit Suisse Securities (USA) LLC, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, Greenwich Capital Markets, Inc. (or its
relevant affiliate) and their respective successors, and (b) one other primary U.S. government
securities dealer in the United States selected by the Partnership (each, a Primary Treasury
Dealer);
provided, however
, that if any of the foregoing shall resign as a Reference Treasury
Dealer or cease to be a U.S. government securities dealer, the Partnership will substitute therefor
another Primary Treasury Dealer.
5
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer
and any Redemption Date for the Notes, an average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury Issue for the Notes to be redeemed
(expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
Restricted Subsidiary means any Subsidiary owning or leasing, directly or indirectly through
ownership in another Subsidiary, any Principal Property.
Subsidiary Guarantor means, with respect to the Notes and notwithstanding the definition
thereof in the Base Indenture, each Subsidiary of the Partnership that guarantees the Notes
pursuant to the terms of the Indenture, but only so long as such Subsidiary is a guarantor of the
Notes on the terms provided in the Indenture.
Treasury Yield means, with respect to any Redemption Date applicable to the Notes, (a) the
yield, under the heading which represents the average for the immediately preceding week, appearing
in the most recently published statistical release designated H.15(519) or any successor
publication which is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption Treasury Constant Maturities, for the maturity corresponding to the
Comparable Treasury Issue; or (b) if the release (or any successor release) is not published during
the week preceding the calculation date or does not contain these yields, the rate per annum equal
to the semi-annual equivalent yield to maturity (computed as of the third Business Day immediately
preceding such Redemption Date) of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such Redemption Date.
ARTICLE II
GENERAL TERMS OF THE NOTES
SECTION 2.1
Form
.
The 2014 Notes and the 2019 Notes and the Trustees certificates of authentication shall be
substantially in the form of Exhibit A-1 and Exhibit A-2, respectively, to this Eighth Supplemental
Indenture, which are hereby incorporated into this Eighth Supplemental Indenture. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this
Eighth Supplemental Indenture and to the extent applicable, the Partnership and the Trustee, by
their execution and delivery of this Eighth Supplemental Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Each series of Notes shall be issued upon original issuance in whole in the form of one or
more Global Securities (the Book-Entry Notes). Each Book-Entry Note shall represent such of the
outstanding Notes as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions.
6
The Partnership initially appoints The Depository Trust Company to act as Depositary with
respect to the Book-Entry Notes.
SECTION 2.2
Title, Amount and Payment of Principal and Interest.
(a) The 2014 Notes shall be entitled the 8.50% Senior Notes due 2014. The Trustee shall
authenticate and deliver (i) the 2014 Notes for original issue on the date hereof (the Original
2014 Notes) in the aggregate principal amount of $350,000,000, and (ii) additional 2014 Notes for
original issue from time to time after the date hereof in such principal amounts as may be
specified in a Partnership Order described in this sentence, in each case upon a Partnership Order
for the authentication and delivery thereof and satisfaction of the other provisions of Section
2.04 of the Base Indenture. Such order shall specify the amount of the 2014 Notes to be
authenticated, the date on which the original issue of 2014 Notes is to be authenticated, and the
name or names of the initial Holder or Holders. The aggregate principal amount of 2014 Notes that
may be outstanding at any time may not exceed $350,000,000 plus such additional principal amounts
as may be issued and authenticated pursuant to clause (ii) of this paragraph (except as provided in
Section 2.09 of the Indenture). The Original 2014 Notes and any additional 2014 Notes issued and
authenticated pursuant to clause (ii) of this paragraph shall constitute a single series of Debt
Securities for all purposes under the Indenture.
The principal amount of each 2014 Note shall be payable on April 15, 2014. Each 2014 Note
shall bear interest from the date of original issuance, or the most recent date to which interest
has been paid, at the fixed rate of 8.50% per annum. The dates on which interest on the 2014 Notes
shall be payable shall be April 15 and October 15 of each year, commencing October 15, 2009 (the
2014 Interest Payment Dates). The regular record date for interest payable on the 2014 Notes on
any 2014 Interest Payment Date shall be April 1 or October 1, as the case may be, next preceding
such 2014 Interest Payment Date.
Payments of principal of, premium, if any, and interest due on the 2014 Notes representing
Book-Entry Notes on any 2014 Interest Payment Date or at maturity will be made available to the
Trustee by 10:00 a.m., New York City time, on such date, unless such date falls on a day which is
not a Business Day, in which case such payments will be made available to the Trustee by 10:00
a.m., New York City time, on the next Business Day. As soon as possible thereafter, the Trustee
will make such payments to the Depositary.
(b) The 2019 Notes shall be entitled the 9.00% Senior Notes due 2019. The Trustee shall
authenticate and deliver (i) the 2019 Notes for original issue on the date hereof (the Original
2019 Notes) in the aggregate principal amount of $650,000,000, and (ii) additional 2019 Notes for
original issue from time to time after the date hereof in such principal amounts as may be
specified in a Partnership Order described in this sentence, in each case upon a Partnership Order
for the authentication and delivery thereof and satisfaction of the other provisions of Section
2.04 of the Base Indenture. Such order shall specify the amount of the 2019 Notes to be
authenticated, the date on which the original issue of 2019 Notes is to be authenticated, and the
name or names of the initial Holder or Holders. The aggregate principal amount of 2019 Notes that
may be outstanding at any time may not exceed $650,000,000 plus such additional principal amounts
as may be issued and authenticated pursuant to clause (ii) of this paragraph (except as provided in
Section 2.09 of the Indenture). The Original 2019 Notes
7
and any additional 2019 Notes issued and authenticated pursuant to clause (ii) of this
paragraph shall constitute a single series of Debt Securities for all purposes under the Indenture.
The principal amount of each 2019 Note shall be payable on April 15, 2019. Each 2019 Note
shall bear interest from the date of original issuance, or the most recent date to which interest
has been paid, at the fixed rate of 9.00% per annum. The dates on which interest on the 2014 Notes
shall be payable shall be April 15 and October 15 of each year, commencing October 15, 2009 (the
2019 Interest Payment Dates). The regular record date for interest payable on the 2019 Notes on
any 2019 Interest Payment Date shall be April 1 or October 1, as the case may be, next preceding
such 2019 Interest Payment Date.
Payments of principal of, premium, if any, and interest due on the 2019 Notes representing
Book-Entry Notes on any 2019 Interest Payment Date or at maturity will be made available to the
Trustee by 10:00 a.m., New York City time, on such date, unless such date falls on a day which is
not a Business Day, in which case such payments will be made available to the Trustee by 10:00
a.m., New York City time, on the next Business Day. As soon as possible thereafter, the Trustee
will make such payments to the Depositary.
SECTION 2.3
Transfer and Exchange
.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of Book-Entry Notes or
beneficial interests therein shall be effected through the Depositary, in accordance with Section
2.17 of the Base Indenture and Article II of this Eighth Supplemental Indenture (including the
restrictions on transfer set forth therein and herein) and the rules and procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to those set forth
therein and herein to the extent required by the Securities Act of 1933, as amended.
ARTICLE III
FUTURE SUBSIDIARY GUARANTEES
SECTION 3.1
No Initial Guarantee of the Notes by Subsidiary Guarantors
.
The Notes initially shall not be entitled to the benefits of the Guarantee contemplated by
Article X of the Base Indenture.
SECTION 3.2
Future Subsidiary Guarantors
.
If any Subsidiary of the Partnership that is not then a Subsidiary Guarantor guarantees,
becomes a co-obligor with respect to or otherwise provides direct credit support for any
obligations of the Partnership or any of its other Subsidiaries under the Credit Agreement, then
the Partnership shall cause such Subsidiary to promptly execute and deliver to the Trustee a
supplemental indenture to the Indenture, in a form satisfactory to the Trustee, providing for the
Guarantee by such Subsidiary of the Partnerships obligations under the Notes in accordance with
Article X of the Base Indenture.
8
SECTION 3.3
Release of Guarantees
.
In addition to the provisions of Section 10.04(a) of the Base Indenture, the Guarantee of the
Notes of any Subsidiary Guarantor shall be unconditionally released and discharged, following
delivery of written notice by the Partnership to the Trustee, upon the release and discharge of all
guarantees or other obligations of such Subsidiary Guarantor with respect to the obligations of the
Partnership or its Subsidiaries under the Credit Agreement.
SECTION 3.4
Reinstatement of Guarantees
.
If at any time following any release of the Guarantee of a Subsidiary Guarantor pursuant to
Section 3.3 above, such Subsidiary Guarantor again guarantees, becomes a co-obligor with respect to
or otherwise provides direct credit support for any obligations of the Partnership or any of its
Subsidiaries under the Credit Agreement, then such Subsidiary Guarantor shall again guarantee the
Partnerships obligations under the Notes and the Partnership shall cause such Subsidiary Guarantor
to promptly execute and deliver a supplemental indenture to the Indenture, in a form satisfactory
to the Trustee, providing for the Guarantee by such Subsidiary Guarantor of the Partnerships
obligations under the Notes in accordance with Article X of the Base Indenture.
ARTICLE IV
REDEMPTION
SECTION 4.1
Redemption
.
The Partnership shall have no obligation to redeem, purchase or repay the Notes pursuant to
any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder
thereof.
The 2014 Notes are redeemable, at the option of the Partnership, at any time in whole, or from
time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal
amount of the 2014 Notes to be redeemed; or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest (at the rate in effect on the date of calculation of
the Redemption Price) on the 2014 Notes to be redeemed that would be due after the related
Redemption Date but for such redemption (exclusive of interest accrued to the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case,
accrued interest to the Redemption Date.
The 2019 Notes are redeemable, at the option of the Partnership, at any time in whole, or from
time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal
amount of the 2019 Notes to be redeemed; or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest (at the rate in effect on the date of calculation of
the Redemption Price) on the 2019 Notes to be redeemed that would be due after the related
Redemption Date but for such redemption (exclusive of interest accrued to the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case,
accrued interest to the Redemption Date.
9
The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker.
ARTICLE V
ADDITIONAL COVENANTS
In addition to the covenants set forth in the Base Indenture, the Notes shall be entitled to
the benefit of the following covenants:
SECTION 5.1
Limitation on Liens
.
The Partnership shall not, nor shall it permit any of its Subsidiaries to, create, assume,
incur or suffer to exist any mortgage, lien, security interest, pledge, charge or other encumbrance
(liens) upon any Principal Property or upon any capital stock of any Restricted Subsidiary,
whether owned on the date hereof or thereafter acquired, to secure any Indebtedness of the
Partnership or any other Person (other than the Notes), without in any such case making effective
provisions whereby all of the outstanding Notes are secured equally and ratably with, or prior to,
such Indebtedness so long as such Indebtedness is so secured.
