ex4_1.htm


    
      

    

     

     

    
      FIFTH
        SUPPLEMENTAL INDENTURE

       

      


    

    between

     

    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP

     

    Issuer

     

    and

     

    THE
      BANK
      OF NEW YORK TRUST COMPANY, N.A

     

    Trustee

     

    
      Dated
        as
        of October 26, 2007

       

      


    

    


     


    
      
              

                  
      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Table
      of
      Contents

     

     

    ARTICLE
      I

     

     

    DEFINITIONS

     

    
      	
               

            	
              SECTION
                1.1Definition of Terms.                                                                                          3

            


    

     

    ARTICLE
      II

     

     

    GENERAL
      TERMS AND CONDITIONS OF THE SENIOR NOTES

     

    
      	
               

            	
              SECTION
                2.1Designation and Principal Amount of the Senior Notes.                                                                    10

            


    

    
      	
               

            	
              SECTION
                2.2Maturity of the Senior Notes.                                                                            10

            


    

    
      	
               

            	
              SECTION
                2.3Interest on the Senior Notes.                                                                                    10

            


    

    
      	
               

            	
              SECTION
                2.4Form of the Senior Notes.                                                                                      10

            


    

    
      	
               

            	
              SECTION
                2.5Redemption of the Senior Notes.                                                                                10

            


    

     

    ARTICLE
      III

     

     

    COVENANTS

     

    
      	
               

            	
              SECTION
                3.1Limitation on Restricted Payments.                                                                                11

            


    

    
      	
               

            	
              SECTION
                3.2Limitation on Liens.                                                                                        12

            


    

    
      	
               

            	
              SECTION
                3.3Restriction on Sale-Leasebacks.                                                                                16

            


    

    
      	
               

            	
              SECTION
                3.4Financial Information.                                                                                        18

            


    

    
      	
               

            	
              SECTION
                3.5Applicability of Covenants.                                                                                    19

            


    

     

    ARTICLE
      IV

     

     

    DEFAULT

     

    
      	
               

            	
              SECTION
                4.1General.                                                                                                19

            


    

    
      	
               

            	
              SECTION
                4.2Additional Event of Default.                                                                                    19

            


    

     

    ARTICLE
      V

     

     

    DEFEASANCE

     

    
      	
               

            	
              SECTION
                5.1General.                                                                                                19

            


    

    
      	
               

            	
              SECTION
                5.2Covenant Defeasance.                                                                                       19

            


    

     

    ARTICLE
      VI

     

     

    FORM
      OF
      SENIOR NOTES

     

    
      	
               

            	
              SECTION
                6.1Form of Senior Notes.                                                                                        20

            


    

     

    ARTICLE
      VII

     

     

    ISSUANCE
      OF SENIOR NOTES

     

    
      	
               

            	
              SECTION
                7.1Original Issue of Senior Notes.                                                                                28

            


    

    
      	
               

            	
              SECTION
                7.2Additional Senior Notes.                                                                                    28

            


    


    
      
              

                            
                          
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              ARTICLE
                VIII

            


    

    
      	
               

            	
              MISCELLANEOUS

            


    

    
      	
               

            	
              SECTION
                8.1Consent, Amendment and Waiver.                                                                                28

            


    

    
      	
               

            	
              SECTION
                8.2Ratification of Indenture.                                                                                    29

            


    

    
      	
               

            	
              SECTION
                8.3Trustee Not Responsible for Recitals.                                                                            29

            


    

    
      	
               

            	
              SECTION
                8.4Governing Law.                                                                                        29

            


    

    
      	
               

            	
              SECTION
                8.5Separability.                                                                                            29

            


    

    
      	
               

            	
              SECTION
                8.6Counterparts.                                                                                            29

            


    

    


     

    


     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    FIFTH
      SUPPLEMENTAL INDENTURE, dated as of October 26, 2007 (the “Fifth Supplemental
      Indenture”), between Panhandle Eastern Pipe Line Company, LP (formerly known as
      Panhandle Eastern Pipe Line Company, LLC and Panhandle Eastern Pipe Line
      Company), a Delaware limited partnership (the “Issuer”), and The Bank of New
      York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National
      Association), as trustee (the “Trustee”) under the indenture, dated as of March
      29, 1999, among the Issuer, CMS Panhandle Holding Company, a Michigan
      corporation, and NBD Bank, as trustee (the “Base Indenture” and, as so
      supplemented, the “Indenture”).

     

    WHEREAS,
      CMS Panhandle Holding Company and the Issuer executed and delivered the Base
      Indenture to NBD Bank to provide for the future issuance of CMS Panhandle
      Holding Company’s unsecured debt securities guaranteed by the Issuer, to be
      issued from time to time in one or more series as might be determined by CMS
      Panhandle Holding Company under the Indenture, in an unlimited aggregate
      principal amount which may be authenticated and delivered as provided in the
      Base Indenture;

     

    WHEREAS,
      the Issuer, CMS Panhandle Holding Company, and NBD Bank executed the First
      Supplemental Indenture, dated as of March 29, 1999, under which CMS Panhandle
      Holding Company issued a series of Debt Securities in three tranches known
      as
      its 6.125% Senior Notes due 2004, 6.500% Senior Notes due 2009 and 7.000% Senior
      Notes due 2029 in aggregate principal amounts of $300,000,000, $200,000,000
      and
      $300,000,000, respectively;

     

    WHEREAS,
      Panhandle Eastern Pipe Line Company became the Issuer as provided for in the
      Base Indenture as a result of the merger of CMS Panhandle Holding Company into
      Panhandle Eastern Pipe Line Company, effective June 15, 1999, and Bank One
      Trust
      Company, National Association became the Trustee provided for in the Base
      Indenture as a result of the merger of NBD Bank into Bank One Trust Company,
      National Association;

     

    WHEREAS,
      the Issuer and the Trustee executed the Second Supplemental Indenture, dated
      as
      of March 27, 2000, under which the Issuer issued a series of Debt Securities
      known as its 8.25% Senior Notes due 2010, Series A, in the principal amount
      of
      $100,000,000 (the “2010 A Senior Notes”), and a series of senior notes to be
      issued in exchange for the 2010 A Senior Notes, known as the Issuer’s “8.25%
      Senior Notes Due 2010, Series B,” in the principal amount of
      $100,000,000;

     

    WHEREAS,
      in June, 2003, Southern Union Panhandle, LLC, a wholly-owned subsidiary of
      Southern Union Company (“Southern Union”), acquired all of the outstanding
      capital stock of the Issuer, after which Southern Union caused Panhandle Eastern
      Pipe Line Company to convert to a Delaware limited liability
      company;

     

    WHEREAS,
      the Issuer and the Trustee executed the Third Supplemental Indenture, dated
      as
      of August 18, 2003, to provide for the establishment of two new series of its
      Debt Securities: (i) the 4.80% Senior Notes due 2008 in the initial principal
      amount of $300,000,000, consisting of two tranches, the first tranche of 4.80%
      Senior Notes due 2008 known as “4.80% Senior Notes due 2008, Series A” (the
“4.80% Series A Notes”), and the second tranche of 4.80% Senior Notes due 2008
      to be issued in exchange for the 4.80% Series A Notes, known as “4.80% Senior
      Notes due 2008, Series B”; and (ii) the 6.05% Senior Notes due 2013 in the
      initial

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    principal
      amount of $250,000,000, consisting of two tranches, the first tranche of 6.05%
      Senior Notes due 2013 known as “6.05% Senior Notes due 2013, Series A” (the
“6.05% Series A Notes”), and the second tranche of 6.05% Senior Notes due 2013
      to be issued in exchange for the 6.05% Series A Notes, known as the “6.05%
      Senior Notes due 2013, Series B”;

     

    WHEREAS,
      J.P. Morgan Trust Company, National Association became the Trustee provided
      for
      in the Base Indenture as a result of the assumption of certain assets of Bank
      One Trust Company, National Association by a merger subsidiary which later
      merged with and into J.P. Morgan Trust Company, National
      Association;

     

    WHEREAS,
      the Issuer and Trustee executed the Fourth Supplemental Indenture, dated of
      a
      March 12, 2004, under which the Issuer issued two new series of its Debt
      Securities: (i) the 2.75% Senior Notes due 2007, Series A, in the initial
      principal amount of $200,000,000 (the “Series A Notes”), and (ii) the second
      series, to be issued in exchange for the Series A Notes, known as the “2.75%
      Senior Notes due 2007, Series B”;

     

    WHEREAS,
      in June 2004, the Issuer converted from a Delaware limited liability company
      to
      a Delaware limited partnership;

