Document:

EXHIBIT 4.4

 

 

SOUTHERN UNION COMPANY

 

AND

 

JPMORGAN
CHASE BANK, N.A.

 

as
Trustee

 

 

 

SUPPLEMENTAL INDENTURE NO. 2

 

Dated
as of February 11, 2005

 

 

 

THIS SUPPLEMENTAL INDENTURE No. 2 (this “Supplemental
Indenture”), dated as of February 11, 2005, is between SOUTHERN
UNION COMPANY, a Delaware corporation (the “Company”),
and JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), as
Trustee (the “Trustee”).

 

R E C I T A L
S

 

WHEREAS, the
Company has heretofore executed and delivered to the Trustee an Indenture,
dated as of January 31, 1994 (the “Base  Indenture” and, as further supplemented by
this Supplemental Indenture, the “Indenture”),
providing for the issuance from time to time of series of the Company’s
Securities (as defined in the Base Indenture);

 

WHEREAS, Section 901(7) of the Base Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Base Indenture to establish the form or terms of Securities of any series as permitted by Sections 201 or 301 of the Base Indenture;
 
WHEREAS, pursuant to Section 301 of the Base Indenture, the Company wishes to provide for the issuance of a new series of Securities to be known as its 4.375% Senior Notes initially due February 16, 2010 (the “Senior Notes”), the form and terms of such Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in this Supplemental Indenture;
 

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

 

NOW,
THEREFORE, in consideration of the covenants and agreements set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1

Definitions

 

Section 1.01.  Relation to Base Indenture.   This Supplemental Indenture constitutes
an integral part of the Base Indenture.

 

Section 1.02.  Definition of Terms.  For all purposes of this
Supplemental Indenture:

 

1

 

(a)       Capitalized terms used herein without
definition shall have the meanings specified in the Base Indenture, or, if not
defined in the Base Indenture, in the Purchase Contract and Pledge Agreement or
the Remarketing Agreement;

 

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

 

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

 

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

 

(e)       the following terms have the meanings
given to them in this Article 1:

 

“Applicable Principal
Amount” means the aggregate principal amount of the
Senior Notes that are components of Corporate Units.

 

“Business Day” means any day other than a Saturday or Sunday
or any other day on which banking institutions and trust companies in New York
City, New York are permitted or required by applicable law to remain closed or
a day on which the Indenture Trustee or the Collateral Agent is closed for
business.

 

“Contract Settlement Price” shall have the meaning set forth
in Section 7.01(c)(iv)(B).

 

“Corporate Units” shall have the meaning specified in the
Purchase Contract and Pledge Agreement.

 

“Depositary” means a clearing agency
registered under Section 17A of the Securities Exchange Act of 1934, as
amended, that is designated to act as Depositary for the Corporate Units pursuant
to the Purchase Contract and Pledge Agreement.

 

“Depositary Participant” means a broker,
dealer, bank, other financial institution or other Person for whom from time to
time the Depositary effects book entry transfers and pledges of securities
deposited with the Depositary.

 

“Failed Remarketing” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Global
Senior Notes” shall have the meaning set forth in Section 2.04.

 

“Interest
Payment Dates” shall have the meaning set forth in Section 2.05(b).

 

“Interest
Rate” shall have the meaning set forth in Section 2.05(a).

 

“Minimum Price”
shall have the meaning set forth in Section 7.01(h).

 

2

 

“Purchase
Contract and Pledge Agreement” means the Purchase Contract and
Pledge Agreement, dated as of February 11, 2005, between the Company and
JPMorgan Chase Bank, N.A., as Purchase Contract Agent, collateral agent,
custodial agent and securities intermediary, as amended from time to time.

 

“Purchase Contracts”
and “Purchase Contract” shall have their
respective meanings specified in the Purchase Contract and Pledge Agreement.

 

“Purchase
Contract Settlement Date” means February 16, 2008.

 

“Put Price”
shall have the meaning set forth in Section 7.04(a).

 

“Put Right”
shall have the meaning set forth in Section 7.04(a).

 

“Quarterly Interest Payment Date” shall have
the meaning set forth in Section 2.05(b).

 

“Quotation Agent”
means any primary U.S. government securities dealer selected by
the Company.

 

“Record
Date” means, with respect to any Interest Payment Date for the
Senior Notes, the first Business Day of the calendar month in which such
Interest Payment Date falls;  provided that the Company may, at
its option, select any other day as the Record Date for any Interest Payment
Date so long as (i) such Record Date selected is more than one Business Day but
less than sixty Business Days prior to such Interest Payment Date and (ii) at
least ten Business Days prior to the new Record Date for such Interest Payment
Date, the Company notifies the Purchase Contract Agent in writing of the new
Record Date and instructs the Purchase Contract Agent to notify the Holders of
such Record Date.

 

“Redemption
Amount” shall mean, for each Senior Note, an amount equal to the
product of the principal amount of that Senior Note and a fraction, the
numerator of which is the Tax Event Treasury Portfolio Purchase Price and the
denominator of which is the Applicable Principal Amount.

 

“Redemption
Price” shall mean, for each Senior Note, the Redemption Amount plus
any accrued and unpaid interest on such Senior Note to but excluding the Tax
Event Redemption Date.

 

“Remarketed Senior Notes”
shall have the meaning set forth in Section 7.01(i).

 

“Remarketing
Agent” shall mean the Remarketing Agent designated by the Company
under the Remarketing Agreement.

 

“Remarketing
Agreement” means the Remarketing Agreement to be entered into among
the Company, the Remarketing Agent, and JPMorgan Chase Bank, N.A., as Purchase
Contract Agent, as amended from time to time.

 

3

 

“Remarketing Announcement”
shall have the meaning set forth in Section 7.01(c).

 

“Remarketing Announcement Date” means the sixth Business Day
immediately preceding the first Remarketing Date of any Three-Day Remarketing
Period during the Period for Early Remarketing, and for the Final Three-Day
Remarketing Period, the third Business Day immediately preceding the first
Remarketing Date of the Final Three-Day Remarketing Period.

 

“Remarketing Price”
shall have the meaning set forth in Section 7.01(c)(iv)(A).

 

“Remarketing Treasury Portfolio” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Remarketing Treasury Portfolio Purchase Price” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Reset Date”
means, (i) in connection with a Successful Remarketing of the Senior Notes
during the Period for Early Remarketing, the third Business Day immediately
following the Remarketing Date on which the Senior Notes are successfully
remarketed and, (ii) in connection with a Successful Remarketing of the Senior
Notes on any of the Remarketing Dates during the Final Three-Day Remarketing
Period, February 16, 2008.

 

“Reset Rate”
means the interest rate per annum, calculated in accordance with Section
7.02(a) below, on the Senior Notes to be in effect on and after the Reset Date.

 

“Separate Senior Notes” means Senior Notes
that are no longer a component of Corporate Units.

 

“Separate Senior Notes Purchase Price” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Stated
Maturity” shall have the meaning specified in Section 2.02.

 

“Subsequent Interest
Payment Date” means, following the Reset Date, each semi-annual
interest payment date established by the Company on the Remarketing Date on
which the Senior Notes are successfully remarketed.

 

“Successful Remarketing” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Successful Remarketing
Date” means the Remarketing Date on which the Senior Notes are
successfully remarketed in accordance with the provisions of the Remarketing
Agreement.

 

“Tax Event” means the receipt by the Company of an opinion of
counsel, rendered by a law firm having a recognized national law practice, to
the effect that, as a result of any

 

4

 

amendment to, change in or announced proposed change in the laws (or
any regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative decision, pronouncement, judicial decision or action
interpreting or applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision is
announced on or after the date hereof, there is more than an insubstantial
increase in the risk that interest payable by the Company on the Senior Notes
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Company, in whole or in part, for United States federal income tax
purposes.

 

“Tax Event Redemption” means the redemption
of the Senior Notes pursuant to the terms hereof following the occurrence of a
Tax Event.

 

“Tax Event Redemption Date” shall have the meaning set forth
in Section 3.01.

 

“Tax Event Treasury Portfolio” shall have the meaning
specified in the Purchase Contract and Pledge Agreement.

 

“Tax Event Treasury Portfolio Purchase Price” shall have the
meaning specified in the Purchase Contract and Pledge Agreement.

 

The terms “Company,”
“Trustee,” “Indenture,” “Base Indenture” and “Senior Notes” shall have the respective
meanings set forth in the recitals to this Supplemental Indenture and the
paragraph preceding such recitals.

 

ARTICLE 2

General Terms And Conditions Of The
Senior Notes

 

Section 2.01.  Designation and Principal Amount.  There is hereby authorized a
series of Securities designated as 4.375% Senior Notes initially due February
16, 2010 limited in aggregate principal amount to $100,000,000.  The Senior Notes may be issued from time to
time upon written order of the Company for the authentication and delivery of
Senior Notes pursuant to Section 303 of the Base Indenture.

 

Section 2.02.  Maturity. 
Unless a Tax Event Redemption has occurred, the Senior Notes
will mature and the principal amount thereof shall be due and payable together
with all accrued and unpaid interest thereon, on the Stated Maturity.  The “Stated Maturity”
shall mean February 16, 2010 or such later date falling on or prior to the
tenth anniversary of the Reset Date determined by the Company on the Successful
Remarketing Date (subject to agreement between the Company and the Remarketing
Agent pursuant to Section 4(a) of the Remarketing Agreement with respect to the
Remarketing Fee), it being understood that if there shall have been a Failed
Remarketing, the Stated Maturity shall remain February 16, 2010.  Any extension of the Stated Maturity in accordance
with this Section 2.02 shall be effective on and after the Reset Date.

 

5

 

Section 2.03.  Form, Payment and Appointment.  Except as provided in Section
2.04, the Senior Notes shall be issued in fully registered, certificated form,
bearing identical terms. Principal of and interest on the Senior Notes will be
payable, the transfer of such Senior Notes will be registrable, and such Senior
Notes will be exchangeable for Senior Notes of a like aggregate principal
amount in denominations of $1,000 (unless Senior Notes have previously been
issued in denominations of $50 and integral multiples thereof, in which case
Senior Notes will be exchangeable for a like aggregate principal amount in
denominations of $50 and integral multiples of $50) and integral multiples of
$1,000 bearing identical terms and provisions, at the office or agency of the
Company maintained for such purpose in the Borough of Manhattan, The City of
New York, which shall initially be the Corporate Trust Office of the Trustee; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the Holder at such address as
shall appear in the Security Register or by wire transfer to an account
appropriately designated by the Holder entitled to payment.

 

No service
charge shall be made for any registration of transfer or exchange of the Senior
Notes, but the Company may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

 

The Security Registrar and Paying Agent for
the Senior Notes shall initially be the Trustee.

 

The Senior Notes shall be issuable in
denominations of $1,000 and integral multiples of $1,000 in excess thereof; provided, however, that upon the release by the Collateral
Agent of the Pledged Senior Notes (other than any release of Pledged Senior
Notes in connection with (i) the creation of Treasury Units by Collateral
Substitution, (ii) a Successful Remarketing, (iii) Cash Merger Early Settlement
or (iv) Early Settlement in accordance with Sections 3.13, 5.02, 5.04(b) and
5.07 of the Purchase Contract and Pledge Agreement, respectively), the Senior
Notes shall be issuable in denominations of $50 and integral multiples of $50.  Each Applicable Ownership Interest in a Senior Note held as a component
of a Corporate Unit represents an undivided ownership interest of 1/20, or 5%,
of $1,000 principal amount of Senior Notes.