Notwithstanding the foregoing, the Partnership may, and may permit any of its Subsidiaries to,
create, assume, incur, or suffer to exist without securing the Notes (a) any Permitted Lien, (b)
any lien upon any Principal Property or capital stock of a Restricted Subsidiary to secure
Indebtedness of the Partnership or any other Person, provided that the aggregate principal amount
of all Indebtedness then outstanding secured by such lien and all similar liens under this clause
(b), together with all Attributable Indebtedness from Sale-Leaseback Transactions (excluding
Sale-Leaseback Transactions permitted by clauses (1) through (4), inclusive, of Section 5.2
hereof), does not exceed 10% of Consolidated Net Tangible Assets or (c) any lien upon (i) any
Principal Property that was not owned by the Partnership or any of its Subsidiaries on the date
hereof or (ii) the capital stock of any Restricted Subsidiary that owns no Principal Property that
was owned by the Partnership or any of its Subsidiaries on the date hereof, in each case owned by a
Subsidiary of the Partnership (an Excluded Subsidiary) that (A) is not, and is not required to
be, a Subsidiary Guarantor and (B) has not granted any liens on any of its property securing
Indebtedness with recourse to the Partnership or any Subsidiary of the Partnership other than such
Excluded Subsidiary or any other Excluded Subsidiary.
SECTION 5.2
Restriction on Sale-Leasebacks
.
The Partnership will not, and will not permit any Subsidiary to, engage in the sale or
transfer by the Partnership or any of its Subsidiaries of any Principal Property to a Person (other
than the Partnership or a Subsidiary) and the taking back by the Partnership or its Subsidiary, as
the case may be, of a lease of such Principal Property (a Sale-Leaseback Transaction), unless:
(1) such Sale-Leaseback Transaction occurs within one year from the date of completion of the
acquisition of the Principal Property subject thereto or the date of the completion of
construction, development or substantial repair or improvement, or commencement of full operations
on such Principal Property, whichever is later;
10
(2) the Sale-Leaseback Transaction involves a lease for a period, including renewals, of not
more than three years;
(3) the Partnership or such Subsidiary would be entitled to incur Indebtedness secured by a
lien on the Principal Property subject thereto in a principal amount equal to or exceeding the
Attributable Indebtedness from such Sale-Leaseback Transaction without equally and ratably securing
the Notes; or
(4) the Partnership or such Subsidiary, within a one-year period after such Sale-Leaseback
Transaction, applies or causes to be applied an amount not less than the Attributable Indebtedness
from such Sale-Leaseback Transaction to (a) the prepayment, repayment, redemption, reduction or
retirement of any Indebtedness of the Partnership or any of its Subsidiaries that is not
subordinated to the Notes or any Guarantee, or (b) the expenditure or expenditures for Principal
Property used or to be used in the ordinary course of business of Partnership or its Subsidiaries.
Notwithstanding the foregoing, the Partnership may, and may permit any Subsidiary to, effect
any Sale-Leaseback Transaction that is not excepted by clauses (1) through (4), inclusive, of the
preceding paragraph provided that the Attributable Indebtedness from such Sale-Leaseback
Transaction, together with the aggregate principal amount of outstanding Indebtedness (other than
the Notes) secured by liens other than Permitted Liens upon Principal Properties, does not exceed
10% of Consolidated Net Tangible Assets.
ARTICLE VI
ADDITIONAL EVENT OF DEFAULT
SECTION 6.1
Additional Event of Default
.
In addition to the Events of Default specified in Section 6.01 of the Base Indenture, the
following shall be an Event of Default with respect to each series of the Notes: any Indebtedness
of the Partnership or any Subsidiary Guarantor is not paid within any applicable grace period after
final maturity or is accelerated by the holders thereof because of a default and the total amount
of such Indebtedness unpaid or accelerated exceeds $25,000,000.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1
Ratification of Base Indenture
.
The Base Indenture, as supplemented by this Eighth Supplemental Indenture, is in all respects
ratified and confirmed, and this Eighth Supplemental Indenture shall be deemed part of the Base
Indenture in the manner and to the extent herein and therein provided.
SECTION 7.2
Trustee Not Responsible for Recitals
.
The recitals contained herein and in the Notes, except with respect to the Trustees
certificates of authentication, shall be taken as the statements of the Partnership, and the
Trustee
11
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Eighth Supplemental Indenture or of the
Notes.
SECTION 7.3
Table of Contents, Headings, etc
.
The table of contents and headings of the Articles and Sections of this Eighth Supplemental
Indenture have been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 7.4
Counterpart Originals
.
The parties may sign any number of copies of this Eighth Supplemental Indenture. Each signed
copy shall be an original, but all of them together represent the same agreement.
SECTION 7.5
Governing Law
.
THIS EIGHTH SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(Signature Pages Follow)
12
IN WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to be
duly executed as of the day and year first above written.
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ISSUER:
ENERGY TRANSFER PARTNERS, L.P.
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By:
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Energy Transfer Partners GP, L.P.,
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Its: General Partner
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By:
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Energy Transfer Partners, L.L.C.
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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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TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION
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By:
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Name:
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Title:
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Signature Page of Eighth Supplemental Indenture
Exhibit A-1
FORM OF NOTE
[FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (DTC) (55 WATER STREET, NEW YORK, NEW YORK 10041) TO THE PARTNERSHIP OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.]*
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No.
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$
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CUSIP: 29273RAL3
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ISIN: US29273RAL33
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ENERGY TRANSFER PARTNERS, L.P.
8.50% SENIOR NOTES DUE 2014
ENERGY TRANSFER PARTNERS, L.P., a Delaware limited partnership (the Partnership, which term
includes any successor under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co.* or its registered assigns, the principal sum of
U.S.
dollars ($
), [or such greater or lesser principal sum as is shown on the attached
Schedule of Increases and Decreases in Global Security]
*
, on April 15, 2014 in
such coin and currency of the United States of America as at the time of payment shall be legal
tender for the payment of public and private debts, and to pay interest thereon at an annual rate
of 8.50% payable on April 15 and October 15 of each year, to the person in whose name the Security
is registered at the close of business on the record date for such interest, which shall be the
preceding April 1 or October 1 (each, a Regular Record Date), respectively, payable commencing on
October 15, 2009, with interest accruing from April 7, 2009, or the most recent date to which
interest shall have been paid.
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*
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To be included in a Book Entry Note.
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A-1-1
Reference is made to the further provisions of this Security set forth on the reverse hereof.
Such further provisions shall for all purposes have the same effect as though fully set forth at
this place.
The statements in the legends set forth in this Security are an integral part of the terms of
this Security and by acceptance hereof the Holder of this Security agrees to be subject to, and
bound by, the terms and provisions set forth in each such legend.
This Security is issued in respect of a series of Debt Securities of an initial aggregate
principal amount of $350,000,000 designated as the 8.50% Senior Notes due 2014 of the Partnership
and is governed by the Indenture dated as of January 18, 2005 (the Base Indenture), duly executed
and delivered by the Partnership, as issuer, to Wachovia Bank, National Association, as trustee, as
supplemented by the Eighth Supplemental Indenture dated as of April 7, 2009, duly executed by the
Partnership and U.S. Bank National Association (the Trustee), as successor to Wachovia Bank,
National Association, (the Eighth Supplemental Indenture, and together with the Base Indenture,
the Indenture). The terms of the Indenture are incorporated herein by reference. This Security
shall in all respects be entitled to the same benefits as definitive Debt Securities under the
Indenture.
If and to the extent any provision of the Indenture limits, qualifies or conflicts with any
other provision of the Indenture that is required to be included in the Indenture or is deemed
applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as
amended (the TIA), such required provision shall control.
This Security shall not be valid or become obligatory for any purpose until the Trustees
Certificate of Authentication hereon shall have been manually signed by the Trustee under the
Indenture.
A-1-2
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed by its sole
General Partner.
Dated:
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ENERGY TRANSFER PARTNERS, L.P.
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By:
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Energy Transfer Partners GP, L.P.
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Its: General Partner
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By:
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Energy Transfer Partners, L.L.C.
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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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By:
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Name:
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Title:
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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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U.S. BANK NATIONAL ASSOCIATION,
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as Trustee
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By:
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Authorized Signatory
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A-1-3
[REVERSE OF SECURITY]
ENERGY TRANSFER PARTNERS, L.P.
8.50% SENIOR NOTES DUE 2014
This Security is one of a duly authorized issue of debentures, notes or other evidences of
indebtedness of the Partnership (the Debt Securities) of the series hereinafter specified, all
issued or to be issued under and pursuant to the Indenture, to which Indenture reference is hereby
made for a description of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Partnership and the Holders of the Debt Securities. The Debt
Securities may be issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Security is one of a series designated as the 8.50% Senior
Notes due 2014 of the Partnership, in an initial aggregate principal amount of $350,000,000 (the
Securities).
1.
Interest
.
The Partnership promises to pay interest on the principal amount of this Security at the rate
of 8.50% per annum.
The Partnership will pay interest semi-annually on April 15 and October 15 of each year (each
an Interest Payment Date), commencing October 15, 2009. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has been paid on the
Securities, from April 7, 2009. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The Partnership shall pay interest (including post-petition interest in
any proceeding under any applicable bankruptcy laws) on overdue installments of interest (without
regard to any applicable grace period) and on overdue principal and premium, if any, from time to
time on demand at the same rate per annum, in each case to the extent lawful.
2.
Method of Payment
.
The Partnership shall pay interest on the Securities (except Defaulted Interest) to the
persons who are the registered Holders at the close of business on the Regular Record Date
immediately preceding the Interest Payment Date. Any such interest not so punctually paid or duly
provided for (Defaulted Interest) may be paid to the persons who are registered Holders at the
close of business on a special record date for the payment of such Defaulted Interest, or in any
other lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may then be listed if such manner of payment shall be deemed practicable by the Trustee,
as more fully provided in the Indenture. The Partnership shall pay principal, premium, if any, and
interest in such coin or currency of the United States of America as at the time of payment shall
be legal tender for payment of public and private debts. Payments in respect of a Global Security
(including principal, premium, if any, and interest) will be made by wire transfer of immediately
available funds to the accounts specified by the Depositary. Payments in respect of Securities in
definitive form (including principal, premium, if any, and interest) will be made at the office or
agency of the Partnership maintained for such purpose
A-1-4
within The City of New York, which initially will be at the corporate trust office of the
Trustee located at 100 Wall Street, Suite 1600, New York, New York 10005, Mail Station:
EX-NY-WALL, or, at the option of the Partnership, payment of interest may be made by check mailed
to the Holders on the relevant record date at their addresses set forth in the register of Holders
maintained by the Registrar or at the option of the Holder, payment of interest on Securities in
definitive form will be made by wire transfer of immediately available funds to any account
maintained in the United States, provided such Holder has requested such method of payment and
provided timely wire transfer instructions to the Paying Agent. The Holder must surrender this
Security to a Paying Agent to collect payment of principal.