     

    WHEREAS,
      in October 2006, The Bank of New York Trust Company, N.A. became the Trustee
      provided for in the Base Indenture as a result of the sale by The Bank of New
      York Company, Inc. of its retail and regional middle market banking business
      to
      JP Morgan Chase & Co. in exchange for, among other things, the acquisition
      of J.P. Morgan Trust Company, National Association;

     

    WHEREAS,
      the Issuer desires to issue a new series of Debt Securities known as the 6.20%
      Senior Notes due 2017, in the principal amount of $300,000,000 (the “Senior
      Notes”), the form and substance of such Senior Notes and the terms, provisions
      and conditions thereof to be set forth as provided in the Base Indenture and
      this Fifth Supplemental Indenture,

     

    WHEREAS,
      there is no limit on the amount of Additional Senior Notes (as defined below)
      that may be issued after the initial issuance of the Initial Senior Notes (as
      defined below), provided that at the time of issuance of any Additional
      Senior Notes no Default or Event of Default shall have occurred and be
      continuing;

     

    WHEREAS,
      on October 23, 2007, the Issuer registered the Senior Notes under the Securities
      Act pursuant to the Post-Effective Amendment No. 1 to Form S-3 Registration
      Statement (Registration No. 333-137998);

     

    WHEREAS,
      the Issuer wishes to amend and add certain provisions to the Base Indenture
      for
      the benefit of the holders of the Senior Notes; and

     

    WHEREAS,
      the Issuer has requested that the Trustee execute and deliver this Fifth
      Supplemental Indenture, and all requirements necessary to make this Fifth
      Supplemental Indenture a valid instrument, in accordance with its terms, and
      to
      make the Senior Notes, when executed by the Issuer and authenticated and
      delivered by the Trustee, the valid obligations of the Issuer, have been
      performed, and the execution and delivery of this Fifth Supplemental Indenture
      has been duly authorized in all respects:

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    NOW
      THEREFORE, in consideration of the purchase and acceptance of the Senior Notes
      to be issued hereunder by the holders thereof, and for the purpose of setting
      forth, as provided in the Indenture, the form and substance of the Senior Notes
      and the terms, provisions and conditions thereof, the Issuer covenants and
      agrees with the Trustee as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    SECTION
      1.1                                Definition
      of Terms.

     

    Unless
      the context otherwise requires:

     

    (a)           a
      term defined in the Base Indenture has the same meaning when used in this Fifth
      Supplemental Indenture;

     

    (b)           a
      term defined anywhere in this Fifth Supplemental Indenture has the same meaning
      throughout;

     

    (c)           the
      singular includes the plural and vice versa;

     

    (d)           a
      reference to a Section or Article is to a Section or Article of this
      Fifth Supplemental Indenture;

     

    (e)           headings
      are for convenience of reference only and do not affect
      interpretation;

     

    (f)           the
      following terms have the meanings given to them in this
      Section 1.01(f):

     

    “Additional
      Senior Notes” means any additional Senior Notes (other than Initial Senior
      Notes) issued from time to time under this Fifth Supplemental Indenture in
      accordance with Section 2.04 of the Base Indenture, as a part of the same series
      as the Initial Senior Notes; provided, that no Additional Senior Notes
      may be issued during the continuance of a Default or an Event of
      Default.

     

    “Adjusted
      Consolidated Net Income” means, for any period, the net income of the Issuer and
      its Consolidated Subsidiaries, plus (i) depreciation and amortization expense
      of
      the Issuer and its Consolidated Subsidiaries, (ii) income taxes and deferred
      taxes of the Issuer and its Consolidated Subsidiaries and (iii) other non-cash
      charges, in each case, determined on a consolidated basis in accordance with
      generally accepted accounting principles; provided, however,
      that there shall not be included in such Adjusted Consolidated Net Income any
      net income of any Person if such Person is not a Subsidiary, except that (A)
      the
      Issuer’s equity in the net income of any such Person for such period shall be
      included in such Adjusted Consolidated Net Income up to the aggregate amount
      of
      cash actually distributed by such Person during such period to the Issuer or
      a
      Consolidated Subsidiary of the Issuer as a dividend or other distribution and
      (B) the Issuer’s equity in a net loss of any such Person for such period shall
      be included in determining such Adjusted Consolidated Net Income.

     

    “Capital
      Stock” means any and all shares, interests, rights to purchase, warrants,
      options, participations or other equivalents of or interests in (however
      designated) corporate stock or

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    limited
      partnership interests, including any Preferred Stock or letter stock;
provided that Hybrid Preferred Securities are not considered Capital
      Stock for purposes of this definition.

     

    “Comparable
      Treasury Issue” means the United States Treasury security or securities selected
      by an Independent Investment Banker as having an actual or interpolated maturity
      comparable to the remaining term of the Senior Notes to be redeemed that would
      be utilized, at the time of selection and in accordance with customary financial
      practice, in pricing new issues of corporate debt securities of a comparable
      maturity to the remaining term of such Senior Notes.

     

    “Comparable
      Treasury Price” means, with respect to any redemption date, (A) the average of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (B) if the Trustee obtains fewer than four such Reference Treasury Dealer
      Quotations, the average of all such quotations.

     

    “Consolidated
      Debt” means the total Debt of the Issuer and its Consolidated Subsidiaries, as
      set forth on the consolidated balance sheet of the Issuer and its Consolidated
      Subsidiaries for the Issuer’s most recently completed fiscal quarter, prepared
      in accordance with generally accepted accounting principles.

     

    “Consolidated
      Interest Expense” means, for any period, the total interest expense in respect
      of Consolidated Debt of the Issuer and its Consolidated Subsidiaries, including,
      without duplication, (i) interest expense attributable to capital leases, (ii)
      amortization of debt discount, (iii) capitalized interest, (iv) cash and noncash
      interest payments, (v) commissions, discounts and other fees and charges owed
      with respect to letters of credit and bankers’ acceptance financing, (vi) net
      costs under Interest Rate Protection Agreements (including amortization of
      discount), and (vii) interest expense in respect of obligations of other Persons
      that constitutes Debt of the Issuer or any of its Consolidated Subsidiaries,
      provided, however, that Consolidated Interest Expense shall
      exclude any costs otherwise included in interest expense recognized on early
      retirement of debt.

     

    “Consolidated
      Net Tangible Assets” means, at any date of determination, the total amount of
      assets after deducting therefrom (i) all current liabilities (excluding (A)
      any
      current liabilities that by their terms are extendable or renewable at the
      option of the obligor thereon to a time more than 12 months after the time
      as of
      which the amount thereof is being computed, and (B) current maturities of
      long-term debt), and (ii) the value (net of any applicable reserves) of all
      goodwill, trade names, trademarks, patents and other like intangible assets,
      all
      as set forth on the consolidated balance sheet of the Issuer and its
      Consolidated Subsidiaries for the Issuer’s most recently completed fiscal
      quarter, prepared in accordance with generally accepted accounting
      principles.  “Intangible assets” does not include any value write-up
      of tangible assets in connection with acquisition transactions accounted for
      on
      a purchase method.

     

    “Consolidated
      Subsidiary” means any Subsidiary whose accounts are or are required to be
      consolidated with the accounts of the Issuer in accordance with generally
      accepted accounting principles.

     

    “DTC”
      means The Depository Trust Company, or any successor thereto.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    “Debt”
      means any obligation created or assumed by any Person for the repayment of
      money
      borrowed and any purchase money obligation created or assumed by such
      Person.

     

    “Depositary”
      means, with respect to the Global Notes, DTC.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.

     

    “Exchangeable
      Stock” means any Capital Stock of a corporation or a limited liability company
      that is exchangeable or convertible into another security (other than Capital
      Stock of such corporation or limited liability company that is neither
      Exchangeable Stock nor Redeemable Stock).

     

    “Fixed
      Charge Coverage Ratio” means the ratio of Adjusted Consolidated Net Income plus
      Consolidated Interest Expense to Consolidated Interest Expense, for the four
      fiscal quarters of the Issuer ending immediately prior to the date of
      determination.

     

    “Funded
      Debt” means all Debt maturing one year or more from the date of the creation
      thereof, all Debt directly or indirectly renewable or extendable, at the option
      of the debtor, by its terms or by the terms of any instrument or agreement
      relating thereto, to a date one year or more from the date of the creation
      thereof, and all Debt under a revolving credit or similar agreement obligating
      the lender or lenders to extend credit over a period of one year or
      more.