 

Section 2.04.  Global Senior Notes.   Senior Notes that are no longer a component of
the Corporate Units and released from the Collateral Account (as defined in the
Purchase Contract and Pledge Agreement) will be issued in permanent global form
(a “Global Senior Note”), and if
issued as one or more Global Senior Notes, the Depositary shall be The
Depository Trust Company or such other depositary as any officer of the Company
may from time to time designate.  Upon
the creation of Treasury Units or the recreation of Corporate Units, an
appropriate annotation shall be made on the Schedule of Increases and Decreases
on the Global Senior Notes held by the Depositary.  Unless and until such Global Senior Note is
exchanged for Senior Notes in certificated form, Global Senior Notes may be
transferred, in whole but not in part, and any payments on the Senior Notes
shall be made, only to the Depositary or a nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of
such successor Depositary.

 

6

 

Section 2.05.  Interest.  (a) The Senior Notes will bear
interest initially at the rate of 4.375% per year (the “Interest Rate”) from the date of original
issuance to, but excluding, the earlier of (i) the Stated Maturity and (ii) any
Reset Date.  In the event of a Successful
Remarketing of the Senior Notes, the Interest Rate will be reset by the
Remarketing Agent at the appropriate Reset Rate with effect from the related
Reset Date, as set forth under Section 7.02. 
If the Interest Rate is so reset, the Senior Notes will bear interest at
the Reset Rate from the related Reset Date until the principal thereof and
interest thereon is paid or duly made available for payment and shall bear
interest, to the extent permitted by law, compounded semi-annually, on any overdue
principal and payment of interest at the Interest Rate through and including
the day immediately preceding the Reset Date and at the Reset Rate thereafter.

 

(b)           Interest on the Senior Notes shall
be payable initially quarterly in arrears on February 16, May 16, August 16 and
November 16 of each year (each, a “Quarterly Interest Payment Date”),
commencing May 16, 2005, to the Person in whose name such Senior Note, or any
predecessor Senior Note, is registered at the close of business on the Record
Date for such Interest Payment Date. 
Following a Successful Remarketing of the Senior Notes, interest on the
Senior Notes shall be payable semi-annually in arrears on the Subsequent
Interest Payment Dates (together with Quarterly Interest Payment Dates, the “Interest Payment Dates”). 
Interest payments will include interest accrued from and including the
immediately preceding Interest Payment Date or, in the case of the first
Interest Payment Date, from and including February 11, 2005, to but excluding
such Interest Payment Date.  If the Reset
Date is not a Quarterly Interest Payment Date, (i) interest paid on the Reset
Date to the Collateral Agent will be paid by the Collateral Agent to Holders of
Corporate Units subject to the provisions of the Purchase Contract and Pledge
Agreement on the Payment Date for the Corporate Units next following the Reset
Date and (ii) interest on the Senior Notes will accrue from, and including, the
Reset Date at the Reset Rate and be payable on the Subsequent Interest Payment
Dates.

 

(c)           The amount of interest payable for any full quarterly
period, or, following a Successful Remarketing, for any full semi-annual
period, will be computed on the basis of a 360-day year consisting of twelve
30-day months.  The amount of interest
payable for any period shorter than a full quarterly or semi-annual period, as
the case may be, for which interest is computed will be computed on the basis
of a 30-day month and, for any period less than a month, on the basis of the
actual number of days elapsed per 30-day month. 
In the event that any scheduled Interest Payment Date falls on a day
that is not a Business Day, then payment of interest payable on such Interest
Payment 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 calendar year, then such
payment will be made on the preceding Business Day, in each case, with the same
force and effect as if made on such scheduled Interest Payment Date.

 

Section 2.06.  No Defeasance.  The provisions of Article 14 of
the Base Indenture shall not apply to the Senior Notes.

 

7

 

Section 2.07.  No Sinking Fund.  The Senior Notes are not entitled
to the benefit of any sinking fund.

 

Section 2.08.  Voting Rights.  The provisions of Section 1505(c)
of the Base Indenture shall not apply to the Senior Notes.

 

ARTICLE 3

Redemption of The Senior Notes

 

Section 3.01.  Tax Event Redemption.  If a Tax Event shall occur and be
continuing, the Company may, at its option, redeem the Senior Notes in whole,
but not in part, on any Interest Payment Date prior to the earlier of the
Successful Remarketing Date or the Purchase Contract Settlement Date, at a
price per Senior Note equal to the Redemption Price, payable on the date of
redemption (the “Tax Event Redemption Date”)
in accordance with the redemption procedures set forth in Section 3.02
below.  Notice of any Tax Event
Redemption will be mailed by the Company (with a copy to the Trustee) at least
30 days but not more than 60 days before the Tax Event Redemption Date to each
registered Holder of the Senior Notes at its registered address.  In addition, the Company shall notify the
Collateral Agent in writing that a Tax Event has occurred and that the Company
intends to redeem the Senior Notes on the Tax Event Redemption Date.  Unless the Company defaults in the payment of
the Redemption Price, on and after the Tax Event Redemption Date, (a) interest
shall cease to accrue on the Senior Notes, (b) the Senior Notes shall become
due and payable at the Redemption Price, and (c) the Senior Notes shall be void
and all rights of the Holders in respect of the Senior Notes shall terminate
and lapse (other than the right to receive the Redemption Price upon surrender
of such Senior Notes but without interest on such Redemption Price).   Following the notice of a Tax Event
Redemption, neither the Company nor the Trustee shall be required to register
the transfer of or exchange the Senior Notes to be redeemed.

 

Section 3.02.  Redemption Procedures.   On or prior to the Tax Event
Redemption Date, the Company shall deposit with the Trustee immediately
available funds in an amount sufficient to pay, on the Tax Event Redemption
Date, the aggregate Redemption Price for all outstanding Senior Notes.  In exchange for any Senior Notes surrendered
for redemption on or after the Tax Event Redemption Date, the Trustee shall pay
an amount equal to the Redemption Price (a) to the Collateral Agent, in the
case of Senior Notes that are included in Corporate Units, which amount shall
be applied by the Collateral Agent in accordance with the terms of the Purchase
Contract and Pledge Agreement, and (b) to the holders of the Separate Senior
Notes, in the case of Separate Senior Notes.

 

8

 

ARTICLE 4

Form Of Senior Note

 

Section 4.01.  Form Of Senior Note.  The Senior Notes and the Trustee’s
Certificate of Authentication to be endorsed thereon are to be substantially in
the forms attached as Exhibit A hereto, with such changes therein as the
officers of the Company executing the Senior Notes (by manual or facsimile
signature) may approve, such approval to be conclusively evidenced by their execution
thereof.

 

ARTICLE 5

Original Issue Of Senior Notes

 

Section 5.01.  Original Issue Of Senior Notes.  Senior Notes in the aggregate
principal amount of $100,000,000 may from time to time, upon execution of this
Supplemental Indenture, be executed by the Company and 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 Company pursuant to
Section 303 of the Base Indenture without any further action by the Company
(other than as required by the Base Indenture).

 

ARTICLE 6

Original Issue Discount

 

Section 6.01.  Original Issue Discount.  The Company shall file with the
Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Senior Notes that are outstanding as of the end of
the year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.

 

ARTICLE 7

Remarketing

 

Section 7.01.  Remarketing Procedures.  (a)  Pursuant to the Remarketing Agreement and as
described below, the Company (i) during the Period for Early Remarketing may,
at its option, and in its sole discretion, select one or more Three-Day
Remarketing Periods consisting of three successive Remarketing Dates on each of
which it shall cause the Remarketing Agent to remarket, in whole (but not in
part), unless the Senior Notes have previously been successfully remarketed in
accordance with the provisions of the Remarketing Agreement or a Tax Event
Redemption shall have occurred or will occur on or prior to the last possible
Reset Date related to the applicable Three-Day Remarketing Period, (A) the
Pledged Senior Notes of Corporate

 

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Units holders included in the
Corporate Units, and (B) any Separate Senior Notes of Holders who have elected
in the manner set forth in the Purchase Contract and Pledge Agreement and the
Remarketing Agreement to have their Senior Notes so remarketed, for settlement
on the third Business Day following the Remarketing Date on which a Successful
Remarketing occurs, and (ii) shall, unless the Senior Notes have previously
been successfully remarketed in accordance with the provisions of the
Remarketing Agreement or a Tax Event Redemption Date shall have occurred or
will occur on or prior to the Purchase Contract Settlement Date, cause the
Remarketing Agent to remarket, in whole (but not in part), on each Remarketing
Date during the Final Three-Day Remarketing Period, (A) the Pledged Senior
Notes of Corporate Unit holders who have not already settled the Purchase
Contracts included in their Corporate Units and who have failed to notify the
Purchase Contract Agent, on or prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, of their intention to settle
such Purchase Contracts in cash, and (B) any Separate Senior Notes of Holders
who have elected in the manner set forth herein to have their Senior Notes so
remarketed, for settlement on the Purchase Contract Settlement Date. The
Company may select a Three-Day Remarketing Period during the Period for Early
Remarketing by designating each of the three sequential Remarketing Dates to
comprise such Three-Day Remarketing Period, provided that no Remarketing Date
during the Period for Early Remarketing shall occur earlier than the third
Business Day prior to August 16, 2007 nor later than the ninth Business Day
prior to the Purchase Contract Settlement Date.

 

(b)           The Company will request, not less than 10 Business Days
prior to each Remarketing Announcement Date, that the Depositary (or any
successor or its nominee) notify the Depositary participants holding Senior
Notes, Corporate Units and Treasury Units of the Remarketing.

 

(c)           On the Remarketing Announcement Date, the Company shall
make an announcement regarding the proposed Remarketing of the Senior Notes
(the “Remarketing Announcement”).  The Remarketing Announcement shall specify
the following:

 

(i)    (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Senior Notes may be remarketed on any
and all of the sixth, seventh and eighth Business Days following such
Remarketing Announcement Date;

 

(B)           if the Remarketing Announcement relates to a Remarketing
to occur during the Final Remarketing Period, that the Senior Notes may be
remarketed on any and all of the third, fourth and fifth Business Days
following such Remarketing Announcement Date;

 

(ii)   (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Reset Date will be the third Business
Day following the Remarketing Date on which the Senior Notes are successfully
remarketed; or

 

10

 

(B)           if the Remarketing Announcement
relates to a Remarketing to occur during the Final Three-Day Remarketing
Period, that the Reset Date will be February 16, 2008 if there is a Successful
Remarketing;

 

(iii)  that the Reset Rate and Subsequent Interest
Payment Dates for the Senior Notes will be established, and that the Stated
Maturity of the Senior Notes may be extended by the Company, on the Successful
Remarketing Date and effective on and after the Reset Date;

 

(iv)  (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Reset Rate will equal the interest rate
on the Senior Notes that will enable the Senior Notes to be remarketed at a
price (the “Remarketing Price”) equal to at
least 100% of the sum of the Remarketing Treasury Portfolio Purchase Price and
the Separate Senior Notes Purchase Price, plus the applicable Remarketing Fee;
or

 

(B)           if the Remarketing Announcement
relates to a Remarketing to occur during the Final Three-Day Remarketing
Period, that the Reset Rate will equal the interest rate on the Senior Notes
that will enable the Senior Notes to be remarketed at a price (the “Contract Settlement Price”) equal to at least 100% of their
aggregate principal amount, plus the applicable Remarketing Fee; and

 

(v)   the possible ranges of the Remarketing Fee,
expressed as a percentage of the Remarketing Treasury Portfolio Purchase Price
and the Separate Senior Notes Purchase Price or as a percentage of the
aggregate principal amount of the Senior Notes to be remarketed, as the case
may be.