3.
Paying Agent and Registrar
.
Initially, U.S. Bank National Association will act as Paying Agent and Registrar. The
Partnership may change any Paying Agent or Registrar at any time upon notice to the Trustee and the
Holders. The Partnership may act as Paying Agent.
4.
Indenture
.
This Security is one of a duly authorized issue of Debt Securities of the Partnership issued
and to be issued in one or more series under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Securities include those stated in the Base Indenture, those made part of the
Indenture by reference to the TIA, as in effect on the date of the Base Indenture, and those terms
stated in the Eighth Supplemental Indenture. The Securities are subject to all such terms, and
Holders of Securities are referred to the Base Indenture, the Eighth Supplemental Indenture and the
TIA for a statement of them. The Securities of this series are general unsecured obligations of the
Partnership limited to an initial aggregate principal amount of $350,000,000;
provided, however
,
that the authorized aggregate principal amount of such series may be increased from time to time as
provided in the Eighth Supplemental Indenture.
5.
Redemption
.
The Securities are redeemable, at the option of the Partnership, at any time in whole, or from
time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal
amount of the Securities to be redeemed; or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest (at the rate in effect on the date of calculation of
the Redemption Price) on the Securities to be redeemed that would be due after the related
Redemption Date but for such redemption (exclusive of interest accrued to the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case,
accrued interest to the Redemption Date.
The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker.
Except as set forth above, the Securities will not be redeemable prior to their Stated
Maturity and will not be entitled to the benefit of any sinking fund.
A-1-5
6.
Denominations; Transfer; Exchange
.
The Securities are to be issued in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. A Holder may register the transfer of,
or exchange, Securities in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture.
7.
Person Deemed Owners
.
The registered Holder of a Security may be treated as the owner of it for all purposes.
8.
Amendment; Supplement; Waiver
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Subject to certain exceptions, the Indenture may be amended or supplemented, and any existing
Event of Default or compliance with any provision may be waived, with the consent of the Holders of
a majority in principal amount of the outstanding Debt Securities of each series affected. Without
consent of any Holder of a Security, the parties thereto may amend or supplement the Indenture to,
among other things, cure any ambiguity or omission, to correct any defect or inconsistency, or to
make any other change that does not adversely affect the rights of any Holder of a Security. Any
such consent or waiver by the Holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and owners of this
Security and any Securities which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other Securities.
9.
Defaults and Remedies
.
Certain events of bankruptcy or insolvency are Events of Default that will result in the
principal amount of the Securities, together with premium, if any, and accrued and unpaid interest
thereon, becoming due and payable immediately upon the occurrence of such Events of Default. If any
other Event of Default with respect to the Securities occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all the Securities, together with
premium, if any, and accrued and unpaid interest thereon, to be due and payable immediately in the
manner and with the effect provided in the Indenture. Notwithstanding the preceding sentence,
however, if at any time after such a declaration of acceleration has been made, the Holders of a
majority in principal amount of the outstanding Securities, by written notice to the Trustee, may
rescind such declaration and annul its consequences if the rescission would not conflict with any
judgment or decree of a court already rendered and if all Events of Default with respect to the
Securities, other than the nonpayment of the principal, premium, if any, or interest which has
become due solely by such declaration acceleration, shall have been cured or shall have been
waived. No such rescission shall affect any subsequent default or shall impair any right consequent
thereon. Holders of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may require indemnity or security satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
A-1-6
Holders of a majority in aggregate principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power.
10.
Trustee Dealings with Partnership
.
The Trustee under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Partnership or its Affiliates, and may otherwise
deal with the Partnership or its Affiliates as if it were not the Trustee.
11.
Authentication
.
This Security shall not be valid until the Trustee signs the certificate of authentication on
the other side of this Security.
12.
Abbreviations and Defined Terms
.
Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such
as: TEN COM (tenant in common), TEN ENT (tenants by the entireties), JT TEN (joint tenants with
right of survivorship and not as tenants in common), CUST (Custodian), and U/G/M/A (Uniform Gifts
to Minors Act).
13.
CUSIP Numbers
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Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Partnership has caused CUSIP numbers to be printed on the Securities as a
convenience to the Holders of the Securities. No representation is made as to the accuracy of such
number as printed on the Securities and reliance may be placed only on the other identification
numbers printed hereon.
14.
Absolute Obligation
.
No reference herein to the Indenture and no provision of this Security or the Indenture shall
alter or impair the obligation of the Partnership, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Security in the manner, at the respective
times, at the rate and in the coin or currency herein prescribed.
15.
No Recourse
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No director, officer, employee, limited partner or shareholder, as such, of the Partnership or
the General Partner shall have any personal liability in respect of the obligations of the
Partnership under the Securities, the Indenture or any Guarantee by reason of his, her or its
status. Each Holder by accepting the Securities waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Securities.
16.
Governing Law
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This Security shall be construed in accordance with and governed by the laws of the State of
New York.
A-1-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be
construed as though they were written out in full according to applicable laws or regulations:
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TEN COM as tenants in common
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UNIF GIFT MIN ACT -
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(Cust.)
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TEN ENT as tenants by entireties
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Custodian for:
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(Minor)
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JT TEN as joint tenants with right
of survivorship and not as tenants in
common
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Under Uniform Gifts to Minors Act of
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(State)
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Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Please print or type name and address including postal zip code of assignee:
the within Security and all rights thereunder, hereby irrevocably constituting and appointing to
transfer said Security on the books of the Partnership, with full power of substitution in the
premises.
A-1-8
SCHEDULE OF INCREASES OR DECREASES
IN GLOBAL SECURITY*
The following increases or decreases in this Global Security have been made:
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Principal Amount of
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Amount of Decrease
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Amount of Increase
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this Global Security
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in Principal Amount
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in Principal Amount
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following such
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Signature of
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of this Global
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of this Global
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decrease (or
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authorized officer of
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Date of Exchange
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Security
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Security
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increase)
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Trustee or Depositary
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*
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To be included in a Book-Entry Note.
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A-1-9
Exhibit A-2
FORM OF NOTE
[FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (DTC) (55 WATER STREET, NEW YORK, NEW YORK 10041) TO THE PARTNERSHIP OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.]*
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No.
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$
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CUSIP: 29273RAM1
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ISIN: US29273RAM16
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ENERGY TRANSFER PARTNERS, L.P.
9.00% SENIOR NOTES DUE 2019
ENERGY TRANSFER PARTNERS, L.P., a Delaware limited partnership (the Partnership, which term
includes any successor under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co.* or its registered assigns, the principal sum of __________ U.S.
dollars ($__________________), [or such greater or lesser principal sum as is shown on the attached
Schedule of Increases and Decreases in Global Security]
*
, on April 15, 2019 in
such coin and currency of the United States of America as at the time of payment shall be legal
tender for the payment of public and private debts, and to pay interest thereon at an annual rate
of 9.00% payable on April 15 and October 15 of each year, to the person in whose name the Security
is registered at the close of business on the record date for such interest, which shall be the
preceding April 1 or October 1 (each, a Regular Record Date), respectively, payable commencing on
October 15, 2009, with interest accruing from April 7, 2009, or the most recent date to which
interest shall have been paid.
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*
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To be included in Book Entry Note.
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A-2-1
Reference is made to the further provisions of this Security set forth on the reverse hereof.
Such further provisions shall for all purposes have the same effect as though fully set forth at
this place.
The statements in the legends set forth in this Security are an integral part of the terms of
this Security and by acceptance hereof the Holder of this Security agrees to be subject to, and
bound by, the terms and provisions set forth in each such legend.
This Security is issued in respect of a series of Debt Securities of an initial aggregate
principal amount of $650,000,000 designated as the 9.00% Senior Notes due 2019 of the Partnership
and is governed by the Indenture dated as of January 18, 2005 (the Base Indenture), duly executed
and delivered by the Partnership, as issuer, to Wachovia Bank, National Association, as trustee, as
supplemented by the Eighth Supplemental Indenture dated as of April 7, 2009, duly executed by the
Partnership and U.S. Bank National Association (the Trustee), as successor to Wachovia Bank,
National Association, (the Eighth Supplemental Indenture, and together with the Base Indenture,
the Indenture). The terms of the Indenture are incorporated herein by reference. This Security
shall in all respects be entitled to the same benefits as definitive Debt Securities under the
Indenture.
If and to the extent any provision of the Indenture limits, qualifies or conflicts with any
other provision of the Indenture that is required to be included in the Indenture or is deemed
applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as
amended (the TIA), such required provision shall control.
This Security shall not be valid or become obligatory for any purpose until the Trustees
Certificate of Authentication hereon shall have been manually signed by the Trustee under the
Indenture.
A-2-2
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed by its sole
General Partner.
Dated:
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ENERGY TRANSFER PARTNERS, L.P.
By: Energy Transfer Partners GP, L.P.
Its: General Partner
By: Energy Transfer Partners, L.L.C.
Its: General Partner
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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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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U.S. BANK NATIONAL ASSOCIATION,
as Trustee
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By:
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Authorized Signatory
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A-2-3
[REVERSE OF SECURITY]
ENERGY TRANSFER PARTNERS, L.P.
9.00% SENIOR NOTES DUE 2019
This Security is one of a duly authorized issue of debentures, notes or other evidences of
indebtedness of the Partnership (the Debt Securities) of the series hereinafter specified, all
issued or to be issued under and pursuant to the Indenture, to which Indenture reference is hereby
made for a description of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Partnership and the Holders of the Debt Securities. The Debt
Securities may be issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Security is one of a series designated as the 9.00% Senior
Notes due 2019 of the Partnership, in an initial aggregate principal amount of $650,000,000 (the
Securities).
1.
Interest
.
The Partnership promises to pay interest on the principal amount of this Security at the rate
of 9.00% per annum.
The Partnership will pay interest semi-annually on April 15 and October 15 of each year (each
an Interest Payment Date), commencing October 15, 2009. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has been paid on the
Securities, from April 7, 2009. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The Partnership shall pay interest (including post-petition interest in
any proceeding under any applicable bankruptcy laws) on overdue installments of interest (without
regard to any applicable grace period) and on overdue principal and premium, if any, from time to
time on demand at the same rate per annum, in each case to the extent lawful.
2.
Method of Payment
.