     

    “Global
      Note” means a Senior Note evidencing all or part of a series of Senior Notes,
      issued to the Depositary or its nominee with respect to such series of Senior
      Notes and registered in the name of such Depositary or nominee.

     

    “Holder”
      means a Person in whose name a Senior Note is registered.

     

    “Hybrid
      Preferred Securities” means preferred securities issued by a Hybrid Preferred
      Securities Subsidiary, where such preferred securities have the following
      characteristics: (i) such Hybrid Preferred Securities Subsidiary lends
      substantially all of the proceeds from the issuance of such preferred securities
      to the Issuer in exchange for subordinated debt issued by the Issuer; (ii)
      such
      preferred securities contain terms providing for the deferral of distributions
      corresponding to provisions providing for the deferral of interest payments
      on
      such subordinated debt; and (iii) the Issuer makes periodic interest payments
      on
      such subordinated debt, which interest payments are in turn used by the Hybrid
      Preferred Securities Subsidiary to make corresponding payments to the holders
      of
      the Hybrid Preferred Securities.

     

    “Hybrid
      Preferred Securities Subsidiary” means any business trust or limited partnership
      (or similar entity) (i) all of the common equity interest of which is owned
      (either directly or indirectly through one or more wholly-owned Subsidiaries
      of
      the Issuer) at all times by the Issuer, (ii) that has been formed for the
      purpose of issuing Hybrid Preferred Securities and (iii) substantially all
      of
      the assets of which consist at all times solely of subordinated debt issued
      by
      the Issuer and payments made from time to time on such subordinated
      debt.

     

    “Independent
      Investment Banker” means any of Banc of America Securities LLC, J.P. Morgan
      Securities Inc. and Wachovia Capital Markets, LLC (and their respective
      successors) or, if no such firm is willing and able to select the applicable
      Comparable Treasury Issue or perform

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    the
      other
      functions of the Independent Investment Banker provided in the Indenture, an
      independent investment banking institution of national standing appointed by
      us
      and reasonably acceptable to the Trustee.

     

    “Initial
      Senior Notes” means the initial $300,000,000 aggregate principal amount of
      Senior Notes issued under this Fifth Supplemental Indenture.

     

    “Interest
      Rate Protection Agreement” means any interest rate swap agreement, interest rate
      cap agreement or other financial agreement or arrangement designed to protect
      the Issuer or any of its Subsidiaries against fluctuations in interest
      rates.

     

    “Leverage
      Ratio” means 100% multiplied by the ratio of Consolidated Debt to Total Capital
      at the end of the most recent fiscal quarter preceding the date of
      determination.

     

    “Lien”
      means any mortgage, pledge, security interest, charge, lien or other encumbrance
      of any kind, whether or not filed, recorded or perfected under applicable
      law.

     

    “Loan”
      means any direct or indirect advance (other than advances to customers in the
      ordinary course of business that are recorded as receivables on the balance
      sheet of the Person making such advances), loan or other extension of credit
      (including by way of guarantee or similar arrangement) to another Person or
      any
      purchase of Debt issued by another Person, where such advance, loan, extension
      of credit or Debt is subordinated in right of payment to the senior creditors
      of
      the borrower.

     

    “Moody’s”
      means Moody’s Investors Service, Inc., and any successor thereto which is a
      nationally recognized statistical rating organization, or if such entity shall
      cease to rate the Senior Notes or shall cease to exist and there shall be no
      such successor thereto, any other nationally recognized statistical rating
      organization selected by the Issuer which is acceptable to the
      Trustee.

     

    “Non-Convertible
      Capital Stock” means, with respect to any corporation or any limited liability
      company, any non-convertible Capital Stock of such corporation or limited
      liability company and any Capital Stock of such corporation or limited liability
      company convertible solely into non-convertible Capital Stock other than
      Preferred Stock of such corporation or limited liability company;
provided, however, that Non-Convertible Capital Stock shall
      not include any Redeemable Stock or Exchangeable Stock.

     

    “Permitted
      Liens” means:

     

    (i)           Liens
      upon rights-of-way for pipeline purposes;

     

    (ii)           any
      governmental Lien, mechanics’, materialmen’s, carriers’ or similar Lien incurred
      in the ordinary course of business which is not yet due or which is being
      contested in good faith by appropriate proceedings and any undetermined Lien
      which is incidental to construction;

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    (iii)           the
      right reserved to, or vested in, any municipality or public authority by the
      terms of any right, power, franchise, grant, license, permit or by any provision
      of law, to purchase or recapture or to designate a purchaser of, any
      property;

     

    (iv)           Liens
      for taxes and assessments which are (A) for the then current year, (B) not
      at
      the time delinquent, or (C) delinquent but the validity of which is being
      contested at the time by the Issuer or any of its Subsidiaries in good
      faith;

     

    (v)           Liens
      of, or to secure performance of, leases;

     

    (vi)           any
      Lien upon, or deposits of, any assets in favor of any surety company or clerk
      of
      court for the purpose of obtaining indemnity or stay of judicial
      proceedings;

     

    (vii)           any
      Lien upon property or assets acquired or sold by the Issuer or any Restricted
      Subsidiary resulting from the exercise of any rights arising out of defaults
      on
      receivables;

     

    (viii)                      any
      Lien incurred in the ordinary course of business in connection with workmen’s
      compensation, unemployment insurance, temporary disability, social security,
      retiree health or similar laws or regulations or to secure obligations imposed
      by statute or governmental regulations;

     

    (ix)           any
      Lien upon any property or assets in accordance with customary banking practice
      to secure any Debt incurred by the Issuer or any Restricted Subsidiary in
      connection with the exporting of goods to, or between, or the marketing of
      goods
      in, or the importing of goods from, foreign countries; or

     

    (x)           any
      Lien in favor of the United States of America or any state thereof, or any
      other
      country, or any political subdivision of any of the foregoing, to secure
      partial, progress, advance or other payments pursuant to any contract or
      statute, or any Lien securing industrial development, pollution control or
      similar revenue bonds.

     

    “Principal
      Property” means any natural gas pipeline system, natural gas gathering system or
      natural gas storage facility located in the United States, except any such
      property that in the opinion of the Board of Directors is not of material
      importance to the business conducted by the Issuer and its Consolidated
      Subsidiaries taken as a whole.

     

    “Prospectus”
      shall mean the prospectus included in the Registration Statement, including
      any
      preliminary prospectus, and any such prospectus as amended or supplemented
      by
      any prospectus supplement, including any such prospectus supplement with respect
      to the terms of the offering of any portion of the Senior Notes covered by
      the
      Registration Statement, and by all other amendments and supplements to a
      prospectus, including post-effective amendments, and in each case including
      all
      material incorporated by reference therein.

     

    “Redeemable
      Stock” means any Capital Stock that by its terms or otherwise is required to be
      redeemed prior to the 90th day before the stated maturity of any of the
      outstanding Senior Notes of any series or is redeemable at the option of the
      holder thereof at any time prior to the 90th day before the stated maturity
      of
      any of the outstanding Senior Notes of either series.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    “Reference
      Treasury Dealer” means each of Banc of America Securities LLC, J.P. Morgan
      Securities Inc., and Wachovia Capital Markets, LLC (in each case, or its
      affiliates and its successors); if any of the Reference Treasury Dealers resign,
      the respective successor dealer shall be (1) a primary U.S. Government
      Securities dealer in the City of New York (a “Primary Treasury Dealer”), and (2)
      any other Primary Treasury Dealer selected by the Company.

     

    “Reference
      Treasury Dealer Quotations”  means, with respect to each Reference
      Treasury Dealer and any redemption date, the average, as determined by the
      Trustee, of the bid and asked prices for the Comparable Treasury Issue
      (expressed in each case as a percentage of its principal amount) quoted in
      writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New
      York time on the third Business Day preceding such redemption date.

     

    “Registration
      Statement” means that certain Post-Effective Amendment No. 1 to Form S-3
      Registration Statement (Registration no. 333-137998) filed with the SEC by
      Issuer and Southern Union on October 23, 2007.

     

    “Restricted
      Subsidiary” means any Subsidiary of the Issuer owning or leasing any Principal
      Property.

     

    “Rule
      144A” means Rule 144A under the Securities Act.

     

    “Sale-Leaseback
      Transaction” means, with respect to the Issuer or any Restricted Subsidiary, the
      sale or transfer by the Issuer or such Restricted Subsidiary of any Principal
      Property to a Person (other than the Issuer or a Subsidiary of the Issuer)
      and
      the taking back by the Issuer or such Restricted Subsidiary, as the case may
      be,
      of a lease of such Principal Property.  With respect to the Issuer,
“Sale-Leaseback Transaction” means the sale or transfer by the Issuer of any
      assets or property to another Person and the taking back by the Issuer of a
      lease of such assets or property.