 

On the Business Day
immediately following the Remarketing Announcement Date, the Company will issue
a press release through any appropriate news agency, including Dow Jones &
Company, Inc. and Bloomberg Business News containing the Remarketing
Announcement and publish such Remarketing Announcement on the Company’s website
or through another public medium as the Company may use at the time.

 

(d)           Each Holder of Separate Senior Notes may elect to have
Separate Senior Notes held by such Holder remarketed in any Remarketing.  A Holder making such an
election must, pursuant to the Purchase Contract and Pledge Agreement, notify
the Custodial Agent and deliver such Separate Senior Notes to the Custodial
Agent on or prior to 5:00 p.m., New York City time, on the second Business Day,
but no earlier than the fifth Business Day, immediately preceding the first
Remarketing Date of any Three-Day Remarketing Period.  Any such notice and delivery may not be
conditioned upon the level at which the Reset Rate is established in the
Remarketing.  Any such notice and
delivery may be withdrawn on or prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the first Remarketing Date of the
applicable Three-Day Remarketing Period in accordance with the provisions set
forth in the Purchase Contract and Pledge Agreement.  Any such notice and delivery not withdrawn by
such time will

 

11

 

be irrevocable with respect to such Remarketing.  Pursuant to Section 5.02 of the Purchase
Contract and Pledge Agreement, promptly after 11:00 a.m., New York City time, on the Business Day
immediately preceding the first Remarketing Date of the applicable Three-Day
Remarketing Period, the Custodial Agent, based on the notices and deliveries
received by it prior to such time, shall notify the Remarketing Agent of the
principal amount of Separate Senior Notes to be tendered for Remarketing and
shall cause such Separate Senior Notes to be presented to the Remarketing
Agent.  Under Section 5.02 of the
Purchase Contract and Pledge Agreement, certain Senior Notes that are
components of Corporate Units will be deemed tendered for Remarketing and will
be remarketed in accordance with the terms of the Remarketing Agreement.

 

(e)           Unless and until there has been a Successful
Remarketing, on each Remarketing Date during a Three-Day Remarketing Period,
the Company shall cause the Remarketing Agent to use its reasonable efforts to
remarket the Senior Notes that the Collateral Agent and the Custodial Agent
shall have notified the Remarketing Agent have been tendered for, or otherwise
are to be included in, the Remarketing, at a price per $1,000 principal amount
of the Senior Notes such that the aggregate price for the aggregate principal
amount of the Senior Notes being Remarketed on that date will be approximately
(i) if the Reset Date is not the Purchase Contract Settlement Date, the
Remarketing Price or (ii) if the Reset Date is the Purchase Contract Settlement
Date, the Contract Settlement Price.

 

(f)            In the event of a Successful Remarketing, on the
Remarketing Date, the Remarketing Agent shall notify (i) the Collateral Agent,
the Custodial Agent, the Purchase Contract Agent, the Company, the Trustee, the
Depositary and the Clearing Agency of the Reset Rate determined in such
Remarketing, the Subsequent Interest Payment Dates and the related Regular
Record Dates, any extension by the Company of the Stated Maturity of the Senior
Notes and the aggregate principal amount of Senior Notes sold in such
Remarketing, (ii) each purchaser of the Reset Rate, the Subsequent Interest
Payment Dates and the related Regular Record Dates, the Stated Maturity of the
Senior Notes and the aggregate principal amount such purchaser is to purchase
and (iii) each purchaser to give instructions to its Depositary participant to
pay the purchase price on the Reset Date in same day funds against delivery of
the Senior Notes purchased through the Depositary’s normal procedures.  In addition, the Company will request the
Depositary to notify its participants, no later than the Business Day next
succeeding the Successful Remarketing Date, of the Reset Rate, the Subsequent
Interest Payment Dates and related Regular Record Dates and any extension of
the Stated Maturity of the Senior Notes.

 

(g)           In accordance with the Depositary’s normal procedures, on
the Reset Date, the transactions described above with respect to each Senior
Note tendered for purchase and sold in such Remarketing shall be executed
through the Depositary, and the accounts of the respective Depositary
participants shall be debited and credited and such Senior Notes delivered by
book entry as necessary to effect purchases and sales of such Senior
Notes.  The Depositary shall make payment
in accordance with its normal procedures.

 

12

 

(h)           In no event shall the aggregate price for the Senior Notes
in a Remarketing be less than a price (the “Minimum
Price”) equal to (i) in the case of a Remarketing during the Period
for Early Remarketing, 100% of the sum of the Remarketing Treasury Portfolio
Purchase Price and the Separate Senior Notes Purchase Price or (ii) in the case
of a Remarketing during the Final Three-Day Remarketing Period, 100% of the
aggregate principal amount of the Senior Notes being remarketed.  A remarketing attempt on any Remarketing Date
will be deemed unsuccessful if the (i) Remarketing Agent is unable to remarket
the Senior Notes for an aggregate price that is at least equal to the Minimum
Price; or (ii) if a condition precedent to such Remarketing is not fulfilled.

 

(i)            The right of each Holder of Senior Notes that are
included in Corporate Units to have such Senior Notes, and each Holder of
Separate Senior Notes to have any Separate Senior Notes (together, the “Remarketed Senior Notes”), remarketed and sold on any
Remarketing Date shall be limited to the extent that (i) the Remarketing Agent
conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii)
a Tax Event Redemption has not occurred prior to such Remarketing Date, (iii)
the Remarketing Agent is able to find a purchaser or purchasers for Remarketed
Senior Notes at the Minimum Price, and (iv) the purchaser or purchasers deliver
the purchase price therefor to the Remarketing Agent as and when required.

 

(j)            Neither the Trustee, the Company nor the Remarketing
Agent shall be obligated in any case to provide funds to make payment upon
tender of Senior Notes for Remarketing.

 

Section 7.02. 
Reset Rate.  (a) In
connection with each Remarketing, the Remarketing Agent shall determine the
reset interest rate (rounded to the nearest one-thousandth (0.001) of one
percent per annum) that it believes will, when applied to the Senior Notes
(with any extension of the Stated Maturity as determined by the Company
pursuant to Section 2.05 of this Supplemental Indenture taken into account),
enable the aggregate principal amount of the Senior Notes being remarketed on
such date to be sold at an aggregate price equal to at least (i) if the Reset
Date is not the Purchase Contract Settlement Date, the Remarketing Price or (ii)
if the Reset Date is the Purchase Contract Settlement Date, the Contract
Settlement Price.  The reset interest
rate established on the Remarketing Date on which a Successful Remarketing
occurs shall be the “Reset Rate.”

 

(b)           Anything herein to the contrary notwithstanding, the Reset
Rate shall not exceed the maximum rate permitted by applicable law and the
Remarketing Agent shall have no obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the Senior Notes and they
shall rely solely upon written notice from the Company (which the Company
agrees to provide prior to the eighth Business Day before the first
Remarketing Date of any Three-Day Remarketing Period) as to whether or not there is any
such limitation and, if so, the maximum permissible Reset Rate.

 

(c)           In
the event of a Failed Remarketing or if no Senior Notes are included in
Corporate Units and none of the holders of the Separate Senior Notes elect to
have their Senior

 

13

 

Notes remarketed in any Remarketing, the applicable interest rate on
the Senior Notes will not be reset and will continue to be the Interest Rate.

 

(d)           In
the event of a Successful Remarketing, the Interest Rate shall be reset at the
Reset Rate as determined by the Remarketing Agent under the Remarketing
Agreement.  The Reset Rate shall be
effective from and after the Reset Date.

 

Section 7.03.  Failed Remarketing.   (a)  If, by 4:00 p.m., New York City time,
on the last Remarketing Date of any Three-Day Remarketing Period, the
Remarketing Agent is unable to remarket all of the Remarketed Senior Notes at
the Minimum Price, pursuant to the terms and conditions hereof, a Failed
Remarketing shall be deemed to have occurred, and the Remarketing Agent shall
so advise, by telephone the Depositary, the Purchase Contract Agent and the
Company.  Promptly following any Failed
Remarketing, the Remarketing Agent shall return, no later than the Business Day
immediately following the end of such Three-Day Remarketing Period, the
Separate Senior Notes submitted for Remarketing, if any, to the Custodial Agent
for distribution to the appropriate holders pursuant to the terms of the Purchase
Contract and Pledge Agreement.

 

(b)           The
Company shall cause a notice of such Failed Remarketing to be published through any appropriate
news agency, including Dow Jones & Company, Inc. and Bloomberg Business
News no later than 9:00 a.m., New York City time, on the Business Day following
the last Remarketing Date of such Three-Day Remarketing Period (which notice,
if the unsuccessful Remarketing attempt shall occur during the Final Three-Day
Remarketing Period, shall include the procedures that must be followed if a
Holder of Senior Notes wishes to exercise its right to put such Senior Notes to
the Company).

 

Section 7.04. 
Put Right.  (a) If there has not been a Successful
Remarketing prior to the Purchase Contract Settlement Date, Holders of Separate
Senior Notes and Holders of Senior Notes that are a component of Corporate
Units will, subject to this Section 7.04, have the right (the “Put Right”) to require the Company to purchase their Senior
Notes, on the Purchase Contract Settlement Date, at a price per Senior Note
equal to $1,000 ($50 per Applicable Ownership Interest) plus accrued and unpaid
interest to but excluding the Purchase Contract Settlement Date (the “Put Price”); provided, however,
that as of the Purchase Contract Settlement Date, Holders of Senior Notes that
are part of a Corporate Unit with respect to which a Put Right has been
automatically exercised under clause (b) below shall be deemed to have elected
to pay the Purchase Price for the shares of Common Stock to be issued under the
related Purchase Contract from a portion of the Proceeds of the Put Right of
such Senior Notes equal to the Purchase Price, less any Deferred Contract
Adjustment Payments, in full satisfaction of such Holders’ obligations under
the Purchase Contracts, and any remaining amount of the Put Price following
satisfaction of the related Purchase Contract will be paid to such Holder.

 

(b)           The
Put Right of Holders of Senior Notes that are part of Corporate Units will be
automatically exercised unless such Holders (1) prior to 11:00 a.m., New York
City time, on the second Business Day immediately preceding the Purchase
Contract Settlement Date, provide

 

14

 

written notice to the Purchase Contract Agent of their intention to settle
the related Purchase Contract with separate cash, and (2) on or prior to 11:00
a.m., New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, deliver to the Collateral Agent $50 in cash
per Purchase Contract, in each case pursuant to the Purchase Contract
Agreement.  The Put Price for Holders of
Separate Senior Notes shall be applied in accordance with Section 7.04(c)
below.

