Exhibit 4.3
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KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
Issuer
and
JPMORGAN CHASE BANK
Trustee
FOURTH SUPPLEMENTAL INDENTURE
Dated as of May 27, 2003
5.875% SENIOR UNSECURED NOTES DUE 2013
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TABLE OF CONTENTS
Page
ARTICLE 1 Relation to Indenture; Definitions................................................1
Section 1.01. Relation to Indenture....................................................1
Section 1.02. Definitions and References...............................................2
Section 1.03. General References.......................................................6
ARTICLE 2 The Series of Securities..........................................................7
Section 2.01. The Form and Title of the Debt Securities................................7
Section 2.02. Amount...................................................................7
Section 2.03. Stated Maturity..........................................................7
Section 2.04. Interest and Interest Rates..............................................7
Section 2.05. Place of Payment.........................................................8
Section 2.06. Optional Redemption......................................................8
Section 2.07. Sinking Fund Obligations.................................................8
Section 2.08. Defeasance and Discharge; Covenant Defeasance............................8
Section 2.09. Global Securities........................................................8
Section 2.10. Registrar................................................................9
Section 2.11. Applicability of Additional Covenants and Definitions to the Notes.......9
Section 2.12. Other Terms: Percentage of Principal Amount.............................9
Section 2.13. Cusip Number.............................................................9
ARTICLE 3 Covenants.........................................................................9
Section 3.01. Limitations on Liens.....................................................9
Section 3.02. Restriction of Sale-Leaseback Transaction...............................11
Section 3.03. Transactions with Affiliates............................................12
Section 3.04. Restricted Payments.....................................................12
Section 3.05. Sale of Assets..........................................................14
Section 3.06. Fundamental Changes.....................................................14
Section 3.07. Waiver of Certain Covenants.............................................14
ARTICLE 4 Events of Default................................................................15
Section 4.01. Modified Event of Default...............................................15
Section 4.02. Additional Event of Default.............................................15
ARTICLE 5 Miscellaneous....................................................................15
Section 5.01. Certain Trustee Matters.................................................15
Section 5.02. Continued Effect........................................................16
Section 5.03. Governing Law...........................................................16
Section 5.04. Counterparts............................................................16
EXHIBITS
Exhibit A: Form of Note
FOURTH SUPPLEMENTAL INDENTURE, dated as of May 27, 2003 (the "Supplemental
Indenture"), between KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the "Company"), having its principal office at 0000 Xxxxx
Xxxxxxx Xxxxxxxxxx, Xxxxxxxxxx, Xxxxx, and JPMORGAN CHASE BANK, a New York
banking corporation ("JPMorgan"), as trustee under the Indenture referred to
below (in such capacity, the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore entered into an Indenture, dated as of
February 21, 2002 (the "Original Indenture"), with JPMorgan, as trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as supplemented by this Supplemental Indenture, is
herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Debt Securities may
at any time be established by the Board of Directors in accordance with the
provisions of the Original Indenture, and the terms of such series may be
established by a supplemental Indenture executed by the Company and the Trustee;
WHEREAS, pursuant to the Original Indenture, as amended and supplemented by
the First Supplemental Indenture dated as of February 21, 2002, between the
Company and the Trustee, the Company issued $250,000,000 aggregate principal
amount of its 7.750% Senior Notes due 2012;
WHEREAS, the Company proposes to create under the Indenture a new series of
Debt Securities;
WHEREAS, additional Debt Securities of other series hereafter established,
except as may be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the Indenture as at
the time supplemented and modified; and
WHEREAS, all acts and things necessary to make the Notes (as herein
defined), when executed by the Company and authenticated and delivered by the
Trustee as provided in the Original Indenture and this Supplemental Indenture,
the valid and binding obligations of the Company and to make this Supplemental
Indenture a valid and binding agreement in accordance with the Original
Indenture have been done or performed;
NOW, THEREFORE, in consideration of the premises, agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree,
for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1 - RELATION TO INDENTURE; DEFINITIONS
Section 1.01. Relation to Indenture.
With respect to the Notes, this Supplemental Indenture constitutes an
integral part of the Indenture.
Section 1.02. Definitions and References.
For all purposes of this Supplemental Indenture, capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned in the
Original Indenture. The following are definitions used in this Supplemental
Indenture:
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of
this definition, the terms "controlling," "controlled by" and "under common
control with" shall have correlative meanings. Notwithstanding the
foregoing, the term "Affiliate" shall not include a Subsidiary of any
specified Person.