     

    “SEC”
      means the Securities and Exchange Commission, as from time to time constituted,
      created under the Securities Exchange Act of 1934, as amended, or, if at any
      time after the execution of this Fifth Supplemental Indenture such Commission
      is
      not existing and performing the duties now assigned to it under the Trust
      Indenture Act, then the body performing such duties at such time.

     

    “Securities
      Act” means the Securities Act of 1933, as amended.

     

    “Senior
      Notes” has the meaning assigned to it in the recitals to this Fifth Supplemental
      Indenture.  The Initial Senior Notes and the Additional Senior Notes
      shall be treated as a single class for all purposes under this Fifth
      Supplemental Indenture, and unless the context otherwise requires, all
      references to the Senior Notes shall include the Initial Senior Notes and any
      Additional Senior Notes.

     

    “Standard
      & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
      Companies, Inc., and any successor thereto which is a nationally recognized
      statistical rating organization, or if such entity shall cease to rate the
      Senior Notes or shall cease to exist and there shall be no such successor
      thereto, any other nationally recognized statistical rating organization
      selected by the Issuer which is acceptable to the Trustee.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    “Subsidiary”
      means, with respect to any Person, (i) any corporation at least a majority
      of
      whose outstanding Voting Stock shall at the time be owned, directly or
      indirectly, by such Person or by one or more of its Subsidiaries or by such
      Person and one or more of its Subsidiaries, (ii) any limited liability company,
      general partnership, joint venture or similar entity, at least a majority of
      whose outstanding membership, partnership or similar interests shall at the
      time
      be owned by such Person, or by one or more of its Subsidiaries, or by such
      Person and one or more of its Subsidiaries and (iii) any limited partnership
      of
      which such Person or any of its Subsidiaries is a general partner.

     

    “Total
      Capital” means the sum of (i) Consolidated Debt and (ii) Capital Stock, Hybrid
      Preferred Securities, premium on Capital Stock, capital surplus, capital in
      excess of par value and retained earnings (however the foregoing may be
      designated), less, to the extent not otherwise deducted, the cost of shares
      of
      Capital Stock of the Issuer held in treasury, all as set forth on the
      consolidated balance sheet of the Issuer and its Consolidated Subsidiaries
      for
      the Issuer’s most recently completed fiscal quarter, prepared in accordance with
      generally accepted accounting principles.

     

    “Treasury
      Rate” means, with respect to any redemption date, the rate per annum equal to
      the semiannual equivalent yield to maturity or interpolated (on a day count
      basis) of the Comparable Treasury Issue, assuming a price for the Comparable
      Treasury Issue (expressed as a percentage of its principal amount) equal to
      the
      Comparable Treasury Price for such redemption date.

     

    “Voting
      Stock” means securities of any class or classes the holders of which are
      ordinarily, in the absence of contingencies, entitled to vote for corporate
      directors or managers (in the case of a limited liability company) (or persons
      performing similar functions).

     

    (g)           solely
      for purposes of this Fifth Supplemental Indenture,

     

    (1)           the
      defined term “Business Day” contained in Section 1.01 of the Base Indenture
      shall be replaced in its entirety by the following new definition:

     

    “Business
      Day” means a day on which banking institutions in the Borough of Manhattan, New
      York, New York are not authorized or required by law or regulation to close;
      and

     

    (2)           the
      defined term “Board of Directors” contained in Section 1.01 of the Base
      Indenture shall be deemed to include the Board of Managers of a limited
      liability company.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    


     

    GENERAL
      TERMS AND CONDITIONS OF THE SENIOR NOTES

     

    SECTION
      1.2                                Designation
      and Principal Amount of the Senior Notes.

     

    There
      is
      hereby authorized a single series of Debt Securities designated as the “6.20%
      Senior Notes due 2017”, the principal amount of which shall be as set forth in
      any written order of the Issuer for the authentication and delivery of Senior
      Notes pursuant to Section 2.4 of the Base Indenture; provided,
      however, that Additional Senior Notes may be issued by the Issuer at any
      time subject to the terms and conditions of the Base Indenture and this Fifth
      Supplemental Indenture, provided, that at the time of such issuance no
      Default or Event of Default shall have occurred and be continuing.

     

    The
      initial principal amount of the Senior Notes shall be $300,000,000.

     

    SECTION
      1.3                                Maturity
      of the Senior Notes.

     

    The
      Senior Notes will mature on November 1, 2017.

    


    SECTION
      1.4                                Interest
      on the Senior Notes.

     

    Interest
      shall accrue from the date set forth, and shall be payable on the Senior Notes
      in the amount and as otherwise set forth, in the form of such Senior Note
      appearing in Article VI of this Fifth Supplemental Indenture.

    


    SECTION
      1.5                                Form
      of the Senior Notes.

     

    The
      form
      of the Senior Notes shall be substantially in the form provided for in Article
      VI.  The terms of the Senior Notes form part of this Fifth
      Supplemental Indenture.  The Senior Notes shall be represented by one
      or more Global Notes in definitive, registered form, without interest
      coupons.  The Senior Notes will be represented by one or more Global
      Notes in definitive, registered form, without interest coupons.  The
      Senior Notes will be initially issued as Global Notes registered in the name
      of
      Cede & Co. (as nominee for DTC, New York, New York, which, together with its
      nominees and their successors, is hereby designated the Depositary for the
      Senior Notes).

     

    SECTION
      1.6                                Redemption
      of the Senior Notes.

     

    The
      Senior Notes will be redeemable as a whole or in part, at the option of the
      Issuer at any time, at a redemption price equal to the greater of (i) 100%
      of
      the principal amount of such Senior Notes and (ii) the sum of the present values
      of the remaining scheduled payments of principal and interest thereon (exclusive
      of interest accrued to the date of redemption) discounted to the redemption
      date
      on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
      months) at the Treasury Rate plus 30 basis points, plus, in either case, accrued
      and unpaid interest thereon to the date of redemption.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    Notice
      of
      any redemption will be mailed at least 30 days but not more than 60 days
      before the redemption date by the Issuer or by the Trustee on the Issuer’s
      behalf to each Holder of Senior Notes to be redeemed.

     

    Unless
      the Issuer defaults in payment of the redemption price, on and after the
      applicable redemption date interest will cease to accrue on the Senior Notes
      or
      portions thereof called for redemption.

     

    ARTICLE
      II

     

    COVENANTS

     

    SECTION
      2.1                                Limitation
      on Restricted Payments.

     

    (a)           So
      long as any of the Senior Notes are outstanding and during any time that such
      Senior Notes are rated below Baa3 (or an equivalent rating) by Moody’s and below
      BBB- (or an equivalent rating) by Standard & Poor’s, the Issuer will not,
      and will not permit any of its Restricted Subsidiaries, directly or indirectly,
      to:

     

    (i)           declare
      or pay any dividend or make any distribution on the Capital Stock of the Issuer
      to the direct or indirect holders of its Capital Stock (except dividends or
      distributions payable solely in its Non-Convertible Capital Stock or in options,
      warrants or other rights to purchase such Non-Convertible Capital Stock and
      except dividends or distributions payable to the Issuer or a Subsidiary of
      the
      Issuer);

     

    (ii)           purchase,
      redeem or otherwise acquire or retire for value any Capital Stock of the Issuer;
      or

     

    (iii)           make
      any Loan to Southern Union or any of its Affiliates that is not a Subsidiary
      of
      the Issuer;

     

    (iv)           (any
      such dividend, distribution, purchase, redemption, other acquisition, retirement
      or Loan described in (i) through (iii) above being hereinafter referred to
      as a
“Restricted Payment”), unless at the time the Issuer or such Restricted
      Subsidiary makes such Restricted Payment and after giving effect
      thereto:

     

    (1)           no
      Default or Event of Default shall have occurred and be continuing (or would
      result therefrom);

     

    (2)           the
      Issuer’s Fixed Charge Coverage Ratio is greater than or equal to 2.2;
      and

     

    (3)           the
      Issuer’s Leverage Ratio is less than or equal to 55%.