 

(c)           The
Put Right of a Holder of a Separate Senior Note shall only be exercisable upon
delivery of a notice to the Trustee by such Holder on or prior to the second
Business Day prior to the Purchase Contract Settlement Date.  On or prior to the Purchase Contract
Settlement Date, the Company shall deposit with the Trustee immediately available
funds in an amount sufficient to pay, on the Purchase Contract Settlement Date,
the aggregate Put Price of all Separate Senior Notes with respect to which a
Holder has exercised a Put Right.  In
exchange for any Separate Senior Notes surrendered pursuant to the Put Right,
the Trustee shall then distribute such amount to the Holders of such Separate
Senior Notes.

 

Section 7.05.          Additional Event of Default. 
In addition to the events listed as Events of Default in Section 501 of
the Base Indenture, it shall be an additional Event of Default with respect to
the Senior Notes, if the Company shall not have satisfied its obligation to pay
the Put Price when due with respect to any Separate Senior Note following
exercise of the Put Right in accordance with Section 7.04.

 

ARTICLE 8

Tax Treatment

 

Section 8.01.  Tax Treatment.  The Company agrees, and by
acceptance of a Corporate Unit, each holder of a Corporate Unit will be deemed
to have agreed (1) for United States federal, state and local income and
franchise tax purposes to treat the acquisition of a Corporate Unit as the
acquisition of the Senior Note and the Purchase Contract constituting the
Corporate Unit and (2) to treat the Senior Note as indebtedness for United
States federal, state and local income and franchise tax purposes.  A Holder of Senior Notes may obtain the
comparable yield and projected payment schedule for the Senior Notes,
determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting
a written request for such information to the Company at the following
address:  Southern Union Company, One PEI
Center, Second Floor, Wilkes-Barre, Pennsylvania 18711 (fax:  570-829-8900), Attention: Thomas F. Karam.

 

ARTICLE 9

Miscellaneous

 

Section 9.01.  Ratification Of Indenture. The
Base Indenture, as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed, and this Supplemental

 

15

 

Indenture shall be deemed part of the Indenture in the manner and to
the extent herein and therein provided.

 

Section 9.02  Responsibility For
Recitals, Etc.  The recitals
herein and in the Senior Notes (except in the Trustee’s certificate of
authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture or of the Senior
Notes.  The Trustee shall not be
accountable for the use or application by the Company of the Senior Notes or of
the proceeds thereof.

 

Section 9.03.
Separability.  In case any one
or more of the provisions contained in this Supplemental Indenture or in the
Senior Notes shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then, to the extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Supplemental Indenture or of the Senior Notes, but this
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 9.04  Successors And Assigns.  This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company and the Trustee.

 

Section 9.05.  Governing Law.  THIS SUPPLEMENTAL INDENTURE AND
THE SENIOR NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW
PROVISIONS THEREOF.  The Company and the
Trustee hereby submit to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Supplemental Indenture or the Senior Notes.  The Company and the Trustee irrevocably waive
to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.

 

Section 9.06.  Counterparts. 
This Supplemental Indenture may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

 

16

 

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

	
   

  	
  SOUTHERN
  UNION COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J.
  Kvapil

  
	
   

  	
   

  	
  Name:

  	
  David J.
  Kvapil

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President &

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer

  

 

	
  Attest:

  	
  /s/ Robert M. Kerrigan

  
	
   

  	
   

  
	
  Name:

  	
  Robert M. Kerrigan

  
	
  Title:

  	
  Corporate Counsel &

  
	
   

  	
  Assistant Secretary

  
			

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.
  Schmalzal

  
	
   

  	
   

  	
  Name:

  	
  Paul J.
  Schmalzal

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

	
  Attest:

  	
  /s/ Rosa
  Ciaccia

  
	
   

  	
   

  
	
  Name:

  	
  Rosa Ciaccia

  
	
  Title:

  	
  Trust
  Officer

  
			

 

 

EXHIBIT A

 

[IF THIS SENIOR NOTE IS TO BE A
GLOBAL SECURITY, INSERT:]

THIS SENIOR NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY OR A NOMINEE OF THE
DEPOSITORY TRUST COMPANY. THIS SENIOR NOTE IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY TO A
NOMINEE OF THE DEPOSITORY TRUST COMPANY OR BY A NOMINEE OF THE DEPOSITORY TRUST
COMPANY TO THE DEPOSITORY TRUST COMPANY OR ANOTHER NOMINEE OF THE DEPOSITORY
TRUST COMPANY.

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

FOR PURPOSES OF SECTIONS 1272,
1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SENIOR
NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. IN ADDITION, THIS SENIOR
NOTE IS SUBJECT TO THE UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING
CONTINGENT PAYMENT DEBT INSTRUMENTS IN TREASURY REGULATIONS SECTION 1.1275-4
(THE “CONTINGENT DEBT REGULATIONS”). FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES, HOLDERS WILL BE REQUIRED TO ACCRUE INTEREST WITH RESPECT TO THIS
SENIOR NOTE AS ORIGINAL ISSUE DISCOUNT ACCORDING TO THE “NONCONTINGENT BOND
METHOD” SET FORTH IN THE CONTINGENT DEBT REGULATIONS, USING THE COMPARABLE
YIELD OF 4.77%, COMPOUNDED SEMI-ANNUALLY, AND THE PROJECTED PAYMENT SCHEDULE AS
DETERMINED BY US. UPON WRITTEN REQUEST BY A HOLDER OF THIS SENIOR NOTE WE WILL
PROMPTLY PROVIDE TO SUCH HOLDER THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT
SCHEDULE. SUCH WRITTEN REQUEST SHOULD BE SENT TO US AT THE FOLLOWING ADDRESS:
SOUTHERN

 

A-1

 

UNION COMPANY, ONE PEI CENTER,
SECOND FLOOR, WILKES-BARRE, PENNSYLVANIA 18711 (FAX: 570-829-8900), ATTENTION:
THOMAS F. KARAM.

 

SOUTHERN UNION COMPANY

 

4.375% Senior Notes initially due February 16, 2010

 

$                        

 

	
  No.  [   ]

  	
  CUSIP No.                              

  

 

 

SOUTHERN UNION COMPANY, a
corporation organized and existing under the laws of Delaware (hereinafter
called the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [Cede & Co.]/[JPMorgan Chase Bank,
N.A., as Purchase Contract Agent], or its registered assigns, the principal sum
of up to ONE HUNDRED MILLION ($100,000,000), as set forth in the Schedule of
Increases or Decreases in the Senior Note attached hereto, on the Stated
Maturity, and to pay interest thereon from February 11, 2005 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, quarterly in arrears on February 16, May 16, August 16 and November 16
(each a “Quarterly Interest Payment Date”) of
each year, commencing May 16, 2005, at the rate of 4.375% per annum through and
including the day immediately preceding the Reset Date, if any, and thereafter
semi-annually in arrears on the Subsequent Interest Payment Dates (together
with the Quarterly Interest Payment Dates, the “Interest
Payment Dates”) at the Reset Rate, in each case on the basis of a
360-day year consisting of twelve 30-day months, until the principal hereof is
paid or duly provided for or made available for payment, and (to the extent
that the payment of such interest shall be legally enforceable) to pay
interest, compounded quarterly, at the rate of 4.375% per annum on any overdue
principal and payment of interest through and including the day immediately
preceding the Reset Date, if any, and thereafter, compounded semi-annually, at
the Reset Rate, if any.  The amount of interest payable for
any period shorter than a full quarterly or semi-annual period, as the case may
be, for which interest is computed will be computed on the basis of a 30-day
month and, for any period less than a month, on the basis of the actual number
of days elapsed per 30-day month.  The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Senior Note (or one or more Predecessor Senior Notes) is
registered at the close of business on the Record Date for such Interest Payment
Date.

 

Payment of the principal of and interest on this Senior Note will be
made at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, which shall initially be the
Corporate Trust Office of the Trustee, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however,
that payment of interest may be made at the option of the

 

A-2

 

Company by check mailed to the Holder at such address as shall appear
in the Security Register or by wire transfer to an account appropriately
designated by the Holder entitled to payment.

 

Reference is hereby made to the
further provisions of this Senior Note set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Senior Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-3

 

IN WITNESS
WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

 

 

	
  Dated:

  	
   

  	
   

  

 

 

	
   

  	
  SOUTHERN
  UNION COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Attest

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes
referred to in the within mentioned Indenture.

 

	
  Dated:

  	
   

  	
   

  

 

 

	
  JPMORGAN
  CHASE BANK, N.A., as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  

 

A-4

 

FORM OF REVERSE OF SENIOR NOTE

 

This Senior
Note is one of a duly authorized issue of securities of the Company (herein
called the “Senior Notes”), issued and to be
issued in one or more series under an Indenture (the “Base
Indenture,” and as further supplemented by the Second Supplemental
Indenture, the “Indenture”), dated as of January
31, 1994, between the Company and JPMorgan Chase Bank, N.A., as Trustee, as
further supplemented by the Second Supplemental Indenture (the “Second Supplemental Indenture”), dated as of February 11,
2005, to which Indenture reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Senior Notes and of the terms
upon which the Senior Notes are, and are to be, authenticated and
delivered.  This Senior Note is one of
the series designated on the face hereof, limited in aggregate principal amount
to $100,000,000.

 

Unless an
earlier Tax Event Redemption has occurred, this Senior Note shall mature and
the principal amount thereof shall be due and payable together with all accrued
and unpaid interest thereon on the Stated Maturity.  The “Stated Maturity”
shall mean February 16, 2010 or such later date falling on or prior to the
tenth anniversary of the Reset Date determined by the Company on the Successful
Remarketing Date (subject to agreement between the Company and the Remarketing
Agent pursuant to Section 4(a) of the Remarketing Agreement with respect to the
Remarketing Fee), it being understood that if there shall have been a Failed
Remarketing, the Stated Maturity shall remain February 16, 2010.  Any extension of the Stated Maturity in
accordance with this shall be effective on and after the Reset Date.

 

“Subsequent Interest Payment Date” means, following the Reset
Date, each semi-annual interest payment date established by the Company on the
Remarketing Date on which the Senior Notes are successfully remarketed.

 

If a Tax Event
shall occur and be continuing, the Company may, at its option, redeem the
Senior Notes of this series in whole, but not in part, on any Interest Payment
Date prior to the earlier of the Successful Remarketing Date or the Purchase
Contract Settlement Date, at a price per Senior Note equal to the Redemption
Price as set forth in the Indenture.

 

If this Senior
Note is not a component of Corporate Units, the Holder of this Senior Note may,
on or prior to the second Business Day, but no earlier than the fifth Business
Day, immediately preceding the first Remarketing Date of any Three-Day
Remarketing Period, elect to have this Senior Note remarketed in the same
manner as Pledged Senior Notes, by delivering this Senior Note, along with a
notice of such election to JPMorgan Chase Bank, N.A., as Custodial Agent, for
Remarketing in accordance with the Purchase and Pledge Agreement.