"Comparable Treasury Issue" means the United States Treasury security
or securities selected by the Independent Investment Banker as having an
actual or interpolated maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of a comparable maturity to the remaining term of
the Notes.
"Comparable Treasury Price" means, for any redemption date relating to
the Notes, (i) the average of four Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Independent Investment Banker
obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.
"Consolidated Net Tangible Assets" means, at any date of
determination, the aggregate amount of total assets after deducting
therefrom (i) all current liabilities (excluding (A) any current
liabilities that by their terms are extendable or renewable at the option
of the obligor thereon to a time more than 12 months after the time as of
which the amount thereof is being computed, and (B) current maturities of
long-term debt), and (ii) the value (net of any applicable reserves) of all
goodwill, trade names, trademarks, patents and other like intangible
assets, all as set forth on the consolidated balance sheet of the Company
and its consolidated Subsidiaries for the Company's most recently completed
fiscal quarter, prepared in accordance with GAAP.
"Debt" means any obligation created or assumed for the repayment of
money borrowed or indebtedness for the repayment of money borrowed and,
without duplication, any guarantee therefor.
"Disqualified Equity" means, with respect to any Person, any Equity
Interests to the extent that by their terms (or by the terms of any
security into which they are convertible or for which they are
exchangeable) or upon the happening of any event, they mature or are
mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
or are redeemable at the option of the holder thereof, in whole or in part,
on or prior to the date that the Notes mature, except such Equity Interests
that are solely redeemable with, or solely exchangeable for, any Equity
Interests of such Person that are not a Disqualified Equity.
"Distribution" shall mean, with respect to any Equity Interests issued
by a Person (i) the retirement, redemption, purchase or other acquisition
for value of those Equity Interests by such Person, (ii) the declaration or
payment of any dividend or distribution on or with respect to those Equity
Interests by such Person, (iii) any Investment in the holder of any of
those Equity Interests, and (iv) any other payment with respect to those
Equity Interests.
"Equity Interests" shall mean, (i) with respect to a corporation,
shares of capital stock of such corporation or any other interest
convertible or exchangeable into any such interest, (ii) with respect to a
limited liability company, membership interests in such limited liability
company, (iii) with respect to a partnership, partnership interests in such
partnership, and (iv) with respect to any other Person, interests in such
Person analogous to interests described in clauses (i) through (iii).
"Excluded Subsidiary" shall mean any Subsidiary of the Company (i)
that has no Debt other than Permitted Non-Recourse Debt and (ii) the sole
purpose of which is to engage in the acquisition, construction, development
and/or operation activities financed or refinanced with such Permitted
Non-Recourse Debt.
"Funded Debt" means, as applied to the Company or any of its
Subsidiaries, Debt maturing one year or more from the date of the
incurrence, creation or assumption thereof by the Company or any of its
Subsidiaries, Debt directly or indirectly renewable or extendible, at the
option of the obligor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
incurrence, creation or assumption thereof by the Company or any of its
Subsidiaries, and Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year
or more.
"Independent Investment Banker" means either Banc One Capital Markets,
Inc. or BNP Paribas, as specified by the Company, or any successor firm, or
if such firm is unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by the Trustee after consultation with the Company.
"Interest Payment Date" has the meaning assigned in Section 2.04
hereof.
"Investment" shall mean, in respect of any Person, any loan, advance,
extension of credit or capital contribution to that Person, any other
investment in that Person, or any purchase or commitment to purchase any
Equity Interests or Debt issued by that Person or substantially all of the
assets or a division or other business unit of that Person.
"Lien" means, at to any Person, any mortgage, lien, pledge, security
interest or other similar charge or encumbrance.
"Notes" has the meaning assigned in Section 2.01 hereof.
"Pari Passu Debt" means any Funded Debt or Debt of the Company or any
of its Subsidiaries, whether outstanding on the date of original issuance
of the Notes or thereafter created, incurred or assumed, unless, in the
case of any particular Funded Debt or Debt, as the case may be, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Funded Debt or Debt, as the case
may be, shall be subordinated in right of payment to the Notes.