     

    Notwithstanding
      the foregoing, the Issuer or any of its Restricted Subsidiaries may declare,
      make or pay any Restricted Payment, if at the time the Issuer or such Restricted
      Subsidiary makes such Restricted Payment and after giving effect
      thereto:

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    (1)           no
      Default or Event of Default shall have occurred and be continuing (or would
      result therefrom); and

     

    (2)           the
      aggregate amount of such Restricted Payment and all other Restricted Payments
      made since the original date of issuance of the Initial Senior Notes would
      not
      exceed the sum of:

     

    (A)           $175
      million;

     

    (B)           75%
      of Adjusted Consolidated Net Income accumulated since the original date of
      issuance of the Initial Senior Notes to the end of the most recent fiscal
      quarter ending at least 45 days prior to the date of such Restricted Payment;
      and

     

    (C)           the
      aggregate net cash proceeds received by the Issuer after the original date
      of
      issuance of the Initial Senior Notes from capital contributions or the issuance
      of Capital Stock of the Issuer to a Person who is not a Subsidiary of the
      Issuer, or from the issuance to such a Person of options, warrants or other
      rights to acquire such Capital Stock of the Issuer.

     

    None
      of
      the foregoing provisions will prohibit:

     

    (i)           dividends
      or other distributions paid in respect of any class of Capital Stock issued
      by
      the Issuer in connection with the acquisition of any business or assets by
      the
      Issuer or a Restricted Subsidiary where the dividends or other distributions
      with respect to such Capital Stock are payable solely from the net earnings
      of
      such business or assets;

     

    (ii)           any
      purchase or redemption of Capital Stock of the Issuer made by exchange for,
      or
      out of the proceeds of the substantially concurrent sale of, Non-Convertible
      Capital Stock of the Issuer; or

     

    (iii)           dividends
      paid within 60 days after the date of declaration thereof if at such date of
      declaration such dividends would have complied with this covenant.

     

    SECTION
      2.2                                Limitation
      on Liens.

     

    (a)           The
      Issuer shall not, nor will it permit any Restricted Subsidiary to, create,
      assume, incur or suffer to exist any Lien upon any Principal Property, whether
      owned or leased on the date of the Indenture or thereafter acquired, to secure
      any Debt of the Issuer or any other Person (other than the Senior Notes),
      without in any such case making effective provision whereby all of the Senior
      Notes outstanding shall be secured equally and ratably with, or prior to, such
      Debt so long as such Debt shall be so secured.  There is excluded from
      this restriction:

     

    (i)           any
      Lien upon any property or assets of the Issuer or any Restricted Subsidiary
      in
      existence on the date of the Indenture or created pursuant to an “after-acquired
      property” clause or similar term in existence on the date of the
      Indenture

     

    (ii)           or
      any mortgage, pledge agreement, security agreement or other similar instrument
      in existence on the date of the Indenture;

     

    (iii)           any
      Lien upon any property or assets created at the time of acquisition of such
      property or assets by the Issuer or any Restricted Subsidiary or within 18
      months after such time to secure all or a portion of the purchase price for
      such
      property or assets or Debt incurred to finance such purchase price, whether
      such
      Debt was incurred prior to, at the time of or within 18 months of such
      acquisition;

     

    (iv)           any
      Lien upon any property or assets existing thereon at the time of the acquisition
      thereof by the Issuer or any Restricted Subsidiary (whether or not the
      obligations secured thereby are assumed by the Issuer or any Restricted
      Subsidiary);

     

    (v)           any
      Lien upon any property or assets of a Person existing thereon at the time such
      Person becomes a Restricted Subsidiary by acquisition, merger or otherwise
      (whether or not such Lien was created in anticipation of such
      acquisition);

     

    (vi)           any
      Lien securing obligations assumed by the Issuer or any Restricted Subsidiary
      existing at the time of the acquisition by the Issuer or any Restricted
      Subsidiary of the property or assets subject to such Lien or at the time of
      the
      acquisition of the Person which owns such property or assets;

     

    (vii)           any
      Lien on property to secure all or part of the cost of construction or
      improvements thereon or to secure Debt incurred prior to, at the time of, or
      within 18 months after completion of such construction or making of such
      improvements, to provide funds for any such purpose;

     

    (viii)                      any
      Lien in favor of the Issuer or any Restricted Subsidiary;

     

    (ix)           any
      Lien created or assumed by the Issuer or any Restricted Subsidiary in connection
      with the issuance of Debt the interest on which is excludable from gross income
      of the holder of such Debt pursuant to the Internal Revenue Code of 1986, as
      amended, or any successor statute, for the purpose of financing, in whole or
      in
      part, the acquisition or construction of property or assets to be used by the
      Issuer or any Subsidiary;

     

    (x)           any
      Lien upon property or assets of any foreign Restricted Subsidiary to secure
      Debt
      of that foreign Restricted Subsidiary;

     

    (xi)           Permitted
      Liens;

     

    (xii)           any
      Lien created by any program providing for the financing, sale or other
      disposition of trade or other receivables classified as current assets in
      accordance with United States generally accepted accounting principles entered
      into by the Issuer or by a Subsidiary of the Issuer, provided that such
      program is on terms customary for similar transactions, or any document executed
      by any Subsidiary of the Issuer in connection therewith, provided that
      such Lien is limited to the trade or other receivables in respect of which
      such
      program is created or exists, and the proceeds thereof;

     

    (xiii)                      any
      Lien upon any additions, improvements, replacements, repairs, fixtures,
      appurtenances or component parts thereof attaching to or required to be attached
      to property or assets pursuant to the terms of any mortgage, pledge agreement,
      security agreement or other similar instrument, creating a Lien upon such
      property or assets permitted by clauses (i) through (xi), inclusive, above;
      or

     

    (xiv)                      any
      extension, renewal, refinancing, refunding or replacement (or successive
      extensions, renewals, refinancing, refundings or replacements) of any Lien,
      in
      whole or in part, that is referred to in clauses (i) through (vi), inclusive,
      above (and Liens related thereto referred to in clause (xii) above), or of
      any
      Debt secured thereby; provided, however, that the principal
      amount of Debt secured thereby shall not exceed the greater of the principal
      amount of Debt so secured at the time of such extension, renewal, refinancing,
      refunding or replacement and the original principal amount of Debt so secured
      (plus in each case the aggregate amount of premiums, other payments, costs
      and
      expenses paid or incurred in connection with such extension, renewal,
      refinancing, refunding or replacement); providedfurther,
however, that such extension, renewal, refinancing,
      refunding or
      replacement shall be limited to all or a part of the property (including
      improvements, alterations and repairs on such property) subject to the
      encumbrance so extended, renewed, refinanced, refunded or replaced (plus
      improvements, alterations and repairs on such property).

     

    Notwithstanding
      the foregoing, the Issuer may, and may permit any Restricted Subsidiary to,
      create, assume, incur, or suffer to exist any Lien upon any Principal Property
      to secure Debt of the Issuer or any other Person (other than the Senior Notes)
      that is not otherwise excepted by clauses (i) through (viii), inclusive, above
      without securing the Senior Notes, provided that the aggregate
      principal amount of all Debt then outstanding secured by such Lien and all
      similar Liens, together with all net sale proceeds from Sale-Leaseback
      Transactions (excluding Sale-Leaseback Transactions permitted by clauses (i)
      through (iv), inclusive, of Section 3.3(a) of this Fifth Supplemental
      Indenture) does not exceed the greater of 15% of Consolidated Net Tangible
      Assets or 15% of Total Capital.

     

    SECTION
      2.3                                Restriction
      on Sale-Leasebacks.

     

    (a)           The
      Issuer shall not, nor shall it permit any Restricted Subsidiary to, engage
      in a
      Sale-Leaseback Transaction, unless:

     

    (i)           the
      Sale-Leaseback Transaction occurs within 18 months from the date of acquisition
      of the Principal Property subject thereto or the date of the completion of
      construction or commencement of full operations on such Principal Property,
      whichever is later;

     

    (ii)           the
      Sale-Leaseback Transaction involves a lease for a period, including renewals,
      of
      not more than four years;

     

    (iii)           the
      Issuer or such Restricted Subsidiary would be entitled to incur Debt secured
      by
      a Lien on the Principal Property subject thereto (pursuant to clauses (i)
      through (xiii), inclusive, of the first paragraph of Section 3.2(a) of this
      Fifth

     

    (iv)           Supplemental
      Indenture) in a principal amount equal to or exceeding the net sale proceeds
      from the Sale-Leaseback Transaction without securing the Senior Notes;
      or

     

    (v)           the
      Issuer or such Restricted Subsidiary, within an 18-month period after such
      Sale-Leaseback Transaction, applies or causes to be applied an amount not less
      than the net sale proceeds from such Sale-Leaseback Transaction to (A) the
      repayment, redemption or retirement of Funded Debt of the Issuer or any
      Subsidiary of the Issuer, or (B) investment in another Principal Property or
      in
      a Subsidiary of the Issuer which owns another Principal Property.