 

If there has
not been a Successful Remarketing prior to the Purchase Contract Settlement
Date, the holders of Senior Notes will have the right to require the Company to
purchase their

 

A-5

 

Senior Notes on the Purchase Contract Settlement Date, all as more
fully described in the Indenture.

 

The Senior
Notes are not entitled to the benefit of any sinking fund and will not be
subject to defeasance.

 

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

 

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Senior Notes at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Senior
Notes at the time Outstanding.  The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Senior Notes at the time Outstanding, on
behalf of the Holders of all Senior Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Senior Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Senior Note and of
any Senior Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Senior Note.

 

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 Company, which is
absolute and unconditional, to pay the principal of 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 set forth, the
transfer of this Senior Note is registrable in the Securities Register, upon
surrender of this Senior Note for registration of transfer at the office or
agency of the Company in any place where the principal of and interest on this
Senior Note are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
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, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

The Senior
Notes of this series are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof except as provided
for in Section 2.03 of Second Supplemental Indenture.  As provided in the Indenture and subject to
certain limitations therein set forth, Senior Notes of this series are
exchangeable for a like aggregate principal amount of Senior Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.

 

A-6

 

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

 

Prior to due
presentment of this Senior Note for registration of transfer, the Company, the
Trustee and any agent of the Company 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 Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

 

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

 

A-7

 

The Company
agrees, and by acceptance of a Corporate Unit, each holder of a Corporate Unit
will be deemed to have agreed (1) for United States federal, state and local
income and franchise tax purposes to treat the acquisition of a Corporate Unit
as the acquisition of the Senior Note and the Purchase Contract constituting
the Corporate Unit and (2) to treat the Senior Note as indebtedness for United
States federal, state and local income and franchise tax purposes.  A Holder of Senior Notes may obtain the
comparable yield and projected payment schedule for the Senior Notes,
determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting
a written request for it to the Company at the following address: Southern
Union Company, One PEI Center, Second Floor, Wilkes-Barre, Pennsylvania 18711
(fax:  570-829-8900), Attention: Thomas
F. Karam.

 

A-8

 

ASSIGNMENT

 

	
  FOR VALUE RECEIVED, the
  undersigned assigns and transfers this Senior Note to:

  
	
   

  
	
   

  
	
   

  
	
  (Insert assignee’s
  social security or tax identification number)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Insert address and zip
  code of assignee)

  
	
   

  
	
  and irrevocably appoints

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  agent to transfer this
  Senior Note on the books of the Company. The agent may substitute another to
  act for him or her.

  
	
   

  
	
  Date:

  	
   

  	
   

  

 

	
   

  	
  Signature:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  
	
  (Sign exactly as your
  name appears on the other side of this Senior Note)

  
	
   

  
	
   

  
	
  DTC Participant #: 

  	
   

  	
   

  
							

 

A-9

 

SIGNATURE GUARANTEE

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

A-10

 

SCHEDULE OF INCREASES OR DECREASES IN SENIOR NOTE

 

The following increases or
decreases in a part of this Senior Note have been made:

 

	
  Date

  	
   

  	
  Amount of decrease

  in principal amount

  of this Senior Note

  	
   

  	
  Amount of increase in

  principal amount of

  this Senior Note

  	
   

  	
  Principal amount of 

  this Senior Note

  following such

  decrease (or increase)

  	
   

  	
  Signature of

  authorized officer of

  Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-11EXHIBIT 4.5

 

REMARKETING
AGREEMENT

 

                             ,                   

 

Merrill
Lynch, Pierce, Fenner & Smith

Incorporated

4 World Financial Center

New York, NY 10080

 

J.P. Morgan Securities Inc.

277 Park Avenue, 8th
Floor

New York, NY 10172

 

JPMorgan Chase Bank, N.A.

4 New York Plaza, 15th
Floor

New York, NY 10004

 

 

Ladies and Gentlemen:

 

This Agreement is dated as
of
                     ,
        (this “Agreement”) among Southern Union Company, a Delaware
corporation (the “Company”), Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), J.P. Morgan Securities Inc. (“JPM Securities”), and JPMorgan Chase Bank,
N.A., not individually but solely as Purchase Contract Agent (the “Purchase Contract Agent”) and as
attorney-in-fact of the holders of Purchase Contracts (as defined in the
Purchase Contract and Pledge Agreement referred to below).

 

SECTION 1.  Definitions.

 

(a)       Capitalized terms used and not defined in
this Agreement shall have the meanings set forth in the Purchase Contract and
Pledge Agreement, dated as of February 11, 2005, among the Company, JPMorgan
Chase Bank, N.A., as Purchase Contract Agent, and JPMorgan Chase Bank, N.A., as
Collateral Agent, Custodial Agent and Securities Intermediary, as amended from
time to time (the “Purchase Contract and
Pledge Agreement”) or the Indenture, dated as of January 31, 1994,
between the Company and JPMorgan Chase Bank, N.A., as the Indenture Trustee, as
supplemented by the Second Supplemental Indenture, dated as of February 11, 2005,

 

 

pursuant to which the Senior
Notes were issued (as so supplemented by the Second Supplemental Indenture, the
“Indenture”).

 

(b)       As used in this Agreement, the following
terms have the following meanings:

 

“Preliminary Prospectus” means any preliminary prospectus
relating to the Remarketed Senior Notes included in the Registration Statement,
including the documents incorporated by reference therein as of the date of
such Preliminary Prospectus; and any reference to any amendment or supplement
to such Preliminary Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus under the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by
reference in such Preliminary Prospectus.

 

“Prospectus” means the prospectus relating to the Remarketed
Senior Notes included in the Registration Statement, in the form in which it
was first used by the Remarketing Agent to confirm sales of the Remarketed
Senior Notes in the Remarketing, including the documents incorporated by
reference therein as of the date of such Prospectus; and any reference to any
amendment or supplement to such Prospectus shall be deemed to refer to and
include any documents filed after the date of such Prospectus under the
Exchange Act, and incorporated by reference in such Prospectus.

 

“Registration Statement” means a registration statement under
the Securities Act of 1933, as amended (the “Securities
Act”) prepared by the Company pursuant to Section 5 hereunder
covering, inter  alia, the Remarketing of the Remarketed Senior
Notes, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in such registration statement, and any
post-effective amendments thereto.

 

“Remarketed Senior Notes” means the Pledged Senior Notes and
the Separate Senior Notes, if any, subject to Remarketing as identified to the
Remarketing Agent by the Purchase Contract Agent and the Custodial Agent,
respectively, promptly after 11:00 a.m., New York City time, on the Business
Day immediately preceding the first Remarketing Date of the applicable
Three-Day Remarketing Period, and shall include: (a) (i) in the case of any
Remarketing during the Period for Early Remarketings, the Pledged Senior Notes
and (ii) in the case of the Final Three Day Remarketing, the Senior Notes of
the Holders of Corporate Units who have not notified the Purchase Contract
Agent prior to 5:00 p.m., New York City time, on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date of their intention
to effect a Cash Settlement of the related Purchase Contracts pursuant to the
terms of the Purchase Contract and Pledge Agreement or who have so notified the
Purchase Contract Agent but failed to make the required cash payment prior to
11:00 a.m., New York City time, on the sixth Business Day immediately preceding
the Purchase Contract Settlement Date pursuant to the terms of the Purchase
Contract and Pledge Agreement, and (b) the Separate Senior Notes of the holders
of Separate Senior Notes, if any, who have elected to have their Separate
Senior Notes be remarketed in such Remarketing pursuant to the terms of the
Purchase Contract and Pledge Agreement.

 

“Remarketing” means the remarketing of the Remarketed Senior
Notes pursuant to this Remarketing Agreement.

 

2

 

“Remarketing Agent” means any of JPM Securities or Merrill
Lynch appointed as the Remarketing Agent by the Company pursuant to Section
2(a) hereof.

 

“Remarketing Materials” means the Preliminary Prospectus, the
Prospectus or any other information furnished by the Company to the Remarketing
Agent for distribution to investors in connection with the Remarketing.

 

“Senior Notes” means the Senior Notes initially due
August 16, 2008 of the Company.

 

“Settlement Date” means, following a Successful Remarketing,
(i) with respect to a Remarketing during the Period for Early Remarketing, the
third Business Day following the Successful Remarketing Date and (ii) with
respect to a Remarketing during the Final Three-Day Remarketing Period,
February 16, 2008.

 

“Transaction Documents” means this Agreement, the Purchase
Contract and Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.

 

SECTION 2.  Appointment and Obligations of the Remarketing
Agent.

 

(a)       On or before the 20th Business
Day prior to the first Business Day (the “Appointment
Date”) of the Period for Early Remarketing, the Company shall send
written notice appointing either JPM Securities or Merrill Lynch as the
exclusive Remarketing Agent for the purpose of (i) Remarketing the Senior Notes
on behalf of the holders thereof, (ii) determining, in consultation with
the Company, in the manner provided for herein and in the Purchase Contract and
Pledge Agreement and the Indenture, the Reset Rate for the Senior Notes, and
(iii) performing such other duties as are assigned to the Remarketing Agent in
the Transaction Documents; provided
that if the Company fails to appoint a Remarketing Agent pursuant to this
Section 2(a) by the Appointment Date, the Company shall be deemed to have
appointed [JPM Securities/Merrill Lynch] as the Remarketing Agent.  Each of JPM Securities and Merrill Lynch
hereby agree that if the Company chooses to appoint it as the Remarketing
Agent, it shall, subject to the terms and conditions set forth herein, accept
such appointment by the Company as the exclusive Remarketing Agent.

 

(b)       Pursuant to this Agreement, the
Remarketing Agent agrees, unless a Tax Event Redemption has occurred prior to
such date and subject to the terms and conditions set forth herein, to use its
reasonable efforts to remarket (i) on each Remarketing Date during the
Three-Day Remarketing Period selected by the Company, if any, during the Period
for Early Remarketing and (ii) on each Remarketing Date during the Final
Three-Day Remarketing Period if no Successful Remarketing has occurred prior to
the Final Three-Day Remarketing Period, in each case in accordance with the
provisions of the Senior Notes and the Indenture, until the Senior Notes have
been successfully remarketed on a Remarketing Date, the Senior Notes that the
Collateral Agent or the Custodial Agent shall have notified the Remarketing
Agent have been tendered for, or otherwise are to be included in, the
Remarketing, at a price per $1,000 principal amount of Senior Notes such that
the aggregate price at which such Senior Notes are being remarketed will equal
approximately (i) if the related Reset Date is not the Purchase Contract
Settlement Date, the Remarketing Price, or (ii) if the related Reset Date is
the Purchase Contract Settlement Date, the Contract Settlement Price.  Notwithstanding the preceding sentence, the
Remarketing Agent shall not remarket any Senior Notes for a price less than the
price (the “Minimum Price”)
necessary for the aggregate principal amount of the Senior Notes being 

 

3

 

remarketed to have an
aggregate price (i) if the proposed Reset Date is not the Purchase Contract
Settlement Date, equal to 100% of the sum of the Remarketing Treasury Portfolio
Purchase Price and the Separate Senior Notes Purchase Price, or (ii) if the
proposed Reset Date is the Purchase Contract Settlement Date, equal to 100% of
the aggregate principal amount of such Remarketed Senior Notes.  The Remarketing Agent shall not be obligated
to remarket any Senior Notes if a condition precedent set forth in this
Agreement to such Remarketing is not fulfilled or if the Remarketing of such Senior
Notes would violate applicable law.