"Permitted Liens" means:
(1) Liens upon rights-of-way for pipeline purposes;
(2) any statutory or governmental Liens or Liens arising by
operation of law, or mechanics', repairmen's, materialmen's,
suppliers', carriers', landlords', warehousemen's or similar Liens
incurred in the ordinary course of business which are not yet due or
which are being contested in good faith by appropriate proceedings;
(3) rights reserved to, or vested in, any municipality or
governmental, statutory or public authority by the terms of any right,
power, franchise, grant, license, lease, permit, or by any provision
of law, to control or regulate, to use, to purchase or recapture, to
designate a purchaser of, to terminate any franchise, grant, license,
lease or permit, or to condemn or expropriate, any property, or zoning
laws, ordinances or municipal regulations;
(4) Liens of taxes and assessments which are (i) for the then
current year, (ii) not at the time delinquent, or (iii) delinquent but
the validity of which are being contested at the time by the Company
or any of its Subsidiaries in good faith by appropriate proceedings;
(5) Liens of, or to secure the payment or performance of, leases,
other than capital leases;
(6) Liens upon, or deposits of, any assets in favor of any surety
company or clerk of court for the purpose of obtaining indemnity or
stay of, or appeal from, judicial proceedings;
(7) any Lien for any judgment, attachment, decree or order of any
governmental or court authority which when combined with other similar
Liens are not in excess of $10,000,000 in the aggregate or any Lien
arising by reason of any attachment, judgment, decree or order of any
governmental or court authority, so long as any proceeding initiated
to review such attachment, judgment, decree or order shall not have
been terminated or the period within which such proceeding may be
initiated shall not expire, or such attachment, judgment, decree or
order shall otherwise be effectively stayed;
(8) Liens upon property or assets acquired or sold by the Company
or any of its Subsidiaries resulting from the exercise of any rights
arising out of defaults on receivables or other sums owed to the
Company or any of its Subsidiaries;
(9) Liens incurred or deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment
insurance, temporary disability, social security, retiree health or
similar laws or regulations or to secure obligations imposed by
statute or governmental regulations;
(10) Liens in favor of the Company or any of its Subsidiaries;
(11) Liens in favor of the United States of America or any other
country or of any State, province, territory or any political
subdivision thereof, or any department, agency or instrumentality or
political subdivision of any of the foregoing, (i) in order to permit
the Company or any of its Subsidiaries to perform any contract or
subcontract made with or at the request of such governmental entity,
securing any partial, progress, advance or other payments pursuant to
any contract or statute, or (ii) to secure any Debt incurred by the
Company or any of its Subsidiaries for the purpose of financing all or
any part of the purchase price of, or the cost of constructing,
developing, repairing or improving, the property or assets subject to
such Lien;
(12) Liens securing industrial development, pollution control or
similar revenue bonds, or Liens created or assumed by the Company or
any Restricted Subsidiary in connection with the issuance of Debt the
interest on which is excludable from gross income of the holder of
such Debt pursuant to the Code for the purpose of financing, in whole
or in part, the acquisition, development or construction of, or repair
or improvement on, property or assets to be used by the Company or any
of its Subsidiaries;
(13) Liens in favor of any Person to secure obligations under the
provisions of any letters of credit, bank guarantees, bonds or surety
obligations required or requested, in the ordinary course of business
by any governmental authority in connection with any contract or
statute;
(14) Liens upon property or assets to secure performance of
tenders, bids, trade or government contracts, leases, statutory
obligations, performance bonds or other similar obligations or to
secure obligations arising under statutory, regulatory, contractual or
warranty requirements;
(15) Easements, rights-of-way, restrictions, exceptions,
reservations, defects and irregularities in title and other similar
charges, claims and encumbrances in any property or assets which do
not, individually or in the aggregate, materially interfere with the
ordinary conduct of the business or businesses of the Company and its
Subsidiaries, taken as a whole; or
(16) Liens arising under joint venture agreements, transportation
or exchange agreements, preferential rights to purchase, and other
agreements arising in the ordinary course of the Company's or any of
its Subsidiaries' business.
"Permitted Non-Recourse Debt" shall mean Debt of any Person that is
non-recourse to the Company or any of its Subsidiaries (other than an
Excluded Subsidiary) and is used by such Person to acquire, construct,
develop and/or operate assets not owned by the Company or any of its
Subsidiaries (other than an Excluded Subsidiary) as of the date hereof or
to refinance Permitted Non-Recourse Debt.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or part of the same Debt as that
evidenced by such particular Debt Security; and for the purpose of this
definition, any Debt Security authenticated and delivered under the
Indenture in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Debt Security shall be deemed to evidence the same Debt as the
mutilated, destroyed, lost or stolen Debt Security.