The Partnership shall pay interest on the Securities (except Defaulted Interest) to the
persons who are the registered Holders at the close of business on the Regular Record Date
immediately preceding the Interest Payment Date. Any such interest not so punctually paid or duly
provided for (Defaulted Interest) may be paid to the persons who are registered Holders at the
close of business on a special record date for the payment of such Defaulted Interest, or in any
other lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may then be listed if such manner of payment shall be deemed practicable by the Trustee,
as more fully provided in the Indenture. The Partnership shall pay principal, premium, if any, and
interest in such coin or currency of the United States of America as at the time of payment shall
be legal tender for payment of public and private debts. Payments in respect of a Global Security
(including principal, premium, if any, and interest) will be made by wire transfer of immediately
available funds to the accounts specified by the Depositary. Payments in respect of Securities in
definitive form (including principal, premium, if any, and interest) will be made at the office or
agency of the Partnership maintained for such purpose
A-2-4
within The City of New York, which initially will be at the corporate trust office of the
Trustee located at 100 Wall Street, Suite 1600, New York, New York 10005, Mail Station:
EX-NY-WALL, or, at the option of the Partnership, payment of interest may be made by check mailed
to the Holders on the relevant record date at their addresses set forth in the register of Holders
maintained by the Registrar or at the option of the Holder, payment of interest on Securities in
definitive form will be made by wire transfer of immediately available funds to any account
maintained in the United States, provided such Holder has requested such method of payment and
provided timely wire transfer instructions to the Paying Agent. The Holder must surrender this
Security to a Paying Agent to collect payment of principal.
3.
Paying Agent and Registrar
.
Initially, U.S. Bank National Association will act as Paying Agent and Registrar. The
Partnership may change any Paying Agent or Registrar at any time upon notice to the Trustee and the
Holders. The Partnership may act as Paying Agent.
4.
Indenture
.
This Security is one of a duly authorized issue of Debt Securities of the Partnership issued
and to be issued in one or more series under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Securities include those stated in the Base Indenture, those made part of the
Indenture by reference to the TIA, as in effect on the date of the Base Indenture, and those terms
stated in the Eighth Supplemental Indenture. The Securities are subject to all such terms, and
Holders of Securities are referred to the Base Indenture, the Eighth Supplemental Indenture and the
TIA for a statement of them. The Securities of this series are general unsecured obligations of the
Partnership limited to an initial aggregate principal amount of $650,000,000;
provided, however
,
that the authorized aggregate principal amount of such series may be increased from time to time as
provided in the Eighth Supplemental Indenture.
5.
Redemption
.
The Securities are redeemable, at the option of the Partnership, at any time in whole, or from
time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal
amount of the Securities to be redeemed; or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest (at the rate in effect on the date of calculation of
the Redemption Price) on the Securities to be redeemed that would be due after the related
Redemption Date but for such redemption (exclusive of interest accrued to the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case,
accrued interest to the Redemption Date.
The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker.
Except as set forth above, the Securities will not be redeemable prior to their Stated
Maturity and will not be entitled to the benefit of any sinking fund.
A-2-5
6.
Denominations; Transfer; Exchange
.
The Securities are to be issued in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. A Holder may register the transfer of,
or exchange, Securities in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture.
7.
Person Deemed Owners
.
The registered Holder of a Security may be treated as the owner of it for all purposes.
8.
Amendment; Supplement; Waiver
.
Subject to certain exceptions, the Indenture may be amended or supplemented, and any existing
Event of Default or compliance with any provision may be waived, with the consent of the Holders of
a majority in principal amount of the outstanding Debt Securities of each series affected. Without
consent of any Holder of a Security, the parties thereto may amend or supplement the Indenture to,
among other things, cure any ambiguity or omission, to correct any defect or inconsistency, or to
make any other change that does not adversely affect the rights of any Holder of a Security. Any
such consent or waiver by the Holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and owners of this
Security and any Securities which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other Securities.
9.
Defaults and Remedies
.
Certain events of bankruptcy or insolvency are Events of Default that will result in the
principal amount of the Securities, together with premium, if any, and accrued and unpaid interest
thereon, becoming due and payable immediately upon the occurrence of such Events of Default. If any
other Event of Default with respect to the Securities occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all the Securities, together with
premium, if any, and accrued and unpaid interest thereon, to be due and payable immediately in the
manner and with the effect provided in the Indenture. Notwithstanding the preceding sentence,
however, if at any time after such a declaration of acceleration has been made, the Holders of a
majority in principal amount of the outstanding Securities, by written notice to the Trustee, may
rescind such declaration and annul its consequences if the rescission would not conflict with any
judgment or decree of a court already rendered and if all Events of Default with respect to the
Securities, other than the nonpayment of the principal, premium, if any, or interest which has
become due solely by such declaration acceleration, shall have been cured or shall have been
waived. No such rescission shall affect any subsequent default or shall impair any right consequent
thereon. Holders of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may require indemnity or security satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
A-2-6
Holders of a majority in aggregate principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power.
10.
Trustee Dealings with Partnership
.
The Trustee under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Partnership or its Affiliates, and may otherwise
deal with the Partnership or its Affiliates as if it were not the Trustee.
11.
Authentication
.
This Security shall not be valid until the Trustee signs the certificate of authentication on
the other side of this Security.
12.
Abbreviations and Defined Terms
.
Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such
as: TEN COM (tenant in common), TEN ENT (tenants by the entireties), JT TEN (joint tenants with
right of survivorship and not as tenants in common), CUST (Custodian), and U/G/M/A (Uniform Gifts
to Minors Act).
13.
CUSIP Numbers
.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Partnership has caused CUSIP numbers to be printed on the Securities as a
convenience to the Holders of the Securities. No representation is made as to the accuracy of such
number as printed on the Securities and reliance may be placed only on the other identification
numbers printed hereon.
14.
Absolute Obligation
.
No reference herein to the Indenture and no provision of this Security or the Indenture shall
alter or impair the obligation of the Partnership, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Security in the manner, at the respective
times, at the rate and in the coin or currency herein prescribed.
15.
No Recourse
.
No director, officer, employee, limited partner or shareholder, as such, of the Partnership or
the General Partner shall have any personal liability in respect of the obligations of the
Partnership under the Securities, the Indenture or any Guarantee by reason of his, her or its
status. Each Holder by accepting the Securities waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Securities.
16.
Governing Law
.
This Security shall be construed in accordance with and governed by the laws of the State of
New York.
A-2-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be
construed as though they were written out in full according to applicable laws or regulations:
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TEN COM as tenants in common
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UNIF GIFT MIN ACT -
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(Cust.)
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TEN ENT as tenants by entireties
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Custodian for:
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(Minor)
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JT TEN as joint tenants with right
of survivorship and not as tenants in
common
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Under Uniform Gifts to Minors Act of
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(State)
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Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Please print or type name and address including postal zip code of assignee:
the within Security and all rights thereunder, hereby irrevocably constituting and appointing to
transfer said Security on the books of the Partnership, with full power of substitution in the
premises.
A-2-8
SCHEDULE OF INCREASES OR DECREASES
IN GLOBAL SECURITY*
The following increases or decreases in this Global Security have been made:
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Principal Amount of
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Amount of Decrease
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Amount of Increase
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this Global Security
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in Principal Amount
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in Principal Amount
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following such
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Signature of
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of this Global
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of this Global
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decrease (or
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authorized officer of
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Date of Exchange
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Security
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Security
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increase)
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Trustee or Depositary
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*
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To be included in a Book-Entry Note.
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A-2-9
DESCRIPTION
OF NOTES
Energy Transfer will issue the notes under an indenture dated as
of January 18, 2005 among itself, the subsidiaries of
Energy Transfer named therein and U.S. Bank National
Association (as
successor-by-merger
to Wachovia Bank, National Association), as trustee, as
supplemented by a supplemental indenture creating the notes (as
so supplemented, the indenture). This description is
a summary of the material provisions of the notes and the
indenture. This description does not restate those agreements
and instruments in their entirety. You should refer to the notes
and the indenture, forms of which are available as set forth
below under Where You Can Find More Information, for
a complete description of our obligations and your rights.
You can find the definitions of various terms used in this
description under Certain Definitions
below. In this description, the terms Energy
Transfer, we, us and
our refer only to Energy Transfer Partners, L.P. and
not to any of its Subsidiaries.
General
The notes:
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will be general unsecured, senior obligations of Energy
Transfer, ranking equally with all other existing and future
unsecured and unsubordinated indebtedness of Energy Transfer;
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will initially be issued in an aggregate principal amount of
$350,000,000 with respect to the 2014 notes and an
aggregate principal amount of $650,000,000 with respect to the
2019 notes;
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will mature on April 15, 2014, with respect to the 2014
notes and April 15, 2019, with respect to the 2019 notes;
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will be issued in denominations of $1,000 and integral multiples
of $1,000;
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will bear interest at an annual rate of 8.50% with respect to
the 2014 notes and an annual rate of 9.00% with respect to the
2019 notes; and
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will be redeemable at any time at our option at the redemption
price described below under Optional
Redemption.
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The 2014 notes and 2019 notes each constitute a separate series
of debt securities under the indenture. The indenture does not
limit the amount of debt securities we may issue under the
indenture from time to time in one or more series. Currently, we
have outstanding under the indenture $400 million aggregate
principal amount of our 5.65% Senior Notes due 2012,
$350 million aggregate principal amount of our 6.00% Senior
Notes due 2013, $750 million aggregate principal amount of
our 5.95% Senior Notes due 2015, $400 million
aggregate principal amount of our 6.125% Senior Notes due
2017, $600 million aggregate principal amount of our 6.70%
Senior Notes due 2018, $600 million aggregate principal
amount of our 9.70% Senior Notes due 2019, $400 million
aggregate principal amount of our 6.625% Senior Notes due
2036 and $550 million aggregate principal amount of our
7.50% Senior Notes due 2038. We may in the future issue
additional debt securities under the indenture in addition to
the notes.
Interest
Interest on the notes will accrue from and including
April 7, 2009 or from and including the most recent
interest payment date to which interest has been paid or
provided for. We will pay interest in cash semiannually in
arrears on April 15 and October 15 of each year,
beginning October 15, 2009. We will make interest payments
to the persons in whose names the notes are registered at the
close of business on April 1 or October 1, as
applicable, before the next interest payment date. Interest will
be computed on the basis of a
360-day
year
consisting of twelve
30-day
months. If any interest payment date falls on a day that is not
a business day, the payment will be made on the next business
day, and no interest will accrue on the amount of interest due
on that interest payment date for the period from and after the
interest payment date to the date of payment.