 

(c)       In connection with each Remarketing, the
Remarketing Agent shall determine, in consultation with the Company, the rate
per annum, rounded to the nearest one-thousandth (0.001) of one percent per
annum, that the Senior Notes should bear (the “Reset Rate”) in order for the Remarketed Senior Notes to have
an aggregate market value equal to the Remarketing Price or the Contract
Settlement Price, as the case may be, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Senior Notes at the Remarketing Price or Contract Settlement Price,
as the case may be, in such Remarketing, provided
that such rate shall not exceed the maximum interest rate permitted by law.

 

(d)       In the event of a Failed Remarketing or
if no Senior Notes are included in Corporate Units, and none of the holders of
the Separate Senior Notes elect to have Senior Notes be remarketed in such
Remarketing, the applicable interest rate on the Senior Notes will not be reset
and will continue to be the Interest Rate set forth in the Indenture, as
supplemented from time to time.

 

(e)       If, by 4:00 p.m., New York City time, on
the last Remarketing Date of any Three-Day Remarketing Period, the Remarketing
Agent is unable to remarket all of the Remarketed Senior Notes at or greater
than the Minimum Price, pursuant to the terms and conditions hereof, a Failed
Remarketing shall be deemed to have occurred, and the Remarketing Agent shall
so advise, by telephone the Depositary, the Purchase Contract Agent and the
Company.  Whether or not there has been a
Failed Remarketing will be determined in the sole reasonable discretion of the
Remarketing Agent.  Promptly following
any Failed Remarketing, the Remarketing Agent shall return, no later than the
Business Day immediately following the end of such Three-Day Remarketing
Period, the Separate Senior Notes submitted for Remarketing, if any, to the
Custodial Agent for distribution to the appropriate holders.

 

(f)        In the event of a Successful
Remarketing, by approximately 4:30 p.m., New York City time, on the applicable
Successful Remarketing Date, the Remarketing Agent shall advise, by telephone:

 

(i)        the Depositary, the
Purchase Contract Agent and the Company of the Reset Rate determined by the
Remarketing Agent in such Remarketing and the number of Remarketed Senior Notes
sold in such Remarketing;

 

(ii)       each purchaser (or the
Depositary Participant thereof) of Remarketed Senior Notes of the Reset Rate,
the number of Remarketed Senior Notes such purchaser is to purchase, the
Subsequent Interest Payment Dates and the extended maturity date, if
applicable; and

 

4

 

(iii)      each such purchaser to
give instructions to its Depositary Participant to pay the purchase price on
the third business day immediately following the date of such Successful
Remarketing in same day funds against delivery of the Remarketed Senior Notes
purchased through the facilities of the Depositary.

 

The Remarketing Agent shall
also, if required by the Securities Act or the rules and regulations
promulgated thereunder, deliver to each purchaser a Prospectus in connection
with the Remarketing.

 

(g)       After deducting the Remarketing Fee
specified in Section 4 below, the Proceeds from a Successful Remarketing (i)
with respect to the Senior Notes that are components of the Corporate Units,
shall be paid to the Collateral Agent in accordance with Section 5.02 of the
Purchase Contract and Pledge Agreement and (ii) with respect to the Separate
Senior Notes, shall be paid to the Custodial Agent for payment to the holders
of such Separate Senior Notes in accordance with Section 5.02 of the Purchase
Contract and Pledge Agreement.

 

(h)       The right of each holder of Separate Senior
Notes or Corporate Units to have Senior Notes remarketed and sold on any
Remarketing Date shall be subject to the conditions that (i) the Remarketing
Agent conducts a Remarketing pursuant to the terms of this Agreement, (ii) a
Tax Event Redemption has not occurred prior to such Remarketing Date, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for Remarketed
Senior Notes at or greater than the Minimum Price, and (iv) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agent as and
when required.

 

(i)        It is understood and agreed that the
Remarketing Agent shall not have any obligation whatsoever to purchase any
Remarketed Senior Notes, whether in the Remarketing or otherwise, and shall in
no way be obligated to provide funds to make payment upon tender of Senior
Notes for Remarketing or to otherwise expend or risk its own funds or incur or
to be exposed to financial liability in the performance of its duties under
this Agreement, and without limitation of the foregoing, the Remarketing Agent
shall not be deemed an underwriter of the Remarketed Senior Notes.  The Company shall similarly not be obligated
in any case to provide funds to make payment upon tender of the Senior Notes
for Remarketing.

 

SECTION 3.  Representations and
Warranties of the Company. The
Company represents and warrants (i) on and as of the date any Remarketing
Materials are first distributed in connection with the Remarketing (the
“Commencement Date”), (ii) on and as of the First Remarketing Date of the
applicable Three-Day Remarketing Period and (iii) on and as of the applicable
Settlement Date, that:

 

(a)       Each of the representations and
warranties of the Company as set forth in Section 3 (except for paragraphs (a),
(b), (c), (i), (j), (m), (n), (o) and (p) of such section) of the Underwriting
Agreement dated as of February 7, 2005 relating to the issuance of Equity Units
by the Company (the “Underwriting Agreement”)
among the Company and the Underwriters identified in Schedule 1 thereto, is
true and correct as if made on each of the dates specified above; provided that for purposes of this Section
3(a), (i) any reference in such sections of the Underwriting Agreement to the
“Underwriter” or “Underwriters” or the “Representative” or “Representatives”
shall be deemed to refer to the Remarketing Agent,  (ii) the “Securities” shall 

 

5

 

be deemed to refer to the
Remarketed Senior Notes, (iii) the “Registration Statement”, the “Prospectus”
or the “Preliminary Prospectus” shall be deemed to refer to such terms as
defined herein, (iv) the “First Closing Date” shall be deemed to refer to the
applicable Settlement Date, (v) “this Agreement”, the “Underwriting Agreement”,
“hereof”, “herein” and all references of similar import, shall be deemed to
mean and refer to this Remarketing Agreement and (vi) “the date hereof”, “the
date of this Agreement” and all similar references shall be deemed to refer to
the date of this Remarketing Agreement.

 

(b)       The Registration Statement, if any, in
the form heretofore delivered or to be delivered to the Remarketing Agent, has
been declared effective by the Commission in such form; and no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission.

 

(c)       The documents incorporated by reference
in the Prospectus, if any, when they were filed with the Commission conformed
in all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder (as modified by the letter from
the Commission dated December 21, 2004) and the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission thereunder (the “Trust Indenture Act”), as applicable, and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus or any further amendment or supplement thereto,
when such documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder or the Trust Indenture Act, as applicable, and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information relating to the Remarketing Agent furnished
in writing to the Company by the Remarketing Agent or its counsel expressly for
use in the Prospectus.

 

(d)       On the effective date of the Registration
Statement, the Registration Statement complied in all material respects with
the Securities Act and the rules and regulations of the Commission thereunder
(other than the omission of certain historical and pro forma financial
information relating to Panhandle Eastern Pipe Line Company, L.P.
(“Panhandle”)) and the Trust Indenture Act, and on the date hereof did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and as of the date hereof, the applicable Remarketing
Date and the applicable Settlement Date, the Registration Statement and the
Prospectus will comply in all material respects to the requirements of the
Securities Act, and neither documents, considered together with any Remarketing
Materials related thereto, will contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided
that no representation and warranty is made as to any statement of eligibility
on Form T-1 filed or incorporated by reference as part of the Registration
Statement, the Prospectus or the Remarketing Materials, or as to information
relating to the Remarketing 

 

6

 

Agent contained in or
omitted from the Registration Statement, the Prospectus or the Remarketing
Materials in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent.

 

(e)       This Agreement has been duly authorized,
executed and delivered by the Company.

 

SECTION 4.  Fees.

 

Upon a Successful
Remarketing of the Senior Notes, the Remarketing Agent is entitled to a
remarketing fee (the “Remarketing Fee”) (i) equal to 25 basis points (0.25%) of
(A) if the Reset Date is not the Purchase Contract Settlement Date and the
Remarketed Senior Notes mature on February 16, 2010, the sum of the Remarketing
Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase Price
or (B) if the Reset Date is the Purchase Contract Settlement Date and the
Remarketed Senior Notes mature on February 16, 2010, the aggregate principal
amount of the Remarketed Senior Notes, or (ii) as established by mutual
agreement between the Company and the Remarketing Agent, if the maturity date
of the Remarketed Senior Notes is, in connection with the remarketing and in
accordance with the provisions of the Senior Notes, extended to a date after
February 16, 2010 (which shall not be more than 10 years from the Reset Date).

 

The Remarketing Agent may
deduct the Remarketing Fee from the Proceeds of the Successful Remarketing to
be remitted to the Collateral Agent and the Custodial Agent; provided, however,
that under no circumstances may the Remarketing Agent deduct an amount greater
than the excess of such Proceeds over the Minimum Price.

 

SECTION 5.  Covenants of the
Company.  If and to the extent the Remarketed Senior
Notes are required (in the view of counsel, which need not be in the form of a
written opinion, for either the Remarketing Agent or the Company) to be
registered under the Securities Act as in effect at the time of the
Remarketing, the Company covenants and agrees as follows:

 

(a)       The Company shall prepare the
Registration Statement, the Preliminary Prospectus and the Prospectus, in a
form approved by the Remarketing Agent, shall file any such Preliminary
Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act and shall use its best efforts to cause
the Registration Statement to be declared effective by the Commission prior to
the second Business Day immediately preceding the applicable Three-Day
Remarketing Period.

 

(b)       The Company shall file promptly with the
Commission any amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the reasonable judgment of the
Company or the Remarketing Agent, be required by the Securities Act or
requested by the Commission.

 

(c)       The Company shall file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Remarketed Senior Notes.

 

7

 

(d)       The Company shall advise the Remarketing
Agent promptly, and confirm such advice in writing, (i) when any amendment to
the Registration Statement has been filed or becomes effective, (ii) when any
supplement to the Prospectus or any amendment to the Prospectus has been filed,
(iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of
any comments from the Commission relating to the Registration Statement or any
other request by the Commission for any additional information; (iv) of the
issuance by the Commission of any order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Preliminary
Prospectus or the Prospectus or the initiation or threatening of any proceeding
for any such purpose; and the Company shall use its best efforts to prevent the
issuance of any such order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Preliminary Prospectus or
the Prospectus and, if any such order is issued, will obtain as soon as
possible the withdrawal thereof.

 

(e)       The Company shall furnish promptly to the
Remarketing Agent such copies of the following documents as the Remarketing
Agent shall reasonably request:  (A)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits); (B)
the Preliminary Prospectus and any amended or supplemented Preliminary
Prospectus, (C) the Prospectus and any amended or supplemented Prospectus; and
(D) any document incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if at any time when delivery of a prospectus is required
in connection with the Remarketing, any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act, to notify the Remarketing Agent
and, upon its request, to file such document and to prepare and furnish without
charge to the Remarketing Agent and to any dealer in securities as many copies
as the Remarketing Agent may from time to time reasonably request of an amended
or supplemented Prospectus that will correct such statement or omission or
effect such compliance.