"Principal Property" means, whether owned or leased on the date of
original issuance of the Notes or thereafter acquired, (i) pipeline assets
of the Company or any of its Subsidiaries, including any related facilities
employed in the transportation, distribution, terminalling, storage or
marketing of refined petroleum products, petroleum products and specialty
liquids which are located in the United States of America or any territory
or political subdivision thereof, and (ii) any processing or manufacturing
plant or terminal owned or leased by the Company or any of its Subsidiaries
which is located within the United States of America or any territory or
political subdivision thereof, except, in the case of either clause (i) or
(ii), (y) any assets consisting of inventories, office fixtures and
equipment (including data processing equipment), vehicles and equipment
used on, or useful with, vehicles, and (z) any such assets, plant or
terminal which, in the opinion of the Board of Directors, is not material
in relation to the activities of the Company and its Subsidiaries, taken as
a whole.
"Reference Treasury Dealer" means each of Banc One Capital Markets,
Inc. and BNP Paribas, plus two additional dealers selected by the Trustee
that are at the time primary U.S. Government securities dealers in New York
City, and their respective successors; provided, if Banc One Capital
Markets, Inc. or BNP Paribas or any primary U.S. Government securities
dealer selected by the Trustee shall cease to be a primary U.S. Government
securities dealer, then such other primary U.S. Government securities
dealers as may be substituted by the Trustee.
"Reference Treasury Dealer Quotations" means, for each Reference
Treasury Dealer and any redemption date relating to the Notes, the average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such redemption date.
"Regular Record Date" has the meaning assigned in Section 2.04 hereof.
"Restricted Payment" has the meaning assigned in Section 3.04 hereof.
"Restricted Subsidiary" means any Subsidiary of the Company which owns
or, as a lessee, leases any Principal Property.
"Right" has the meaning assigned in Section 3.04 hereof.
"Sale-Leaseback Transaction" means the sale or transfer by the Company
or any Restricted Subsidiary of any Principal Property to a Person (other
than the Company or any of its Subsidiaries) and the taking back by the
Company or any such Restricted Subsidiary, as the case may be, of a lease
of such Principal Property.
"Treasury Rate" means, with respect to any redemption date relating to
the Notes, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to
the Comparable Treasury Issue (if no maturity is within three months before
or after the remaining term of the Notes to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date. Any weekly average yields
calculated by interpolation or extrapolation will be ranked to the nearest
1/100th of 1% with any figure of 1/200th of 1% or above being rounded
upward.
Section 1.03. General References.
All references in this Supplemental Indenture to Articles and Sections,
unless otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture; and the term "herein", "hereof", "hereunder" and
any other word of similar import refers to this Supplemental Indenture.
ARTICLE 2 - THE SERIES OF SECURITIES
Section 2.01. The Form and Title of the Debt Securities.
There is hereby established a new series of Debt Securities to be issued
under the Indenture and to be designated as the Company's 5.875% Senior
Unsecured Notes due 2013 (the "Notes"). The Notes shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, the terms, conditions and covenants of the Original
Indenture and this Supplemental Indenture (including the form of Note set forth
as Exhibit A hereto (the terms of which are incorporated in and made a part of
the Supplemental Indenture for all intents and purposes) and the additional
covenants set forth in Article 3 hereof).
The Notes shall be substantially in the form attached as Exhibit A hereto.
The Notes shall be registered in such names, shall be in such amounts and shall
have such other specific terms contemplated in the form of Note attached hereto
as Exhibit A, as shall be communicated by the Company to the Trustee in
accordance with the administrative procedures, as in effect from time to time,
established to provide for the issuance of the Notes.
Section 2.02. Amount.
The Trustee shall authenticate and deliver the Notes for original issue in
an aggregate principal amount of up to $250,000,000 upon the Company's order for
the authentication and delivery of the Notes. The authorized aggregate principal
amount of the Notes may be increased at any time hereafter and the series may be
reopened for issuances of additional Notes, upon the Company's order without the
consent of any Holder. The Notes issued on the date hereof and any such
additional Notes that may be issued hereafter shall be part of the same series
of Debt Securities.
Section 2.03. Stated Maturity.
The Notes may be issued on any Business Day on or after May 27, 2003, and
the Stated Maturity of the Notes shall be June 1, 2013.
Section 2.04. Interest and Interest Rates.