     

    Notwithstanding
      the foregoing, the Issuer may, and may permit any Restricted Subsidiary to,
      effect any Sale-Leaseback Transaction that is not otherwise excepted by clauses
      (i) through (iv), inclusive, above, provided that the net sale proceeds
      from such Sale-Leaseback Transaction, together with the aggregate principal
      amount of outstanding Debt (other than the Senior Notes) secured by Liens upon
      any Principal Properties not excepted by clauses (i) through (xiii), inclusive,
      of Section 3.2(a) of this Fifth Supplemental Indenture, do not exceed the
      greater of 15% of Consolidated Net Tangible Assets or 15% of Total
      Capital.

     

    SECTION
      2.4                                Financial
      Information.

     

    Whether
      or not required by the SEC’s rules and regulations, so long as any Senior Notes
      are outstanding, the Issuer shall furnish to the Holders of the Senior Notes,
      within the time periods specified in the SEC’s rules and
      regulations:

     

    
      	
               

            	
              (1)

            	
              all
                quarterly and annual reports that would be required to be filed with
                the
                SEC on Forms 10-Q and 10-K if the Issuer was required to file such
                reports; and

            


    

     

    
      	
               

            	
              (2)

            	
              all
                current reports that would be required to be filed with the SEC on
                Form
                8-K if the Issuer was required to file such
                reports.

            


    

     

    The
      Issuer will prepare all such reports in all material respects in accordance
      with
      all applicable rules and regulations.  The Issuer will include in each
      annual report on Form 10-K a report on its consolidated financial statements
      by
      its certified independent public accountant. In addition, whether or not
      required by the SEC, the Issuer shall file a copy of each of the reports
      referred to in clauses (1) and (2) above with the SEC for public availability
      within the time periods specified in the SEC’s applicable rules and regulations
      (unless the SEC will not accept such a filing) and make that information
      available to securities analysts and prospective investors upon
      request.

     

    The
      Issuer is currently required under the Exchange Act to file reports with the
      SEC.  If the Issuer is no longer subject to the periodic reporting
      requirements of the Exchange Act for any reason, the Issuer will nevertheless
      continue filing the reports specified in the preceding paragraphs with the
      SEC
      within the time periods specified above unless the SEC will not accept such
      a
      filing.  The Issuer agrees not to take any action for the purpose of
      causing the SEC not to accept any such filings.  If, notwithstanding
      the foregoing, the SEC will not accept the Issuer’s filings for any reason, the
      Issuer will post the reports referred to in this Section 3.4

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    on
      the
      website www.panhandleenergy.com within the time periods that would apply if
      the
      Issuer was required to file those reports with the SEC.

     

    For
      so
      long as any Senior Notes remain outstanding, at any time the Issuer is not
      required to file the reports required by this Section 3.4 with the SEC, the
      Issuer shall furnish at the Issuer’s cost to the Holders and to securities
      analysts and prospective investors, upon their request, the information required
      to be delivered pursuant to Rule 144A(d)(4) under the Securities
      Act.

     

    SECTION
      2.5                                Applicability
      of Covenants.

     

    Unless
      otherwise stated herein, the foregoing covenants contained in this
      Article III shall only be in effect so long as any of the Senior Notes are
      outstanding.

     

    ARTICLE
      III

     

    DEFAULT

     

    SECTION
      3.1                                General.

     

    All
      of
      the events specified in paragraphs (1) through (6) in Section 6.01(a) of
      the Base Indenture shall be “Events of Default” with respect to the Senior
      Notes.

     

    SECTION
      3.2                                Additional
      Event of Default.

     

    The
      following event shall be an “Event of Default” with respect to the Senior Notes:
      as a result of any action taken by the Issuer or its direct or indirect equity
      holders, there is a change in the Issuer’s federal income tax status or a change
      in the deemed issuer of the indebtedness evidenced by the Senior Notes for
      federal income tax purposes, unless (i) Holders of more than 50% in
      principal amount of the Senior Notes consent to such change or
      (ii) (a) the Issuer certifies to the Trustee that it has received a
      ruling from the Internal Revenue Service or (b) the Issuer delivers to the
      Trustee an opinion of nationally recognized independent counsel reasonably
      acceptable in form and substance to the Trustee, in either case to the effect
      that the Holders of the Senior Notes will not recognize income, gain or loss
      for
      federal income tax purposes as a result of the change and that such Holders
      will
      be subject to federal income tax on the same amounts, in the same manner and
      at
      the same times as would have been the case if the change had not
      occurred.

     

    ARTICLE
      IV

     

    DEFEASANCE

     

    SECTION
      4.1                                General.

     

    All
      of
      the provisions of Article XI of the Base Indenture shall be applicable to the
      Senior Notes.

     

    SECTION
      4.2                                Covenant
      Defeasance.

     

    SECTION
      4.3                                With
      respect to and pursuant to the terms of Section 11.02(b) of the Base
      Indenture, the release of covenant obligations provided for therein shall,
      with
      respect to the Senior Notes, also apply to Section 3.1, Section 3.2,
      and Section 3.3 of this Fifth Supplemental Indenture.

     

    ARTICLE
      V

     

    FORM
      OF SENIOR NOTES

     

    SECTION
      5.1                                Form
      of Senior Notes.

     

    The
      Senior Notes, and the Trustee’s Certificate of Authentication to be endorsed
      thereon, are to be substantially in the following forms:

     

    [FORM
      OF
      FACE OF SENIOR NOTES DUE 2017]

     

    This
      Senior Note is a Global Note within the meaning of the Indenture hereinafter
      referred to and is registered in the name of the Depositary or a nominee of
      the
      Depositary.  This Senior Note is exchangeable for Senior Notes
      registered in the name of a person other than the Depositary or its nominee
      only
      in the limited circumstances described in the Indenture, and may not be
      transferred except as a whole by the Depositary to a nominee of the Depositary,
      by a nominee of the Depositary to the Depositary or another nominee of the
      Depositary or by the Depositary or any such nominee to a successor Depositary
      or
      a nominee of such a successor Depositary.

     

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company, a New York corporation (“DTC”), to the Issuer or its agent
      for registration of transfer, exchange or payment, and any certificate issued
      is
      registered in the name of Cede & Co. or such other name as is requested by
      an authorized representative of DTC (and any payment is made to Cede & Co.
      or to such other entity as is requested by an authorized representative of
      DTC),
      ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
      PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
      an interest herein.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    


     

    CUSIP
      No.  698455
      AA0                                                                                                                     $[          ]

     

    Panhandle
      Eastern Pipe Line Company, LP

     

    6.20%
      SENIOR NOTE DUE 2017

     

    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP, a Delaware limited partnership (the “Issuer”),
      for value received, hereby promises to pay to Cede & Co., or registered
      assigns, the principal sum of [AMOUNT IN WORDS] Dollars
      ($[       ]) on November 1, 2017 (“Maturity”)
      and to pay interest thereon from October 26, 2007 (the “Original Issue Date”) or
      from the most recent interest payment date (each such date, an “Interest Payment
      Date”) to which interest has been paid or duly provided for, semi-annually in
      arrears on May 1st and November
      1st
      in each year, commencing May 1, 2008, to the registered holders thereof on
      the
      preceding April 15 and October 15, respectively, and at Maturity at the rate
      of
      6.20% per annum, until the principal hereof shall have become due and payable,
      and on any overdue principal and premium, if any, and (without duplication
      and
      to the extent that payment of such interest is enforceable under applicable
      law)
      on any overdue installment of interest at the same rate per
      annum.  The amount of interest payable on any Interest Payment Date
      shall be computed on the basis of a 360-day year of twelve 30-day
      months.  In the event that any date on which interest is payable on
      this Senior Note is not a Business Day, then payment of interest payable on
      such
      date will be made on the next succeeding day which is a Business Day (and
      without any interest or other payment in respect of any such delay), except
      that, if such Business Day is in the next succeeding calendar year, such payment
      shall be made on the immediately preceding Business Day, in each case with
      the
      same force and effect as if made on such date. The interest installment so
      payable, and punctually paid or duly provided for, on any Interest Payment
      Date
      will, as provided in the Indenture, be paid to the person in whose name this
      Senior Note (or one or more Predecessor Securities, as defined in said
      Indenture) is registered at the close of business on the regular record date
      for
      such interest installment which shall be the close of business on the 1st day of
      the
      calendar month in which such Interest Payment Date occurs.  Any such
      interest installment not punctually paid or duly provided for shall forthwith
      cease to be payable to the registered holders on such regular record date,
      and
      may be paid to the person in whose name this Senior Note (or one or more
      Predecessor Securities) is registered at the close of business on a special
      record date to be fixed by the Trustee (as defined below) for the payment of
      such defaulted interest, notice whereof shall be given to the registered holders
      of this series of Senior Notes not less than 10 days prior to such special
      record date, or may be paid at any time in any other lawful manner not
      inconsistent with the requirements of any securities exchange on which the
      Senior Notes may be listed, and upon such notice as may be required by such
      exchange, all as more fully provided in the Indenture.  The principal
      of (and premium, if any) and the interest on this Senior Note shall be payable
      at the office or agency of the Trustee maintained for that purpose in any coin
      or currency of the United States of America which at the time of payment is
      legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of
      the
      Issuer by check mailed to the registered holder at such address as shall appear
      in the Security Register.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    This
      Senior Note shall not be entitled to any benefit under the Indenture hereinafter
      referred to, be valid or become obligatory for any purpose until the Certificate
      of Authentication hereon shall have been signed by or on behalf of the
      Trustee.