S-17
Further
Issuances
We may from time to time, without notice to or the consent of
the holders of the notes, create and issue additional notes
having the same terms as either of the series of notes offered
by this prospectus supplement and accompanying prospectus,
except for the issue price and in some cases, the first interest
payment date. Additional notes issued in this manner will form a
single series with the previously issued and outstanding notes
of such series.
Optional
Redemption
The notes will be redeemable, at our option, at any time in
whole, or from time to time in part, at a price equal to the
greater of:
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100% of the principal amount of the notes to be redeemed; or
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the sum of the present values of the remaining scheduled
payments of principal and interest (at the interest rate in
effect on the date of calculation of the redemption price) on
the notes to be redeemed that would be due after the related
redemption date but for such redemption (exclusive of interest
accrued to the redemption date) discounted to the redemption
date on a semi-annual basis (assuming a
360-day
year
consisting of twelve
30-day
months) at the applicable Treasury Yield plus 50 basis
points;
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plus, in either case, accrued interest to the redemption date.
The actual redemption price, calculated as provided below, will
be calculated and certified to the trustee and us by the
Independent Investment Banker.
Notes called for redemption become due on the redemption date.
Notices of redemption will be mailed at least 30 but not more
than 60 days before the redemption date to each holder of
the notes to be redeemed at its registered address. The notice
of redemption for the notes will state, among other things, the
amount of notes to be redeemed, the redemption date, the method
of calculating the redemption price and each place that payment
will be made upon presentation and surrender of notes to be
redeemed. Unless we default in payment of the redemption price,
interest will cease to accrue on any notes that have been called
for redemption on the redemption date. If less than all of the
notes of a series are redeemed at any time, the trustee will
select the notes to be redeemed on a pro rata basis, by lot or
by any other method the trustee deems fair and appropriate.
For purposes of determining the redemption price, the following
definitions are applicable:
Treasury Yield
means, with respect to any
redemption date applicable to the notes, (a) the yield,
under the heading which represents the average for the
immediately preceding week, appearing in the most recently
published statistical release designated H.15(519)
or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity
corresponding to the Comparable Treasury Issue; or (b) if
the release (or any successor release) is not published during
the week preceding the calculation date or does not contain
these yields, the rate per annum equal to the semi-annual
equivalent yield to maturity (computed as of the third business
day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the applicable Comparable Treasury Price for
such redemption date.
Comparable Treasury Issue
means the United
States Treasury security selected by the Independent Investment
Banker as having a maturity comparable to the remaining term of
the notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the notes to be redeemed;
provided, however, that if no maturity is within three months
before or after the maturity date for such notes, yields for the
two published maturities most closely corresponding
S-18
to such United States Treasury security will be determined and
the treasury rate will be interpolated or extrapolated from
those yields on a straight line basis rounding to the nearest
month.
Comparable Treasury Price
means, with respect
to any redemption date, (a) the average of the Reference
Treasury Dealer Quotations for the redemption date, after
excluding the highest and lowest Reference Treasury Dealer
Quotations, or (b) if the Independent Investment Banker
obtains fewer than four Reference Treasury Dealer Quotations,
the average of all such quotations.
Independent Investment Banker
means Credit
Suisse Securities (USA) LLC, J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated or Greenwich Capital Markets,
Inc. (and their respective successors) or, if any such firm is
not willing and able to select the applicable Comparable
Treasury Issue, an independent investment banking institution of
national standing appointed by the trustee and reasonably
acceptable to Energy Transfer.
Reference Treasury Dealer
means (a) each
of Credit Suisse Securities (USA) LLC, J.P. Morgan Securities
Inc., Morgan Stanley & Co. Incorporated, Greenwich Capital
Markets, Inc. and their respective successors, and (b) one
other primary U.S. government securities dealer in the
United States selected by Energy Transfer (each, a Primary
Treasury Dealer); provided, however, that if any of the
foregoing shall resign as a Reference Treasury Dealer or cease
to be a U.S. government securities dealer, Energy Transfer will
substitute therefor another Primary Treasury Dealer.
Reference Treasury Dealer Quotations
means,
with respect to each Reference Treasury Dealer and any
redemption date for the notes, an average, as determined by the
Independent Investment Banker, of the bid and asked prices for
the Comparable Treasury Issue for the notes to be redeemed
(expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.
Subsidiary
Guarantees
The notes initially will not be guaranteed by any of our
Subsidiaries. However, if at any time following the issuance of
the notes, any Subsidiary of Energy Transfer guarantees, becomes
a co-obligor with respect to or otherwise provides direct credit
support for any obligations of Energy Transfer or any of its
other Subsidiaries under the Credit Agreement, then Energy
Transfer will cause such Subsidiary to promptly execute and
deliver to the trustee a supplemental indenture in a form
satisfactory to the trustee pursuant to which such Subsidiary
guarantees Energy Transfers obligations with respect to
the notes on the terms provided for in the indenture.
The guarantee of any Subsidiary Guarantor may be released under
certain circumstances. If we exercise our legal or covenant
defeasance option with respect to the notes as described below
under Defeasance and Discharge, then any
Subsidiary Guarantor will be released. Further, if no default
has occurred and is continuing under the indenture, and to the
extent not otherwise prohibited by the indenture, a Subsidiary
Guarantor will be unconditionally released and discharged from
its guarantee:
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automatically upon any sale, exchange or transfer, whether by
way of merger or otherwise, to any Person that is not our
affiliate, of all of our direct or indirect limited partnership
or other equity interests in the Subsidiary Guarantor;
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automatically upon the merger of the Subsidiary Guarantor into
us or any other Subsidiary Guarantor or the liquidation and
dissolution of the Subsidiary Guarantor; or
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following delivery of a written notice by us to the trustee,
upon the release of all guarantees or other obligations of the
Subsidiary Guarantor with respect to the obligations of Energy
Transfer or any of its Subsidiaries under the Credit Agreement.
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If at any time following any release of a Subsidiary Guarantor
from its guarantee of the notes pursuant to the third bullet
point in the preceding paragraph, the Subsidiary Guarantor again
guarantees, becomes a co-obligor with respect to or otherwise
provides direct credit support for any obligations of Energy
Transfer or
S-19
any of its Subsidiaries under the Credit Agreement, then Energy
Transfer will cause the Subsidiary Guarantor to again guarantee
the notes in accordance with the indenture.
Ranking
The notes will be unsecured, unless we are required to secure
them pursuant to the limitations on liens covenant described
below under Certain Covenants
Limitations on Liens. The notes will also be the
unsubordinated obligations of Energy Transfer and will rank
equally with all other existing and future unsubordinated
indebtedness of Energy Transfer. Each guarantee, if any, of the
notes will be an unsecured and unsubordinated obligation of the
Subsidiary Guarantor and will rank equally with all other
existing and future unsubordinated indebtedness of the
Subsidiary Guarantor. The notes and each guarantee, if any, will
effectively rank junior to any future indebtedness of Energy
Transfer and any Subsidiary Guarantor that is both secured and
unsubordinated to the extent of the value of the assets securing
such indebtedness, and the notes will effectively rank junior to
all indebtedness and other liabilities of Energy Transfers
existing and future Subsidiaries that are not Subsidiary
Guarantors.
As of December 31, 2008, after giving effect to this
offering and our public offering of 6,900,000 common units in
January 2009, and the use of net proceeds therefrom, Energy
Transfer, excluding its Subsidiaries, would have had
approximately $5.0 billion of indebtedness, all of which
would have been unsecured, unsubordinated indebtedness
consisting entirely of the notes, Energy Transfers
5.65% Senior Notes due 2012, 6.00% Senior Notes due
2013, 5.95% Senior Notes due 2015, 6.125% Senior Notes
due 2017, 6.70% Senior Notes due 2018, 9.70% Senior
Notes due 2019, 6.625% Senior Notes due 2036 and
7.50% Senior Notes due 2038 and Energy Transfers
obligations under the Credit Agreement. Initially, none of
Energy Transfers Subsidiaries will guarantee the notes.
Substantially all the assets of HOLP and its Subsidiaries are
pledged to secure Indebtedness of HOLP and its Subsidiaries.
Additionally, our subsidiary Transwestern has outstanding debt
securities. As of December 31, 2008, the notes would have
been effectively subordinated to approximately $724 million
of indebtedness of our Subsidiaries. In addition, MEP, our
unconsolidated joint venture with KMP, is a party to a
$1.4 billion senior revolving credit facility
($1.3 billion net of lending commitments from affiliates of
Lehman Brothers Inc.). As of December 31, 2008, there were
$837.5 million of outstanding borrowings and
$33.3 million of letters of credit issued under the MEP
facility. We have guaranteed 50% of the obligations of MEP under
this facility.
No
Sinking Fund
We are not required to make any mandatory redemption or sinking
fund payments with respect to the notes.
Certain
Covenants
Except as set forth below, neither Energy Transfer nor any of
its Subsidiaries is restricted by the indenture from incurring
any type of indebtedness or other obligation, from paying
dividends or making distributions on its partnership or other
equity interests or from purchasing or redeeming its partnership
or other equity interests. The indenture does not require the
maintenance of any financial ratios or specified levels of net
worth or liquidity. In addition, the indenture does not contain
any provisions that would require Energy Transfer to repurchase
or redeem or otherwise modify the terms of the notes upon a
change in control or other events involving Energy Transfer that
could adversely affect the creditworthiness of Energy Transfer.
Limitations on Liens.
Energy Transfer
will not, nor will it permit any of its Subsidiaries to, create,
assume, incur or suffer to exist any mortgage, lien, security
interest, pledge, charge or other encumbrance
(liens) upon any Principal Property or upon any
capital stock of any Restricted Subsidiary, whether owned on the
date of the supplemental indenture creating the notes or
thereafter acquired, to secure any Indebtedness of Energy
Transfer or any other Person (other than the notes), without in
any such case making effective provisions whereby all of the
outstanding notes are secured equally and ratably with, or prior
to, such Indebtedness so long as such Indebtedness is so secured.