The rate of interest on each Note shall be 5.875% per annum, accruing from
May 27, 2003 and interest shall be payable, semi-annually in arrears, on June 1
and December 1, of each year (each such date, an "Interest Payment Date"),
commencing December 1, 2003, to the Persons in whose names the Notes are
registered at the close of business on the immediately preceding May 15 and
November 15, respectively, whether or not such day is a Business Day (each such
date, a "Regular Record Date"). The amount of interest payable for any period
shall be computed on the basis of twelve 30-day months and a 360-day year. The
amount of interest payable for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the days elapsed in any partial
month. In the event that any date on which interest is payable on a Note is not
a Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as if
made on the date the payment was originally payable. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will be
paid to the Person in whose name such Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date
and shall either (i) be paid to the Person in whose name such Note (or one or
more Predecessor Securities) is registered at the close of business on the
special record date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice of which shall be given to Holders of the Notes not less
than 10 days prior to such special record date, or (ii) be paid at such time in
any other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
traded, and upon such notice as may be required by such exchange or automated
quotation system, all as more fully provided in the Indenture.
Section 2.05. Place of Payment.
The Place of Payment where the Notes may be presented or surrendered for
payment shall at all times be in the city and state of New York and shall
initially be the Corporate Trust Office of the Trustee in the City and State of
New York.
Section 2.06. Optional Redemption.
At its option, the Company may choose to redeem the Notes, as a whole or in
part, in principal amounts of $1,000 or any integral multiple thereof, at any
time or from time to time upon notification to the Holders of the Notes given at
least 30 and not more than 60 days prior to the date fixed for such redemption,
at a redemption price equal to the greater of (i) 100% of the principal amount
of the Notes to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on such Notes, exclusive
of interest accrued to the redemption date therefor, discounted to such
redemption date on a semiannual basis, assuming a 360-day year consisting of
twelve 30-day months, at the Treasury Rate plus 30 basis points, plus, in either
case, accrued and unpaid interest on the principal amount of the Notes being
redeemed to such redemption date; provided that installments of interest on
Notes that are due and payable on any date on or prior to a redemption date
shall be payable to the registered Holders of such Notes (or one or more
Predecessor Securities), registered as such as of the close of business on the
relevant Regular Record Dates. The redemption price shall be calculated and
certified to the Trustee by the Independent Investment Banker; provided that if
the institution so appointed has notified the Trustee in writing at least 15
days prior to the redemption date that it is unwilling or unable to make such
calculation, such calculation shall be made by another Independent Investment
Banker appointed by the Trustee after consultation with the Company and at the
cost and expense of the Company. The notice to the Holders shall state that the
redemption price shall be calculated in accordance with this Section 2.06.
Section 2.07. Sinking Fund Obligations.
The Company has no obligation to redeem or purchase any Notes pursuant to
any sinking fund or analogous requirement or upon the happening of a specified
event or at the option of a Holder thereof.
Section 2.08. Defeasance and Discharge; Covenant Defeasance.
Article 11 of the Original Indenture, including without limitation, Section
11.02(b) thereof, shall apply to the additional covenants set forth in Article 3
hereof and the Notes, and such additional covenants set forth in Article 3
hereof shall be subject to the covenant defeasance option pursuant to Section
11.02(b) of the Original Indenture.
Section 2.09. Global Securities.
The Notes shall initially be issuable in the form of one or more Global
Securities. Such Global Securities (i) shall be deposited with, or on behalf of,
The Depository Trust Company, New York, New York, which shall act as Depositary
with respect to the Notes, (ii) shall bear the legends set forth in the form of
Note attached as Exhibit A hereto, (iii) may be exchanged in whole or in part
for Debt Securities in definitive form upon the terms and subject to the
conditions provided in Section 2.15 of the Original Indenture and (iv) shall
otherwise be subject to the applicable provisions of the Indenture.
Section 2.10. Registrar.
The Trustee shall serve as the initial Registrar.
Section 2.11. Applicability of Additional Covenants and Definitions to the Notes
In addition to the covenants and definitions set forth in the Original
Indenture, the definitions set forth in Section 1.02 hereof and the covenants
and provisions set forth in Article 3 hereof are applicable to the Notes. The
additional covenants and provisions set forth in Article 3 hereof are solely for
the benefit of the Notes and its Holders, and shall not be applicable, in whole
or part, to any other series of Debt Securities unless the instruments
establishing any of them shall so expressly provide, and each such case, as
therein expressly provided.