     

    The
      provisions of this Senior Note are continued on the reverse side hereof and
      such
      continued provisions shall for all purposes have the same effect as though
      fully
      set forth at this place.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be
      executed.

     

    Dated
      [     ]

     

    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP

     

    


     

    


     

    By         _______________                                             

    Name:   _______________                                                   

    Title:     _______________                                                 

    


     

    Attest:

     

    By:       ____________                                               

    Name:  ____________                                                    

    Title:    ____________                                                  

    


     

    


     

    


     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    [FORM
      CERTIFICATE OF AUTHENTICATION]

     

    CERTIFICATE
      OF AUTHENTICATION

     

    This
      is
      one of the Senior Notes of the series of Senior Notes described in the
      within-mentioned Indenture.

     

    THE
      BANK
      OF NEW YORK TRUST COMPANY, N.A., as Trustee

     

    


     

    


     

    By______________________

    [Authorized
      Signatory]

     

    [FORM
      OF
      REVERSE OF SENIOR NOTE]

     

    REVERSE
      OF SENIOR NOTE

     

    This
      Senior Note is one of a duly authorized series of Securities of the Issuer
      (herein sometimes referred to as the “Senior Notes”), specified in the
      Indenture, issued or to be issued in one or more series under and pursuant
      to an
      indenture (the “Base Indenture”) dated as of March 29, 1999 among the Issuer,
      CMS Panhandle Holding Company, a Michigan corporation (which has merged into
      the
      Issuer), and NBD Bank, as trustee (predecessor to The Bank of New York Trust
      Company, N.A.), further supplemented by the Fifth Supplemental Indenture dated
      as of October 26, 2007 between the Issuer and The Bank of New York Trust
      Company, N.A., as trustee (the “Trustee”) (the Base Indenture as so
      supplemented, hereinafter being referred to as the “Indenture”), to which
      Indenture and all indentures supplemental thereto reference is hereby made
      for a
      description of the rights, limitations of rights, obligations, duties and
      immunities thereunder of the Trustee, the Issuer and the holders of the Senior
      Notes.  By the terms of the Indenture, the Senior Notes are issuable
      in series which may vary as to amount, date of maturity, rate of interest and
      in
      other respects as in the Indenture provided.  This series of Senior
      Notes is not limited in aggregate principal amount, as specified in said Fifth
      Supplemental Indenture.

     

    The
      Senior Notes are redeemable at the option of the Issuer at any time and from
      time to time, in whole or in part, upon not less than 30 days nor more than
      60
      days notice to each holder of such Senior Notes, at a redemption price equal
      to
      the greater of (i) 100% of the principal amount of such Senior Notes to be
      redeemed and (ii) the sum of the present values of the remaining scheduled
      payments of principal and interest thereon (exclusive of interest accrued to
      the
      date of redemption) discounted to the redemption date on a semiannual basis
      (assuming a 360-day year consisting of twelve 30-day months) at the Treasury
      Rate plus 30 basis points, plus, in either case, accrued and unpaid interest
      thereon to the date of redemption.  Unless there is a default in the
      payment of the redemption price, on and after the applicable redemption date,
      interest will cease to accrue on the Senior Notes or portions thereof called
      for
      redemption.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    “Comparable
      Treasury Issue” means the United States Treasury security or securities selected
      by an Independent Investment Banker as having an actual or interpolated maturity
      comparable to the remaining term of the Senior Notes to be redeemed that would
      be utilized, at the time of selection and in accordance with customary financial
      practice, in pricing new issues of corporate debt securities of a comparable
      maturity to the remaining term of such Senior Notes.

     

    “Comparable
      Treasury Price” means, with respect to any redemption date, (A) the average of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (B) if the Trustee obtains fewer than four such Reference Treasury Dealer
      Quotations, the average of all such quotations.

     

    “Independent
      Investment Banker” means any of Banc of America Securities LLC, J.P. Morgan
      Securities Inc. and Wachovia Capital Markets, LLC (and their respective
      successors) or, if no such firm is willing and able to select the applicable
      Comparable Treasury Issue or perform the other functions of the Independent
      Investment Banker provided in the Indenture, an independent investment banking
      institution of national standing appointed by us and reasonably acceptable
      to
      the Trustee.

     

    “Reference
      Treasury Dealer” means each of Banc of America Securities LLC, J.P. Morgan
      Securities Inc., and Wachovia Capital Markets, LLC (in each case, or its
      affiliates and its successors); if any of the Reference Treasury Dealers resign,
      the respective successor dealer shall be (1) a primary U.S. Government
      Securities dealer in the City of New York (a “Primary Treasury Dealer”), and (2)
      any other Primary Treasury Dealer selected by the Company.

     

    “Reference
      Treasury Dealer Quotations”  means, with respect to each Reference
      Treasury Dealer and any redemption date, the average, as determined by the
      Trustee, of the bid and asked prices for the Comparable Treasury Issue
      (expressed in each case as a percentage of its principal amount) quoted in
      writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New
      York time on the third Business Day preceding such redemption date.

     

    “Treasury
      Rate” means, with respect to any redemption date, the rate per annum equal to
      the semiannual equivalent yield to maturity or interpolated (on a day count
      basis) of the Comparable Treasury Issue, assuming a price for the Comparable
      Treasury Issue (expressed as a percentage of its principal amount) equal to
      the
      Comparable Treasury Price for such redemption date.

     

    The
      Issuer may purchase the Senior Notes in the open market, by tender or
      otherwise.  Senior Notes so purchased may be held, resold or
      surrendered to the Trustee for cancellation.  If applicable, the
      Issuer will comply with the requirements of Rule 14e-1 under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), and other securities laws
      and regulations in connection with any such purchase.

     

    No
      sinking fund is provided for the Senior Notes.

     

    If
      an
      Event of Default with respect to this Senior Note shall occur and be continuing,
      the principal of this Senior Note may be declared due and payable in the manner
      and with the effect provided in the Indenture.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    The
      Indenture contains provisions for defeasance at any time of (i) the entire
      indebtedness of this Senior Note or (ii) certain restrictive covenants and
      certain other obligations with respect to this Senior Note, in each case upon
      compliance with certain conditions set forth therein.

     

    The
      Indenture permits, with certain exceptions as therein provided, modifications
      and amendments of the Indenture by the Issuer and the Trustee with the consent
      of the holders of a majority in aggregate principal amount of the outstanding
      Senior Notes.

     

    The
      Indenture provides that the holders of a majority in aggregate principal amount
      of the outstanding Senior Notes may, on behalf of the holders of all Senior
      Notes, modify or eliminate restrictive covenants, which right includes the
      right
      to waive insofar as the Senior Notes are concerned, compliance by the Issuer
      with certain restrictive provisions of the Indenture.

     

    The
      Indenture provides that the holders of a majority in aggregate principal amount
      of the outstanding Senior Notes may, on behalf of all holders of Senior Notes,
      waive any past default under the Indenture with respect to any Senior Notes,
      except a default (i) in the payment of principal of, or premium, if any, or
      any
      interest on any Senior Note; or (ii) in respect of a covenant or provision
      of
      the Indenture which cannot be modified or amended without the consent of the
      holder of each outstanding Senior Note affected.