Notwithstanding the foregoing, under the indenture, Energy
Transfer may, and may permit any of its Subsidiaries to, create,
assume, incur, or suffer to exist without securing the notes
(a) any Permitted Lien,
S-20
(b) any lien upon any Principal Property or capital stock
of a Restricted Subsidiary to secure Indebtedness of Energy
Transfer or any other Person, provided that the aggregate
principal amount of all Indebtedness then outstanding secured by
such lien and all similar liens under this clause (b),
together with all Attributable Indebtedness from Sale-Leaseback
Transactions (excluding Sale-Leaseback Transactions permitted by
clauses (1) through (4), inclusive, of the first paragraph
of the restriction on sale-leasebacks covenant described below),
does not exceed 10% of Consolidated Net Tangible Assets or
(c) any lien upon (i) any Principal Property that was
not owned by Energy Transfer or any of its Subsidiaries on the
date of the supplemental indenture creating the notes or
(ii) the capital stock of any Restricted Subsidiary that
owns no Principal Property that was owned by Energy Transfer or
any of its Subsidiaries on the date of the supplemental
indenture creating the notes, in each case owned by a Subsidiary
of Energy Transfer (an Excluded Subsidiary) that
(A) is not, and is not required to be, a Subsidiary
Guarantor and (B) has not granted any liens on any of its
property securing Indebtedness with recourse to Energy Transfer
or any Subsidiary of Energy Transfer other than such Excluded
Subsidiary or any other Excluded Subsidiary.
Restriction on Sale-Leasebacks.
Energy
Transfer will not, and will not permit any Subsidiary to, engage
in the sale or transfer by Energy Transfer or any of its
Subsidiaries of any Principal Property to a Person (other than
Energy Transfer or a Subsidiary) and the taking back by Energy
Transfer or its Subsidiary, as the case may be, of a lease of
such Principal Property (a Sale-Leaseback
Transaction), unless:
(1) such Sale-Leaseback Transaction occurs within one year
from the date of completion of the acquisition of the Principal
Property subject thereto or the date of the completion of
construction, development or substantial repair or improvement,
or commencement of full operations on such Principal Property,
whichever is later;
(2) the Sale-Leaseback Transaction involves a lease for a
period, including renewals, of not more than three years;
(3) Energy Transfer or such Subsidiary would be entitled to
incur Indebtedness secured by a lien on the Principal Property
subject thereto in a principal amount equal to or exceeding the
Attributable Indebtedness from such Sale-Leaseback Transaction
without equally and ratably securing the notes; or
(4) Energy Transfer or such Subsidiary, within a one-year
period after such Sale-Leaseback Transaction, applies or causes
to be applied an amount not less than the Attributable
Indebtedness from such Sale-Leaseback Transaction to
(a) the prepayment, repayment, redemption, reduction or
retirement of any Indebtedness of Energy Transfer or any of its
Subsidiaries that is not subordinated to the notes or any
guarantee, or (b) the expenditure or expenditures for
Principal Property used or to be used in the ordinary course of
business of Energy Transfer or its Subsidiaries.
Notwithstanding the foregoing, Energy Transfer may, and may
permit any Subsidiary to, effect any Sale-Leaseback Transaction
that is not excepted by clauses (1) through (4), inclusive,
of the preceding paragraph provided that the Attributable
Indebtedness from such Sale-Leaseback Transaction, together with
the aggregate principal amount of outstanding Indebtedness
(other than the notes) secured by liens other than Permitted
Liens upon Principal Properties, does not exceed 10% of
Consolidated Net Tangible Assets.
Reports.
So long as any notes are
outstanding, Energy Transfer will:
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for as long as it is required to file information with the SEC
pursuant to the Exchange Act, file with the trustee, within
15 days after it is required to file the same with the SEC,
copies of the annual reports and of the information, documents
and other reports which it is required to file with the SEC
pursuant to the Exchange Act;
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if it is not required to file reports with the SEC pursuant to
the Exchange Act, file with the trustee, within 15 days
after it would have been required to file with the SEC,
financial statements (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 what it would have been required to file with the SEC had it
been subject to the reporting requirements of the Exchange
Act; and
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S-21
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if it is required to furnish annual or quarterly reports to its
equity holders pursuant to the Exchange Act, it will file these
reports with the trustee.
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Merger, Consolidation or Sale of
Assets.
Energy Transfer shall not consolidate
with or merge into any Person or sell, lease, convey, transfer
or otherwise dispose of all or substantially all of its assets
to any Person unless:
(1) the Person formed by or resulting from any such
consolidation or merger or to which such assets have been
transferred (the successor) is Energy Transfer or
expressly assumes by supplemental indenture all of Energy
Transfers obligations and liabilities under the indenture
and the notes;
(2) the successor is organized under the laws of the United
States, any state or the District of Columbia;
(3) immediately after giving effect to the transaction no
Default or Event of Default has occurred and is continuing; and
(4) Energy Transfer has delivered to the trustee an
officers certificate and an opinion of counsel, each
stating that such consolidation, merger or transfer complies
with the indenture.
The successor will be substituted for Energy Transfer in the
indenture with the same effect as if it had been an original
party to the indenture. Thereafter, the successor may exercise
the rights and powers of Energy Transfer under the indenture. If
Energy Transfer conveys or transfers all or substantially all of
its assets, it will be released from all liabilities and
obligations under the indenture and under the notes except that
no such release will occur in the case of a lease of all or
substantially all of its assets.
Events of
Default
Each of the following is an Event of Default under the indenture
with respect to the notes of each series:
(1) a default in any payment of interest on such notes when
due that continues for 30 days;
(2) a default in the payment of principal of or premium, if
any, on such notes when due at their stated maturity, upon
redemption, upon declaration or otherwise;
(3) a failure by Energy Transfer or any Subsidiary
Guarantor to comply with its other covenants or agreements in
the indenture for 60 days after written notice of default given
by the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding notes;
(4) certain events of bankruptcy, insolvency or
reorganization of Energy Transfer or any Subsidiary Guarantor
(the bankruptcy provisions);
(5) any guarantee of a Subsidiary Guarantor ceases to be in
full force and effect, is declared null and void or is found to
be invalid in a judicial proceeding or any Subsidiary Guarantor
denies or disaffirms its obligations under the indenture or its
guarantee; or
(6) any Indebtedness of Energy Transfer or any Subsidiary
Guarantor is not paid within any applicable grace period after
final maturity or is accelerated by the holders thereof because
of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $25,000,000.
An Event of Default for the notes will not necessarily
constitute an Event of Default for any other series of debt
securities issued under the indenture, and an Event of Default
for any such other series of debt securities will not
necessarily constitute an Event of Default for any series of the
notes. Further, an event of default under other indebtedness of
Energy Transfer or its Subsidiaries will not necessarily
constitute a Default or an Event of Default for the notes. If an
Event of Default (other than an Event of Default described in
clause (4) above) with respect to the notes of any series
occurs and is continuing, the trustee by notice to Energy
Transfer, or the holders of at least 25% in principal amount of
the outstanding notes of such series by notice to Energy
Transfer and the trustee, may, and the trustee at the request of
such holders shall, declare the principal of, premium, if any,
and accrued and unpaid interest, if any, on all the notes of
such series to be due and payable. Upon such a declaration, such
principal, premium and accrued and unpaid interest will be due
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and payable immediately. The indenture provides that if an Event
of Default described in clause (4) above occurs, the
principal of, premium, if any, and accrued and unpaid interest
on the notes will become and be immediately due and payable
without any declaration of acceleration, notice or other act on
the part of the trustee or any holders. However, the effect of
such provision may be limited by applicable law.
The holders of a majority in principal amount of the outstanding
notes of the applicable series may, by written notice to the
trustee, rescind any acceleration with respect to the notes of
such series and annul its consequences if rescission would not
conflict with any judgment or decree of a court of competent
jurisdiction and all existing Events of Default with respect to
the notes of such series, other than the nonpayment of the
principal of, premium, if any, and interest on the notes that
have become due solely by such acceleration, have been cured or
waived.
Subject to the provisions of the indenture relating to the
duties of the trustee if an Event of Default occurs and is
continuing, the trustee will be under no obligation to exercise
any of the rights or powers under the indenture at the request
or direction of any of the holders of notes, unless such holders
have offered to the trustee reasonable indemnity or security
against any cost, liability or expense. Except to enforce the
right to receive payment of principal, premium, if any, or
interest when due, no holder of notes may pursue any remedy with
respect to the indenture or the notes, unless:
(1) such holder has previously given the trustee notice
that an Event of Default with respect to the notes is continuing;
(2) holders of at least 25% in principal amount of the
outstanding notes of the applicable series have requested in
writing that the trustee pursue the remedy;
(3) such holders have offered the trustee reasonable
security or indemnity against any cost, liability or expense;
(4) the trustee has not complied with such request within
60 days after the receipt of the request and the offer of
security or indemnity; and
(5) the holders of a majority in principal amount of the
outstanding notes of the applicable series have not given the
trustee a direction that, in the opinion of the trustee, is
inconsistent with such request within such
60-day
period.
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding notes of the applicable
series 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 trust or power conferred on the
trustee with respect to the notes of such series. The trustee,
however, may refuse to follow any direction that conflicts with
law or the indenture or that the trustee determines is unduly
prejudicial to the rights of any other holder of notes or that
would involve the trustee in personal liability.
The indenture provides that if a Default (that is, an event that
is, or after notice or the passage of time would be, an Event of
Default) with respect to the notes occurs and is continuing and
is known to the trustee, the trustee must mail to each holder of
notes notice of the Default within 90 days after it occurs.
Except in the case of a Default in the payment of principal of,
and premium, if any, or interest on the notes, the trustee may
withhold such notice, but only if and so long as the trustee in
good faith determines that withholding notice is in the
interests of the holders of notes. In addition, Energy Transfer
is required to deliver to the trustee, within 120 days
after the end of each fiscal year, an officers certificate
as to compliance with all covenants under the indenture and
indicating whether the signers thereof know of any Default or
Event of Default that occurred during the previous year. Energy
Transfer also is required to deliver to the trustee, within
30 days after the occurrence thereof, an officers
certificate specifying any Default or Event of Default, its
status and what action Energy Transfer is taking or proposes to
take in respect thereof.
Amendments
and Waivers
Amendments of the indenture may be made by Energy Transfer, the
Subsidiary Guarantors, if any, and the trustee with the written
consent of the holders of a majority in principal amount of the
debt securities of
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each affected series then outstanding under the indenture
(including consents obtained in connection with a tender offer
or exchange offer for debt securities). However, without the
consent of each holder of an affected note, no amendment may,
among other things:
(1) reduce the percentage in principal amount of notes
whose holders must consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any note;
(3) reduce the principal of or extend the stated maturity
of any note;
(4) reduce the premium payable upon the redemption of any
note as described above under Optional
Redemption;
(5) make any notes payable in money other than
U.S. dollars;
(6) impair the right of any holder to receive payment of
the principal of and premium, if any, and interest on such
holders note or to institute suit for the enforcement of
any payment on or with respect to such holders note;
(7) make any change in the amendment provisions which
require each holders consent or in the waiver provisions;
(8) release any security that may have been granted in
respect of the notes other than in accordance with the
indenture; or
(9) release the guarantee of any Subsidiary Guarantor other
than in accordance with the indenture or modify its guarantee in
any manner adverse to the holders.