Section 2.12. Other Terms: Percentage of Principal Amount.
The Notes shall be issued at 99.760% of their principal amount.
Section 2.13. Cusip Number.
The Cusip Number for the Notes is 484168 AC 3.
ARTICLE 3 - COVENANTS
Section 3.01. Limitations on Liens.
If any of the Notes are Outstanding, the Company will not, nor will it
permit any Restricted Subsidiary to, create, assume or incur, except in favor of
the Company or any of its Subsidiaries, any Lien upon any Principal Property or
upon any shares of capital stock or other equity interests of any Restricted
Subsidiary at any time owned by them, to secure any Debt of the Company or any
other Person (other than the Notes issued hereunder), without effectively
providing that all of the Notes Outstanding (together with, if the Company shall
so determine, any other indebtedness or obligation of the Company which is
similarly entitled to be equally and ratably secured) shall be secured equally
and ratably with, or prior to, such Debt so long as such Debt shall be so
secured. The foregoing restriction shall not apply to, or prevent the creation
or existence of, any of the following:
(1) Permitted Liens;
(2) Liens upon any property or assets created at the time of
acquisition of such property or assets by the Company or any of its
Restricted Subsidiaries or within one year after such time, to secure all
or part of the purchase price for such property or assets or Debt incurred
to finance such purchase price, whether such Debt was incurred prior to, at
the time of, or within one year of, such acquisition;
(3) Liens upon any property or assets to secure all or part of the
cost of construction, development, repair or improvements thereon or to
secure Debt incurred prior to, at the time of, or within one year after,
completion of such construction, development, repair or improvements or the
commencement of full operations thereof (whichever is later), to provide
funds for any such purpose;
(4) Liens upon any property or assets existing thereon at the time of
the acquisition thereof by the Company or any of its Restricted
Subsidiaries (whether or not the obligations secured thereby are assumed by
the Company or any of its Restricted Subsidiaries), or the assumption by
the Company or any Restricted Subsidiary of obligations secured by any Lien
that exists at the time of acquisition by the Company or any of its
Restricted Subsidiaries of the property or assets subject to such Lien or
at the time of the acquisition of the Person that owns such property or
assets; provided, however, that any such Lien only encumbers the property
or assets so acquired;
(5) Liens upon any property or assets of a Person existing thereon at
the time (i) such Person becomes a Restricted Subsidiary of the Company,
(ii) such Person is merged with or into, or consolidated with, the Company
or any of its Restricted Subsidiaries or (iii) of a sale, lease or other
disposition of the properties of a Person (or division thereof) as an
entirety or substantially as an entirety to the Company or any of its
Restricted Subsidiaries; provided, however, than any such Lien only
encumbers the property or assets of such Person at the time such Person
becomes a Restricted Subsidiary;
(6) Liens upon any property or assets of the Company or any of its
Restricted Subsidiaries in existence on the date of original issuance of
the Notes or provided for or created pursuant to an "after-acquired
property" clause or similar term in existence on the date of original
issuance of the Notes or any mortgage, pledge agreement, security agreement
or other similar instrument in existence on the date of original issuance
of the Notes;
(7) Liens imposed by law or order as a result of any proceeding before
any court or regulatory body that is being contested in good faith by
appropriate proceedings, and Liens which secure a judgment or other
court-ordered award or settlement as to which the Company or any of its
applicable Restricted Subsidiaries has not exhausted its applicable rights;
(8) Liens upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required
to be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating
a Lien upon such property or assets permitted by clauses (1) through (7)
inclusive, of this Section;
(9) Liens securing Debt of the Company or any of its Restricted
Subsidiaries, all or a portion of the net proceeds of which are used
substantially concurrent with the funding thereof (and for purposes of
determining such "substantial concurrence," taking into consideration,
among other things, required notices to be given to holders of Outstanding
Notes in connection with such refunding, refinancing or repurchase, and the
required corresponding durations thereof), to refinance, refund or
repurchase all Outstanding Notes, including the amount of all accrued
interest thereon and reasonable fees and expenses and premium, if any,
incurred by the Company or any of its Subsidiaries in connection therewith;
(10) Liens resulting from the deposit of moneys, U.S. Government
Obligations or evidence of indebtedness in trust for the purpose of
defeasing Debt of the Company or any of its Restricted Subsidiaries;
(11) any Lien upon any property or assets to secure Debt incurred by
the Company or any of its Restricted Subsidiaries, the proceeds of which,
in whole or part, were used to defease, in a defeasance or a covenant
defeasance, or obligations on any series of the Debt Securities; or
(12) any extension, renewal, refinancing, refunding or replacement (or
successive extensions, renewals, refinancing, refunding or replacements) of
any Lien, in whole or in part, that is referred to in clause (1) through
(11), inclusive, of this Section, or of any Debt secured thereby; provided,
however, than any such extension, renewal, refinancing, refunding or
replacement Lien shall be limited to the property or assets covered by the
Lien extended, renewed, refinanced, refunded or replaced and that the
principal amount secured by any such extension, renewal, refinancing,
refunding or replacement Lien shall be in an amount not greater than the
principal amount of (plus accrued interest on) the obligations secured by
the Lien extended, renewed, refinanced, refunded or replaced plus any
expenses of the Company and its Restricted Subsidiaries (including any
premium) incurred in connection with such extension, renewal, refinancing,
refunding or replacement.