     

    The
      Indenture provides that, subject to the duty of the Trustee during default
      to
      act with the required standard of care, the Trustee will be under no obligation
      to exercise any of its rights or powers under the Indenture at the request
      or
      direction of any of the holders, unless such holders shall have offered to
      the
      Trustee reasonable indemnity.  Subject to such provisions for the
      indemnification of the Trustee, the holders of a majority in aggregate principal
      amount of the outstanding Senior Notes have the right to direct the time, method
      and place of conducting any proceeding for any remedy available to the Trustee,
      or exercising any trust or power conferred on the Trustee, with respect to
      the
      Senior Notes; provided, however, that the Trustee shall not be
      obligated to take any action unduly prejudicial to holders not joining in such
      direction or involving the Trustee in personal liability.

     

    No
      reference herein to the Indenture and no provision of this Senior Note or of
      the
      Indenture shall alter or impair the obligation of the Issuer, which is absolute
      and unconditional, to pay the principal of and any premium and interest on
      this
      Senior Note at the times, place and rate, and in the coin or currency, herein
      prescribed.

     

    As
      provided in the Indenture and subject to certain limitations therein and herein
      set forth, the transfer of this Senior Note is registrable in the Security
      Register, upon surrender of this Senior Note for registration of transfer at
      the
      office or agency of the Issuer in any place where the principal of and any
      premium and interest on this Senior Note are payable, duly endorsed by, or
      accompanied by a written instrument of transfer in form satisfactory to the
      Issuer and the Security Registrar duly executed by, the holder hereof or his
      attorney duly authorized in writing, and thereupon one or more new Senior Notes
      of this series and of like tenor, of authorized denominations and for the same
      aggregate principal amount, will be issued to the designated transferee or
      transferees.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        19

        
          

        

      

      
        
        

      

    


    The
      Senior Notes are issuable only in registered form without coupons in
      denominations of $1,000 and any integral multiple thereof.  As
      provided in the Indenture and subject to certain limitations therein set forth,
      Senior Notes are exchangeable for a like aggregate principal amount of Senior
      Notes and of like tenor of a different authorized denomination, as requested
      by
      the holder surrendering the same.

     

    No
      service charge shall be made for any such registration of transfer or exchange,
      but the Issuer may require payment of a sum sufficient to cover any tax or
      other
      governmental charge payable in connection therewith.

     

    The
      Issuer shall not be required to (a) issue, exchange or register the transfer
      of
      this Senior Note for a period of 15 days next preceding the mailing of the
      notice of redemption of Senior Notes or (b) exchange or register the transfer
      of
      any Senior Note or any portion thereof selected, called or being called for
      redemption, except in the case of any Senior Note to be redeemed in part, the
      portion thereof not so to be redeemed.

     

    Prior
      to
      due presentment of this Senior Note for registration of transfer, the Issuer,
      the Trustee and any agent of the Issuer or the Trustee may treat the Person
      in
      whose name this Senior Note is registered as the owner hereof for all purposes,
      whether or not this Senior Note be overdue, and neither the Issuer, the Trustee
      nor any such agent shall be affected by notice to the contrary.

     

    No
      recourse shall be had for the payment of the principal of or the interest on
      this Senior Note, or for any claim based hereon, or otherwise in respect hereof,
      or based on or in respect of the Indenture, against any incorporator,
      stockholder, officer or director, past, present or future, as such, of the
      Issuer or of any predecessor or successor corporation, whether by virtue of
      any
      constitution, statute or rule of law, or by the enforcement of any assessment
      or
      penalty or otherwise, all such liability being, by the acceptance hereof and
      as
      part of the consideration for the issuance hereof, expressly waived and
      released.

     

    All
      terms
      used in this Senior Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    CERTIFICATE
      OF TRANSFER

     

    FOR
      VALUE
      RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S) UNTO
      ____________________

    ______________________

    ______________________
______________________

     

    


     

    


     

    (Please
      print or typewrite name and address including postal zip code, of
      assignee)

    _______________________

    


     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        20

        
          

        

      

      
        
        

      

    


    (PLEASE
      INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF
      ASSIGNEE)

     

                 
      ____________________________


     

    the
      within Senior Note and all rights thereunder, and hereby irrevocably constitutes
      and appoints

     

    __________________


     

    __________________


     

    to
      transfer said Senior Note on the books of the Issuer, with full power of
      substitution in the premises.

     

    Dated:___________________                                                                                                ______________________]

                                
      [Name of Assignor]

     

    ARTICLE
      VI

     

    ISSUANCE
      OF SENIOR NOTES

     

    SECTION
      6.1                                Original
      Issue of Senior Notes.

     

    Upon
      execution of this Fifth Supplemental Indenture, the Senior Notes in the initial
      principal amount of $300,000,000 may be executed by the Issuer.  Such
      Senior Notes may be delivered to the Trustee for authentication, and the Trustee
      shall thereupon authenticate and deliver said Senior Notes to or upon the
      written order of the Issuer, signed by its Chairman, President or any Vice
      President and its Secretary or an Assistant Secretary, without any further
      action by the Issuer.

     

    SECTION
      6.2                                Additional
      Senior Notes.

     

    Upon
      execution of this Fifth Supplemental Indenture, subject to Section 2.1
      hereof, Additional Senior Notes may be executed by the Issuer.  Such
      Additional Senior Notes may be delivered to the Trustee for authentication,
      and
      the Trustee shall thereupon authenticate and deliver said Additional Senior
      Notes to or upon the written order of the Issuer, signed by its Chairman,
      President or any Vice President and its Secretary or an Assistant Secretary,
      without any further action by the Issuer.

     

    ARTICLE
      VII

     

    MISCELLANEOUS

     

    SECTION
      7.1                                Consent,
      Amendment and Waiver.

     

    For
      purposes of Article VI and Article IX of the Base Indenture, it is understood
      that the covenants and Events of Default included in this Fifth Supplemental
      Indenture have been included solely for the benefit of the holders of the Senior
      Notes and therefore any consent, amendment or waiver thereof shall require
      the
      consent of a majority in aggregate principal

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        21

        
          

        

      

      
        
        

      

    


    amount
      of
      the outstanding Senior Notes voting as a separate class or the consent of the
      holders of each outstanding Senior Note, as the case may be.

     

    SECTION
      7.2                                Ratification
      of Indenture.

     

    The
      Base
      Indenture, as supplemented by this Fifth Supplemental Indenture, is in all
      respects ratified and confirmed, and this Fifth Supplemental Indenture shall
      be
      deemed part of the Indenture in the manner and to the extent herein and therein
      provided.  The provisions of this Fifth Supplemental Indenture shall
      supersede the provisions of the Indenture to the extent the Indenture is
      inconsistent herewith.

     

    SECTION
      7.3                                Trustee
      Not Responsible for Recitals.

     

    The
      recitals herein contained are made by the Issuer and not by the Trustee, and
      the
      Trustee assumes no responsibility for the correctness thereof. The Trustee
      makes
      no representation as to the validity or sufficiency of this Fifth Supplemental
      Indenture.

     

    SECTION
      7.4                                Governing
      Law.

     

    This
      Fifth Supplemental Indenture and each Senior Note shall be deemed to be a
      contract made under the internal laws of the State of New York, and for all
      purposes shall be construed in accordance with the laws of said
      State.

     

    SECTION
      7.5                                Separability.

     

    In
      case
      any one or more of the provisions contained in this Fifth Supplemental Indenture
      or in the Senior Notes shall for any reason be held to be invalid, illegal
      or
      unenforceable in any respect, such invalidity, illegality or unenforceability
      shall not affect any other provisions of this Fifth Supplemental Indenture
      or of
      the Senior Notes, but this Fifth Supplemental Indenture and the Senior Notes
      shall be construed as if such invalid or illegal or unenforceable provision
      had
      never been contained herein or therein.

     

    SECTION
      7.6                                Counterparts.

     

    This
      Fifth Supplemental Indenture may be executed in any number of counterparts
      each
      of which shall be an original; but such counterparts shall together constitute
      but one and the same instrument.

     


    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3      
    

        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental
      Indenture to be duly executed as of the day and year first above
      written.

     

    


    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP,

    as
      Issuer

    


    By:           /s/
      Richard N.
      Marshall                                                      

    Name:                                                                Richard
      N. Marshall

    Title:Senior
      Vice President and

    Chief
      Financial Officer

    


    


    


    THE
      BANK
      OF NEW YORK TRUST COMPANY,

    as
      Trustee

    


    


    By:           /s/
      Julie
      Hoffman-Ramos                                                     

    Name: Julie
      Hoffman-Ramos

    Title: Assistant
      Treasurer

    


    


    



    
      
              

                            
                          
      

                  AUSTIN-#371758-v3-PANHANDLE_-_Fifth_Supplemental_Indenture_to_Panhandle_Indenture.DOC
            i      
      

                   AUSTIN:
            0060018.00004:
            371758v3