The holders of a majority in principal amount of the outstanding
notes of any series may waive compliance by Energy Transfer with
certain restrictive covenants on behalf of all holders of notes
of such series, including those described under
Certain Covenants Limitations on
Liens and Certain Covenants
Restriction on Sale-Leasebacks. The holders of a majority
in principal amount of the outstanding notes of any series, on
behalf of all such holders, may waive any past or existing
Default or Event of Default with respect to the notes of such
series (including any such waiver obtained in connection with a
tender offer or exchange offer for the notes), except a Default
or Event of Default in the payment of principal, premium or
interest or in respect of a provision that under the indenture
cannot be modified or amended without the consent of the holder
of each outstanding note affected. A waiver by the holders of
notes of any series of compliance with a covenant, a Default or
an Event of Default will not constitute a waiver of compliance
with such covenant or such Default or Event of Default with
respect to any other series of debt securities issued under the
indenture to which such covenant, Default or Event of Default
applies.
Without the consent of any holder, Energy Transfer, the
Subsidiary Guarantors, if any, and the trustee may amend the
indenture to:
(1) cure any ambiguity, omission, defect or inconsistency;
(2) provide for the assumption by a successor of the
obligations of Energy Transfer under the indenture;
(3) provide for uncertificated notes in addition to or in
place of certificated notes;
(4) provide for the addition of any Subsidiary as a
Subsidiary Guarantor, or to reflect the release of any
Subsidiary Guarantor, in either case as provided in the
indenture;
(5) secure the notes or a guarantee;
(6) add to the covenants of Energy Transfer or any
Subsidiary Guarantor for the benefit of the holders or surrender
any right or power conferred upon Energy Transfer or any
Subsidiary Guarantor;
(7) make any change that does not adversely affect the
rights under the indenture of any holder;
S-24
(8) comply with any requirement of the SEC in connection
with the qualification of the indenture under the
Trust Indenture Act; and
(9) provide for a successor trustee.
The consent of the holders is not necessary under the indenture
to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the
proposed amendment. After an amendment with the consent of the
holders under the indenture becomes effective, Energy Transfer
is required to mail to all holders of notes a notice briefly
describing such amendment. However, the failure to give such
notice to all such holders, or any defect therein, will not
impair or affect the validity of the amendment.
Defeasance
and Discharge
Energy Transfer at any time may terminate all its obligations
under the indenture as they relate to the notes of any series
(legal defeasance), except for certain obligations,
including those respecting the defeasance trust and obligations
to register the transfer of or exchange the notes, to replace
mutilated, destroyed, lost or stolen notes and to maintain a
registrar and paying agent in respect of the notes.
Energy Transfer at any time may terminate its obligations under
the covenants described under Certain
Covenants (other than Merger, Consolidation or Sale
of Assets) and the bankruptcy provisions with respect to
each Subsidiary Guarantor, the guarantee provision and the
cross-acceleration provision described under
Events of Default above with respect to
the notes of any series (covenant defeasance).
Energy Transfer may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If Energy Transfer exercises its legal defeasance
option, payment of the notes of the applicable series may not be
accelerated because of an Event of Default. If Energy Transfer
exercises its covenant defeasance option for the notes, payment
of the notes of the applicable series may not be accelerated
because of an Event of Default specified in clause (3), (4)
(with respect only to a Subsidiary Guarantor), (5) or (6) under
Events of Default above. If Energy
Transfer exercises either its legal defeasance option or its
covenant defeasance option, each guarantee will terminate with
respect to the notes of the applicable series and any security
that may have been granted with respect to the notes of the
applicable series will be released.
In order to exercise either defeasance option, Energy Transfer
must irrevocably deposit in trust (the defeasance
trust) with the trustee money, U.S. Government
Obligations (as defined in the indenture) or a combination
thereof for the payment of principal, premium, if any, and
interest on the notes of the applicable series to redemption or
stated maturity, as the case may be, and must comply with
certain other conditions, including delivery to the trustee of
an opinion of counsel (subject to customary exceptions and
exclusions) to the effect that holders of the notes 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 and in the same manner and at the
same times as would have been the case if such defeasance had
not occurred. In the case of legal defeasance only, such opinion
of counsel must be based on a ruling of the Internal Revenue
Service or other change in applicable federal income tax law.
In the event of any legal defeasance, holders of the notes of
the applicable series would be entitled to look only to the
trust fund for payment of principal of and any premium and
interest on their notes until maturity.
Although the amount of money and U.S. Government
Obligations on deposit with the trustee would be intended to be
sufficient to pay amounts due on the notes at the time of their
stated maturity, if Energy Transfer exercises its covenant
defeasance option for the notes and the notes are declared due
and payable because of the occurrence of an Event of Default,
such amount may not be sufficient to pay amounts due on the
notes at the time of the acceleration resulting from such Event
of Default. Energy Transfer would remain liable for such
payments, however.
S-25
In addition, Energy Transfer may discharge all its obligations
under the indenture with respect to the notes of any series,
other than its obligation to register the transfer of and
exchange notes, provided that either:
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it delivers all outstanding notes of such series to the trustee
for cancellation; or
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all such notes not so delivered for cancellation have either
become due and payable or will become due and payable at their
stated maturity within one year or are called for redemption
within one year, and in the case of this bullet point, it has
deposited with the trustee in trust an amount of cash sufficient
to pay the entire indebtedness of such notes, including interest
to the stated maturity or applicable redemption date.
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Book-Entry
System
We have obtained the information in this section concerning The
Depository Trust Company, or DTC, and its book-entry
systems and procedures from DTC, but we take no responsibility
for the accuracy of this information. In addition, the
description in this section reflects our understanding of the
rules and procedures of DTC as they are currently in effect. DTC
could change its rules and procedures at any time.
The notes will initially be represented by one or more fully
registered global notes. Each such global note will be deposited
with, or on behalf of, DTC or any successor thereto and
registered in the name of Cede & Co. (DTCs
nominee). You may hold your interests in the global notes
through DTC either as a participant in DTC or indirectly through
organizations which are participants in DTC.
So long as DTC or its nominee is the registered owner of the
global securities representing the notes, DTC or such nominee
will be considered the sole owner and holder of the notes for
all purposes of the notes and the indenture. Except as provided
below, owners of beneficial interests in the notes will not be
entitled to have the notes registered in their names, will not
receive or be entitled to receive physical delivery of the notes
in definitive form and will not be considered the owners or
holders of the notes under the indenture, including for purposes
of receiving any reports delivered by us or the trustee pursuant
to the indenture. Accordingly, each person owning a beneficial
interest in a note must rely on the procedures of DTC or its
nominee and, if such person is not a participant, on the
procedures of the participant through which such person owns its
interest, in order to exercise any rights of a holder of notes.
The Depository Trust Company.
DTC
will act as securities depositary for the notes. The notes will
be issued as fully registered notes registered in the name of
Cede & Co. DTC has advised us as follows: DTC is
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a limited-purpose trust company organized under the New York
Banking Law;
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a banking organization under the New York Banking
Law;
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a member of the Federal Reserve System;
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a clearing corporation under the New York Uniform
Commercial Code; and
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a clearing agency registered under the provisions of
Section 17A of the Securities Exchange Act of 1934.
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DTC holds securities that its direct participants deposit with
DTC. DTC facilitates the settlement among direct participants of
securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry
changes in direct participants accounts, thereby
eliminating the need for physical movement of securities
certificates.
Direct participants of DTC include securities brokers and
dealers (including the underwriters), banks, trust companies,
clearing corporations, and certain other organizations. DTC is
owned by a number of its direct participants. Indirect access to
the DTC system is also available to securities brokers and
dealers, banks and trust companies that maintain a custodial
relationship with a direct participant.
If you are not a direct participant or an indirect participant
and you wish to purchase, sell or otherwise transfer ownership
of, or other interests in, notes, you must do so through a
direct participant or an indirect
S-26
participant. DTC agrees with and represents to DTC participants
that it will administer its book-entry system in accordance with
its rules and by-laws and requirements of law. The SEC has on
file a set of the rules applicable to DTC and its direct
participants.
Purchases of notes under DTCs system must be made by or
through direct participants, which will receive a credit for the
notes on DTCs records. The ownership interest of each
beneficial owner is in turn to be recorded on the records of
direct participants and indirect participants. Beneficial owners
will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the direct
participants or indirect participants through which such
beneficial owners entered into the transaction. Transfers of
ownership interests in the notes are to be accomplished by
entries made on the books of participants acting on behalf of
beneficial owners.
To facilitate subsequent transfers, all notes deposited with DTC
are registered in the name of DTCs nominee,
Cede & Co. The deposit of notes with DTC and their
registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the notes. DTCs records
reflect only the identity of the direct participants to whose
accounts such notes are credited, which may or may not be the
beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants
and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time.
Book-Entry Format.
Under the book-entry
format, the trustee will pay interest or principal payments to
Cede & Co., as nominee of DTC. DTC will forward the
payment to the direct participants, who will then forward the
payment to the indirect participants or to you as the beneficial
owner. You may experience some delay in receiving your payments
under this system. Neither we, the trustee under the indenture
nor any paying agent has any direct responsibility or liability
for the payment of principal or interest on the notes to owners
of beneficial interests in the notes.
DTC is required to make book-entry transfers on behalf of its
direct participants and is required to receive and transmit
payments of principal, premium, if any, and interest on the
notes. Any direct participant or indirect participant with which
you have an account is similarly required to make book-entry
transfers and to receive and transmit payments with respect to
the notes on your behalf. We, the underwriters and the trustee
under the indenture have no responsibility for any aspect of the
actions of DTC or any of its direct or indirect participants.
We, the underwriters and the trustee under the indenture have no
responsibility or liability for any aspect of the records kept
by DTC or any of its direct or indirect participants relating to
or payments made on account of beneficial ownership interests in
the notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. We also
do not supervise these systems in any way.
The trustee will not recognize you as a holder under the
indenture, and you can only exercise the rights of a holder
indirectly through DTC and its direct participants. DTC has
advised us that it will only take action regarding a note if one
or more of the direct participants to whom the note is credited
directs DTC to take such action and only in respect of the
portion of the aggregate principal amount of the notes as to
which that participant or participants has or have given that
direction. DTC can only act on behalf of its direct
participants. Your ability to pledge notes to non-direct
participants, and to take other actions, may be limited because
you will not possess a physical certificate that represents your
notes.
Neither DTC nor Cede & Co. (nor such other DTC
nominee) will consent or vote with respect to the notes unless
authorized by a direct participant in accordance with DTCs
procedures. Under its usual procedures, DTC will mail an omnibus
proxy to us as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.s consenting or
voting rights to those direct participants to whose accounts the
notes are credited on the record date (identified in a listing
attached to the omnibus proxy).