 

(f)        Prior to filing with the Commission (A)
any amendment to the Registration Statement or supplement to the Prospectus or
(B) any Prospectus pursuant to Rule 424 under the Securities Act, the Company
shall furnish a copy thereof to the Remarketing Agent and counsel to the
Remarketing Agent; and shall not file any such amendment or supplement that
shall be reasonably disapproved by the Remarketing Agent promptly after
reasonable notice.

 

(g)       As soon as practicable, but in any event
not later than eighteen months, after the effective date of the Registration
Statement, the Company shall make “generally available to its security holders”
an “earnings statement” of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the rules and
regulations thereunder (including, at the option of the Company, Rule 158 under
the Securities Act).  The terms
“generally available to its security holders” and “earnings statement” shall
have the meanings set forth in Rule 158 under the Securities Act.

 

8

 

(h)       The Company shall take such action as the
Remarketing Agent may reasonably request in order to qualify the Remarketed
Senior Notes for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Remarketing Agent may reasonably request; provided that the Company shall not be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

 

(i)        The Company shall furnish the Remarketing
Agent with such information and documents as the Remarketing Agent may
reasonably request in connection with the transactions contemplated hereby, and
to make reasonably available to the Remarketing Agent and any accountant,
attorney or other advisor retained by the Remarketing Agent such information
that parties would customarily require in connection with a due diligence
investigation conducted in accordance with applicable securities laws and to
cause the Company’s officers, directors, employees and accountants to
participate in all such discussions and to supply all such information
reasonably requested by any such Person in connection with such investigation.

 

SECTION 6.  Payment of Expenses. The Company agrees to pay (a) all costs incident to the preparation and
printing of the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto, (b) all costs
of distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto, (c) any fees
and expenses of qualifying the Remarketed Senior Notes under the securities
laws of the several jurisdictions as provided in Section 5(i) and of preparing,
printing and distributing a Blue Sky Memorandum, if any (including any related
fees and expenses of counsel to the Remarketing Agent), (d) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder and the Remarketing Agent hereunder and (e) the reasonable fees and
expenses of counsel to the Remarketing Agent in connection with their duties
hereunder.

 

SECTION 7.  Conditions to the
Remarketing Agent’s Obligation.  The obligations of the Remarketing Agent
hereunder shall be subject to the following conditions:

 

(a)       The representations and warranties of the
Company contained herein shall be true and correct in all material respects on
and as of the first Remarketing Date of the applicable Three-Day Remarketing
Period and the applicable Settlement Date; and the statements of the Company
and its officers made in any certificates delivered pursuant to this Agreement
shall be true and correct on and as of the applicable Settlement Date.

 

(b)       (i) Trading generally shall not have been
suspended or materially limited on the New York Stock Exchange, (ii) trading of
any securities of the Company shall not have been materially suspended or
limited on the New York Stock Exchange, (iii) a general moratorium on
commercial banking activities in New York shall not have been declared by
either Federal or New York State authorities, (iv) no material disruption has
occurred in commercial banking or securities settlement or clearance services
in the United States or (v) there shall not have occurred a material adverse
change in the financial markets, any outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war or other calamity or crisis, if the effect of any
such event specified in this 

 

9

 

clause (b) in the judgment
of the Remarketing Agent makes it impracticable or inadvisable to proceed with
the Remarketing or the delivery of the Remarketed Senior Notes on the terms and
in the manner contemplated in the Transaction Documents.

 

(c)       Subsequent to the execution and delivery
of this Agreement, no event or condition of a type described in Section 3(e) of
the Underwriting Agreement shall have occurred or shall exist, which event or
condition is not described in the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the Remarketing
Agent makes it impracticable or inadvisable to proceed with the offering, sale
or delivery of the Remarketing Senior Notes on the terms and in the manner
contemplated by this Agreement and the Prospectus.

 

(d)       The Prospectus, if any, shall have been
timely filed with the Commission; no stop order suspending the effectiveness of
the Registration Statement, if any, or of any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion
of additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.

 

(e)       The Company shall have furnished to the
Remarketing Agent a certificate, dated the applicable Settlement Date, of the
chief financial officer or chief accounting officer of the Company and one
additional senior executive officer of the Company who is satisfactory to the
Remarketing Agent stating that: (1) no order suspending the effectiveness of
the Registration Statement, if any, or prohibiting the sale of the Remarketed
Senior Notes is in effect, and no proceedings for such purpose are pending
before or, to the knowledge of such officers, threatened by the Commission; (2)
the representations and warranties of the Company in Section 3 are true and
correct on and as of the applicable Remarketing Date and the Company has
performed in all material respects all covenants and agreements contained
herein to be performed on its part at or prior to such Remarketing Date; and
(3) the Registration Statement, as of the date of the Prospectus, and the
Remarketing Materials, as of their respective dates, did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus did not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

(f)        On the first Remarketing Date of the
applicable Three-Day Remarketing Period and on the applicable Settlement Date,
the Remarketing Agent shall have received letters addressed to the Remarketing
Agent and dated such date, in form and substance reasonably satisfactory to the
Remarketing Agent, of PricewaterhouseCoopers LLP, the independent accountants
of the Company, containing statements and information of the type customarily
included in accountants’ “comfort letters” with respect to the financial
statements and certain financial information contained or incorporated by
reference in the Remarketing Materials; provided
that the letters delivered on the applicable Settlement Date shall use a
“cut-off” date no more than three business days prior to such the applicable
Settlement Date.

 

(g)       (i) Fleischman and Walsh L.L.P., outside
counsel for the Company, shall have furnished to the Remarketing Agent, at the
request of the Company, their written opinion, dated 

 

10

 

the applicable Settlement
Date and addressed to the Remarketing Agent, in form and substance reasonably
satisfactory to the Remarketing Agent, addressing such matters as are set forth
in such counsel’s opinion furnished pursuant to Section 5(g) of the
Underwriting Agreement and (ii) Dennis Morgan, Esq., General Counsel of the
Company, shall have furnished to the Remarketing Agent, at the request of the
Company, his written opinion, dated the applicable Settlement Date, and
addressed to the Remarketing Agent, in form and substance reasonably
satisfactory to the Remarketing Agent, addressing such matters as are set forth
in such counsel’s opinion furnished pursuant to Section 5(g) of the
Underwriting Agreement; in each case, adapted as necessary to relate to the
securities being remarketed hereunder and to the Remarketing Materials, if any,
or to any changed circumstances or events occurring subsequent to the date of
this Agreement, such adaptations being reasonably acceptable to counsel to the
Remarketing Agent.

 

(h)       Davis Polk & Wardwell, counsel for
the Remarketing Agent, shall have furnished to the Remarketing Agent its
opinion, addressed to the Remarketing Agent and dated the applicable Settlement
Date, in form and substance satisfactory to the Remarketing Agent.

 

(i)        Subsequent to the execution and delivery
of this Agreement, (i) no downgrading shall have occurred in the rating
accorded any securities or preferred stock of or guaranteed by the Company or
any of its subsidiaries by any “nationally recognized statistical rating organization”,
as such term is defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act and (ii) no such organization shall have publicly announced
that it has under surveillance or review, or has changed its outlook with
respect to, its rating of any securities or preferred stock of or guaranteed by
the Company or any of its subsidiaries (other than an announcement with
positive implications of a possible upgrading).

 

(j)        No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued
by any federal, state or foreign governmental or regulatory authority that
would, as of the applicable Settlement Date prevent the offer or sale of the
Remarketed Senior Notes; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the applicable
Settlement Date prevent the offer or sale of the Remarketed Senior Notes.

 

(k)       The Senior Notes shall not have been
called for redemption following the occurrence of a Tax Event.

 

(l)        The Remarketing Agent shall have
received on and as of the applicable Settlement Date satisfactory evidence of
the good standing of the Company and the Subsidiaries (as defined in the
opinion of counsel for the Company set forth on Annex A-1 attached to the
Underwriting Agreement) in their respective jurisdictions of organization and
their good standing as foreign entities in such other jurisdictions as the
Remarketing Agent may reasonably request, in each case in writing or any standard
form of telecommunication from the appropriate governmental authorities of such
jurisdictions.

 

(m)      On or prior to the applicable Settlement
Date, the Company shall have furnished to the Remarketing Agent such further
certificates and documents as the Remarketing Agent may reasonably request.

 

11

 

All opinions, letters,
certificates and evidence mentioned above or elsewhere in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the Remarketing
Agent.

 

If any condition specified
in this Section 7 is not satisfied when and as required to be satisfied, this
Agreement may be terminated by the Remarketing Agent by notice to the Company
at any time on or prior to the applicable Remarketing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 6, Section 8 and Section 9 shall at all times be effective and
shall survive such termination.

 

SECTION 8.  Indemnification.

 

(a)       The Company agrees to indemnify and hold
harmless the Remarketing Agent, its officers and employees, and each person, if
any, who controls the Remarketing Agent within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which the Remarketing
Agent or such controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof
as contemplated below) is related to, arises out of or is based on (i) the
failure to have an effective Registration Statement under the Securities Act
relating to the Remarketing of Remarketed Senior Notes, if required, or the
failure to satisfy the prospectus delivery requirements of the Securities Act
but only if the Company failed to provide the Remarketing Agent with a
Prospectus for delivery; or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), including any information deemed to be a part
thereof under the Securities Act, or the omission or alleged omission therefrom
of a material fact, in each case, required to be stated therein or necessary to
make the statements therein not misleading; or (iii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Prospectus or any other Remarketing Materials (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact, in each case, necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
or (iv) in whole or in part, any inaccuracy in the representations and
warranties of the Company contained herein; or (v) in whole or in part, any
failure of the Company to perform its obligations hereunder or under law; or
(vi) any act or failure to act or any alleged act or failure to act by the
Remarketing Agent in connection with, or relating in any manner to, the
Remarketed Senior Notes or the Remarketing contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based on any matter covered by clause (ii) or (iii)
above, and to reimburse the Remarketing Agent and each such controlling person
for any and all expenses (including the fees and disbursements of counsel
chosen by the Remarketing Agent) as such expenses are reasonably incurred by
the Remarketing Agent or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided,
however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance 

 

12

 

upon and in conformity with
written information furnished to the Company by the Remarketing Agent expressly
for use in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any other Remarketing Materials (or any amendment or supplement thereto);
and provided, further, that with respect to any untrue
statement or omission of a material fact made in any Preliminary Prospectus,
the foregoing indemnity agreement shall not inure to the benefit of the
Remarketing Agent if the person asserting any loss, claim, damage, liability or
expense purchased Remarketed Senior Notes, or any person controlling the
Remarketing Agent, if copies of the Prospectus were timely delivered to the
Remarketing Agent and a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of the Remarketing Agent to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Remarketed Senior Notes to such person, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or expense.  The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Company may
otherwise have.

 

The Company agrees that no
indemnified party shall have any liability (whether direct or indirect, in contract
or tort or otherwise) to the Company or its respective security holders or
creditors relating to or arising out of the engagement of the Remarketing Agent
pursuant to, or the performance by the Remarketing Agent of services
contemplated by this Agreement, except to the extent that any loss, claim,
damage, liability or expense resulted from the willful misconduct, gross
negligence or bad faith of the Remarketing Agent.

 

(b)       The Remarketing Agent agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, against
any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Remarketing Agent), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based on any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any other Remarketing Materials (or any amendment
or supplement thereto), or arises out of or is based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any other Remarketing
Materials (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the Remarketing
Agent expressly for use therein; and to reimburse the Company, or any such
director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.  The Company hereby acknowledges
that the only information that the Remarketing Agent has furnished to the
Company expressly for use in 

 

13

 

the Registration Statement,
any Preliminary Prospectus, the Prospectus or any other Remarketing Materials
(or any amendment or supplement thereto) is the information set forth in a certificate
to be provided by the Remarketing Agent on or prior to the Remarketing
Date.  The indemnity agreement set forth
in this Section 8(b) shall be in addition to any liabilities that the
Remarketing Agent may otherwise have.

 

(c)       Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not prejudiced as
a proximate result of such failure.  In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of such indemnified party or parties. 
Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (the Remarketing Agent in the case
of Section 8(b)), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

 

(d)       The indemnifying party under this Section
8 shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there is a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. 
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses 

 

14

 

of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.  No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (x) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding and (y) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.

 

SECTION 9.  Contribution.

 

If the indemnification
provided for in Section 8 is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses referred to therein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company, on the
one hand, and the Remarketing Agent, on the other hand, from the Remarketing of
the Remarketed Senior Notes pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and the Remarketing Agent, on the other hand, in connection with
the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.  The relative benefits received by the
Company, on the one hand, and the Remarketing Agent, on the other hand, in
connection with the Remarketing of the Remarketed Senior Notes pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
aggregate principal amount of the Remarketed Senior Notes, and the total
Remarketing Fee actually received by the Remarketing Agent pursuant to Section
4 hereof.  The relative fault of the
Company, on the one hand, and the Remarketing Agent, on the other hand, shall
be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company, on
the one hand, or the Remarketing Agent, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(c), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or
claim.

 

15

 

The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply
if a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for
which notice has been given under Section 8(c) for purposes of indemnification.

 

The Company and the
Remarketing Agent agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in this Section 9.

 

Notwithstanding the
provisions of this Section 9, the Remarketing Agent shall not be required to
contribute any amount in excess of the amount by which the Remarketing Fee
exceeds the amount of any damages which the Remarketing Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.  For purposes of this Section 9, each officer
and employee of the Remarketing Agent and each person, if any, who controls the
Remarketing Agent within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Remarketing Agent, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as the Company.

 

Anything herein to the
contrary notwithstanding, the provisions of this Section 9, and the rights of
the indemnified parties shall be in addition to, and not in limitation of, any
rights or benefits (including, without limitation, rights to indemnification or
contribution) which such parties may have under any other instrument or
agreement.

 

SECTION 10.   Resignation And Removal Of The Remarketing
Agent.

 

JPM Securities or Merrill
Lynch (the “Remarketing Agent Candidates”)
may resign and be discharged from their duties and obligations hereunder, and
the Company may remove any of the Remarketing Agent Candidates, by giving 30
days’ prior written notice, in the case of a resignation, to the Company and the
Depositary and, in the case of a removal, to the removed Remarketing Agent
Candidate and the Depositary; provided,
however, that if only one Remarketing Agent Candidate remains:

 

(a)       such Remarketing Agent Candidate may not
resign without reasonable cause; and

 

(b)       no such resignation nor any such removal
shall become effective until the Company shall have appointed at least one
nationally recognized broker-dealer as successor Remarketing Agent and such
successor Remarketing Agent shall have entered into a remarketing agreement
with the Company, in which it shall have agreed to conduct the Remarketing in
accordance with the Transaction Documents in all material respects.

 

16

 

In any such case, the
Company will use commercially reasonable efforts to appoint a successor
Remarketing Agent and enter into such a remarketing agreement with such person
as soon as reasonably practicable.  The
provisions of Section 8 and Section 9 shall survive the resignation or removal
of any Remarketing Agent Candidate pursuant to this Agreement.

 

SECTION 11.  Dealing in Securities.   The Remarketing Agent, when
acting as a Remarketing Agent or in its individual or any other capacity, may,
to the extent permitted by law, buy, sell, hold and deal in any of the
Remarketed Senior Notes, Corporate Units, Treasury Units or any of the
securities of the Company (together, the “Securities”).  The Remarketing Agent may exercise any vote
or join in any action which any beneficial owner of such Securities may be
entitled to exercise or take pursuant to the Indenture with like effect as if
it did not act in any capacity hereunder. 
The Remarketing Agent, in its individual capacity, either as principal
or agent, may also engage in or have an interest in any financial or other
transaction with the Company as freely as if it did not act in any capacity
hereunder.

 

SECTION 12.  Remarketing Agent’s Performance; Duty of Care.
 The duties and obligations of the Remarketing
Agent shall be determined solely by the express provisions of this Agreement
and the Transaction Documents.  No
implied covenants or obligations of or against the Remarketing Agent shall be
read into this Agreement or any of the Transaction Documents.  In the absence of bad faith on the part of
the Remarketing Agent, the Remarketing Agent may conclusively rely upon any
document furnished to it, as to the truth of the statements expressed in any of
such documents.  The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties except as otherwise set forth herein. 
The Remarketing Agent, acting under this Agreement, shall incur no liability
to the Company or to any holder of Remarketed Senior Notes in its individual
capacity or as Remarketing Agent for any action or failure to act, on its part
in connection with a Remarketing or otherwise, except if such liability is
judicially determined to have resulted from its failure to comply with the
material terms of this Agreement or the gross negligence or willful misconduct
on its part.  The provisions of this
Section 12 shall survive the termination of this Agreement and shall survive
the resignation or removal of any Remarketing Agent pursuant to this Agreement.

 

SECTION 13.  Termination.  
This Agreement shall
automatically terminate (i) as to the Remarketing Agent on the effective date
of the resignation or removal of the Remarketing Agent pursuant to Section 10
and (ii) on the earlier of (x) any Tax Event Redemption Date and (y) the
Purchase Contract Settlement Date.  If
this Agreement is terminated pursuant to any of the other provisions hereof,
except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that if this Agreement is terminated by
the Remarketing Agent because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, the Company will reimburse the Remarketing Agent for all of its
out-of-pocket expenses (including the fees and disbursements of its counsel)
reasonably incurred by it.  Section 8,
Section 9 and Section 12 hereof shall survive the termination of this Agreement
or the resignation or removal of the Remarketing Agent.

 

SECTION 14.  Notices. 
All statements,
requests, notices and agreements hereunder shall be in writing, and:

 

17

 

(a)       if to the Remarketing Agent Candidates,
shall be delivered or sent by mail, telex or facsimile transmission to:

 

Merrill Lynch, Pierce,
Fenner & Smith

Four World Financial Center, 

North Tower 6th Floor,

New York, NY 10080

Attention: Debt Capital Markets

 

J.P. Morgan Securities Inc.

270 Park Avenue, 8th Floor

New  York, NY 10017

Attention: Investment Grade Syndicate Desk

 

(b)       if to the Company, shall be delivered or
sent by mail, telex or facsimile transmission to Southern Union Company, One
PEI Center, Wilkes-Barre, PA 18711-0601, Telecopier No.: 570-820-2400;
Attention: General Counsel; and

 

(c)       if to the Purchase Contract Agent, shall
be delivered or sent by mail or facsimile transmission to JPMorgan Chase Bank,
N.A., 4 New York Plaza, 15th Floor, New York, NY 10004; Telecopier
No.: 212-623-6167; Attention: Institutional Trust Services.

 

Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.

 

SECTION 15.  Persons Entitled to Benefit of
Agreement.   This
Agreement shall inure to the benefit of and be binding upon each party hereto
and its respective successors.  This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (x) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to
be for the benefit of the Remarketing Agent and the person or persons, if any,
who control the Remarketing Agent within the meaning of Section 15 of the
Securities Act and (y) the indemnity agreement of the Remarketing Agent
contained in Section 8 of this Agreement shall be deemed to be for the benefit
of the Company’s directors and officers who sign the Registration Statement, if
any, and any person controlling the Company within the meaning of Section 15 of
the Securities Act.  Nothing contained in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to herein, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.

 

SECTION 16.  Survival.  The respective indemnities, representations, warranties and agreements
of the Company and the Remarketing Agent contained in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall survive
any Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.

 

SECTION 17.  Governing Law.   This Agreement shall be governed by, and construed in accordance with,
the laws of New York, without regard to conflicts of laws principles.

 

18

 

SECTION 18.  Judicial Proceedings.

 

(a)       Each party hereto expressly accepts and
irrevocably submits to the non-exclusive jurisdiction of the United States
Federal or New York State court sitting in the Borough of Manhattan, The City
of New York, New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Securities. 
To the fullest extent it may effectively do so under applicable law,
each party hereto irrevocably waives and agrees not to assert, by way of
motion, as a defense or otherwise, any claim that it is not subject to the
jurisdiction of any such court, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

 

(b)       Each party hereto agrees, to the fullest
extent that it may effectively do so under applicable law, that a judgment in
any suit, action or proceeding of the nature referred to in Section 18(a)
brought in any such court shall be conclusive and binding upon such party,
subject to rights of appeal and may be enforced in the courts of the United
States of America or the State of New York (or any other court the jurisdiction
to which the Company is or may be subject) by a suit upon such judgment.

 

SECTION
19.  Counterparts.   This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute
one and the same instrument.

 

SECTION 20.  Headings. 
The headings herein
are inserted for convenience of reference only and are not intended to be part
of, or to affect the meaning or interpretation of, this Agreement.

 

SECTION 21.  Severability.  If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any
particular case in any or all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule or public policy or for any other
reason, then, to the extent permitted by law, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.

 

SECTION 22.  Amendments. 
This Agreement may be
amended by an instrument in writing signed by the parties hereto.  The Company agrees that it will not enter
into, cause or permit any amendment or modification of the Transaction
Documents or any other instruments or agreements relating to the Senior Notes
or the Corporate Units that would in any way adversely affect the rights,
duties or obligations of any of JPM Securities or Merrill Lynch, each as a
potential Remarketing Agent, without the prior written consent of JPM
Securities and Merrill Lynch.

 

SECTION 23.  Successors and Assigns.  The rights and obligations of the Company hereunder may not be assigned
or delegated to any other Person without the prior written consent of JPM
Securities and Merrill Lynch.  The rights
and obligations of the Remarketing Agent 

 

19

 

hereunder may not be
assigned or delegated to any other Person (other than an affiliate of the
Remarketing Agent) without the prior written consent of the Company.

 

If the foregoing correctly
sets forth the agreement by and between the Company, the Remarketing Agent
Candidates and the Purchase Contract Agent, please indicate your acceptance in
the space provided for that purpose below.

 

20

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SOUTHERN UNION COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  CONFIRMED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  J.P. MORGAN SECURITIES
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MERRILL LYNCH, PIERCE,
  FENNER & SMITH

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  
	
  not individually but
  solely as Purchase Contract Agent

  and as attorney-in-fact for the Holders of the Purchase Contracts

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]