S-27
DTC has agreed to the foregoing procedures in order to
facilitate transfers of the notes among its participants.
However, DTC is under no obligation to perform or continue to
perform those procedures, and may discontinue those procedures
at any time.
Concerning
the Trustee
The indenture contains certain limitations on the right of the
trustee, should it become our creditor, to obtain payment of
claims in certain cases, or to realize for its own account on
certain property received in respect of any such claim as
security or otherwise. The trustee is permitted to engage in
certain other transactions. However, if it acquires any
conflicting interest within the meaning of the
Trust Indenture Act after a Default has occurred and is
continuing, it must eliminate the conflict within 90 days,
apply to the SEC for permission to continue as trustee or resign.
If an Event of Default occurs and is not cured or waived, the
trustee is required to exercise such of the rights and powers
vested in it by the 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.
Subject to such provisions, the trustee will not be under any
obligation to exercise any of its rights or powers under the
indenture at the request of any of the holders of notes unless
they have offered to the trustee reasonable security or
indemnity against the costs, expenses and liabilities it may
incur.
U.S. Bank National Association is the trustee under the
indenture and has been appointed by Energy Transfer as registrar
and paying agent with regard to the notes. The trustees
address is 5555 San Felipe, Suite 1150, Houston, Texas
77056. The trustee and its affiliates maintain commercial
banking and other relationships with Energy Transfer. See
Plan of Distribution for more information regarding
these relationships.
No
Personal Liability of Directors, Officers, Employees, Limited
Partners and Shareholders
The directors, officers, employees, limited partners and
shareholders of Energy Transfer and the General Partner will not
have any personal liability for our obligations under the
indenture or the notes. Each holder of notes, by accepting a
note, waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the
notes.
Governing
Law
The indenture and the notes are governed by, and will be
construed in accordance with, the laws of the State of New York.
Certain
Definitions
Attributable Indebtedness, when used with respect to
any Sale-Leaseback Transaction, means, as at the time of
determination, the present value (discounted at the rate set
forth or implicit in the terms of the lease included in such
transaction) of the total obligations of the lessee for rental
payments (other than amounts required to be paid on account of
property taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items that do not
constitute payments for property rights) during the remaining
term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended).
In the case of any lease that is terminable by the lessee upon
the payment of a penalty or other termination payment, such
amount shall be the lesser of the amount determined assuming
termination upon the first date such lease may be terminated (in
which case the amount shall also include the amount of the
penalty or termination payment, but no rent shall be considered
as required to be paid under such lease subsequent to the first
date upon which it may be so terminated) or the amount
determined assuming no such termination.
S-28
Consolidated Net Tangible Assets means, at any date
of determination, the total amount of assets of Energy Transfer
and its consolidated Subsidiaries after deducting therefrom:
(1) all current liabilities (excluding (A) any current
liabilities that by their terms are extendable or renewable at
the option of the obligor thereon to a time more than twelve
months after the time as of which the amount thereof is being
computed, and (B) current maturities of long-term debt); and
(2) the value (net of any applicable reserves) of all
goodwill, trade names, trademarks, patents and other like
intangible assets, all as set forth, or on a pro forma basis
would be set forth, on the consolidated balance sheet of Energy
Transfer and its consolidated Subsidiaries for Energy
Transfers most recently completed fiscal quarter for which
financial statements have been filed with the SEC, prepared in
accordance with generally accepted accounting principles.
Credit Agreement means the Amended and Restated
Credit Agreement, dated as of July 20, 2007, among Energy
Transfer, Wachovia Bank, National Association, as Administrative
Agent, and the other agents and lenders party thereto, and as
further amended, restated, refinanced, replaced or refunded from
time to time.
General Partner means Energy Transfer Partners GP,
L.P., a Delaware limited partnership, and its successors as
general partner of Energy Transfer.
Indebtedness of any Person at any date means any
obligation created or assumed by such Person for the repayment
of borrowed money or any guaranty thereof.
Permitted Liens means:
(1) liens upon rights-of-way for pipeline purposes;
(2) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
and encumbrances consisting of zoning restrictions, easements,
licenses, restrictions on the use of real property or minor
imperfections in title thereto and which do not in the aggregate
materially adversely affect the value of the properties
encumbered thereby or materially impair their use in the
operation of the business of Energy Transfer and its
Subsidiaries;
(3) rights reserved to or vested by any provision of law in
any municipality or public authority to control or regulate any
of the properties of Energy Transfer or any Subsidiary or the
use thereof or the rights and interests of Energy Transfer or
any Subsidiary therein, in any manner under any and all laws;
(4) rights reserved to the grantors of any properties of
Energy Transfer or any Subsidiary, and the restrictions,
conditions, restrictive covenants and limitations, in respect
thereto, pursuant to the terms, conditions and provisions of any
rights-of-way agreements, contracts or other agreements
therewith;
(5) any statutory or governmental lien or lien arising by
operation of law, or any mechanics, repairmens,
materialmens, suppliers, carriers,
landlords, warehousemens or similar lien incurred in
the ordinary course of business which is not more than sixty
(60) days past due or which is being contested in good
faith by appropriate proceedings and any undetermined lien which
is incidental to construction, development, improvement or
repair;
(6) any right reserved to, or vested in, any municipality
or public authority by the terms of any right, power, franchise,
grant, license, permit or by any provision of law, to purchase
or recapture or to designate a purchaser of, any property;
(7) liens for taxes and assessments which are (a) for
the then current year, (b) not at the time delinquent, or
(c) delinquent but the validity or amount of which is being
contested at the time by Energy Transfer or any of its
Subsidiaries in good faith by appropriate proceedings;
(8) liens of, or to secure performance of, leases, other
than capital leases;
(9) any lien in favor of Energy Transfer or any Subsidiary;
S-29
(10) any lien upon any property or assets of Energy
Transfer or any Subsidiary in existence on the date of the
initial issuance of the notes;
(11) any lien incurred in the ordinary course of business
in connection with workmens compensation, unemployment
insurance, temporary disability, social security, retiree health
or similar laws or regulations or to secure obligations imposed
by statute or governmental regulations;
(12) liens in favor of any person to secure obligations
under provisions of any letters of credit, bank guarantees,
bonds or surety obligations required or requested by any
governmental authority in connection with any contract or
statute, provided that such obligations do not constitute
Indebtedness; or any lien upon or deposits of any assets to
secure performance of bids, trade contracts, leases or statutory
obligations, and other obligations of a like nature incurred in
the ordinary course of business;
(13) any lien upon any property or assets created at the
time of acquisition of such property or assets by Energy
Transfer or any of its Subsidiaries or within one year after
such time to secure all or a portion of the purchase price for
such property or assets or debt incurred to finance such
purchase price, whether such debt was incurred prior to, at the
time of or within one year after the date of such acquisition;
(14) any lien upon any property or assets to secure all or
part of the cost of construction, development, repair or
improvements thereon or to secure Indebtedness incurred prior
to, at the time of, or within one year after completion of such
construction, development, repair or improvements or the
commencement of full operations thereof (whichever is later), to
provide funds for any such purpose;
(15) any lien upon any property or assets existing thereon
at the time of the acquisition thereof by Energy Transfer or any
of its Subsidiaries and any lien upon any property or assets of
a Person existing thereon at the time such Person becomes a
Subsidiary of Energy Transfer by acquisition, merger or
otherwise; provided that, in each case, such lien only encumbers
the property or assets so acquired or owned by such Person at
the time such Person becomes a Subsidiary;
(16) liens imposed by law or order as a result of any
proceeding before any court or regulatory body that is being
contested in good faith, and liens which secure a judgment or
other court-ordered award or settlement as to which Energy
Transfer or the applicable Subsidiary has not exhausted its
appellate rights;
(17) any extension, renewal, refinancing, refunding or
replacement (or successive extensions, renewals, refinancing,
refunding or replacements) of liens, in whole or in part,
referred to in clauses (1) through (16) above;
provided, however, that any such extension, renewal,
refinancing, refunding or replacement lien shall be limited to
the property or assets covered by the lien extended, renewed,
refinanced, refunded or replaced and that the obligations
secured by any such extension, renewal, refinancing, refunding
or replacement lien shall be in an amount not greater than the
amount of the obligations secured by the lien extended, renewed,
refinanced, refunded or replaced and any expenses of Energy
Transfer or its Subsidiaries (including any premium) incurred in
connection with such extension, renewal, refinancing, refunding
or replacement; or
(18) any lien resulting from the deposit of moneys or
evidence of indebtedness in trust for the purpose of defeasing
Indebtedness of Energy Transfer or any of its Subsidiaries.
Person means any individual, corporation,
partnership, limited liability company, joint venture,
incorporated or unincorporated association, joint-stock company,
trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
Principal Property means, whether owned or leased on
the date of the initial issuance of the notes or thereafter
acquired:
(1) any pipeline assets of Energy Transfer or any of its
Subsidiaries, including any related facilities employed in the
gathering, transportation, distribution, storage or marketing of
natural gas, refined
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petroleum products, natural gas liquids and petrochemicals, that
are located in the United States of America or any territory or
political subdivision thereof; and
(2) any processing, compression, treating, blending or
manufacturing plant or terminal owned or leased by Energy
Transfer or any of its Subsidiaries that is located in the
United States or any territory or political subdivision thereof,
except in the case of either of the preceding clauses (1)
or (2):
(a) any such assets consisting of inventories, furniture,
office fixtures and equipment (including data processing
equipment), vehicles and equipment used on, or useful with,
vehicles;
(b) any such assets which, in the opinion of the board of
directors of the General Partner are not material in relation to
the activities of Energy Transfer and its Subsidiaries taken as
a whole; and
(c) any assets used primarily in the conduct of the retail
propane marketing business conducted by Heritage Operating, L.P.
and its Subsidiaries.
Restricted Subsidiary means any Subsidiary owning or
leasing, directly or indirectly through ownership in another
Subsidiary, any Principal Property.
Subsidiary means, with respect to any Person, any
corporation, association or business entity of which more than
50% of the total voting power of the equity interests entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof or any
partnership of which more than 50% of the partners equity
interests (considering all partners equity interests as a
single class) is, in each case, at the time owned or controlled,
directly or indirectly, by such Person or one or more
Subsidiaries of such Person or a combination thereof.
Subsidiary Guarantor means each Subsidiary of Energy
Transfer that guarantees the notes pursuant to the terms of the
indenture but only so long as such Subsidiary is a guarantor
with respect to the notes on the terms provided for in the
indenture.
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