Notwithstanding the foregoing provisions of this Section 3.01, the Company
may, and may permit any Restricted Subsidiary to, create, assume or incur any
Lien upon any Principal Property to secure any Debt of the Company or any other
Person (other than the Notes) that is not excepted by clauses (1) through (12),
inclusive, of this Section 3.01 without securing the Outstanding Notes, provided
that after giving effect to the creation, assumption or incurrence of such Lien
and Debt, and the application of the proceeds of such Debt, if any, received as
a result thereof, the aggregate principal amount of all Debt then outstanding
secured by such Lien and all similar Liens (not including Debt permitted to be
secured under clauses (1) through (12) inclusive, of this Section 3.01),
together with all net sale proceeds received by the Company or any of its
Subsidiaries from Sale-Leaseback Transactions (excluding Sale-Leaseback
Transactions permitted by clauses (1) through (4), inclusive, of the first
paragraph of Section 3.02), would not exceed 10% of Consolidated Net Tangible
Assets.
Section 3.02. Restriction of Sale-Leaseback Transaction.
The Company will not, nor will it permit any Restricted Subsidiary to,
engage in a Sale-Leaseback Transaction, unless:
(1) such Sale-Leaseback Transaction occurs within one year from the
date of completion of the acquisition of the Principal Property subject
thereto or the date of the completion of construction, development of, or
substantial repair or improvement on, or commencement of full operations
of, such Principal Property, whichever is later;
(2) the Sale-Leaseback Transaction involves a lease for a period,
including renewals, of not more than three years;
(3) the Company or such Restricted Subsidiary would be entitled to
incur Debt secured by a Lien on Principal Property subject thereto in a
principal amount equal to or exceeding the net proceeds received by the
Company or such Restricted Subsidiary from such Sale-Leaseback Transaction
without equally and ratably securing the Notes pursuant to Section 3.01; or
(4) the Company or such Restricted Subsidiary, within a one-year
period after such Sale-Leaseback Transaction, applies or causes to be
applied an amount not less than the net sale proceeds from such
Sale-Leaseback Transaction to (i) the prepayment, repayment, reduction,
redemption or retirement of Pari Passu Debt of the Company or any of its
Subsidiaries, or (ii) the expenditure or expenditures for (y) the
acquisition, development or construction of, or repair or improvement on,
Principal Property or (z) capital stock or other equity interests in a
Person that is or with such expenditure becomes a Restricted Subsidiary of
the Company or in a joint venture, and in each case, whose principal assets
consists of Principal Property.
Notwithstanding the foregoing provisions of this Section 3.02, the Company
may, and may permit any Restricted Subsidiary to, effect any Sale-Leaseback
Transaction that is not excepted by clauses (1) through (4), inclusive, of this
Section 3.02, provided that after giving effect thereto and the application of
the proceeds, if any, received as a result thereof, the net sales proceeds
received by the Company or any of its Restricted Subsidiaries from such
Sale-Leaseback Transaction, together with the aggregate principal amount of then
outstanding Debt (other than the Notes) secured by Liens upon Principal Property
not excepted by clauses (1) through (12), inclusive, of Section 3.01, would not
exceed 10% of the Consolidated Net Tangible Assets.
Section 3.03. Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries to, sell,
lease or otherwise transfer any Principal Property to, or purchase, lease or
otherwise acquire any Principal Property from, any of its Affiliates, except (i)
on terms and conditions not less favorable to the Company or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(ii) transactions between or among the Company and its wholly-owned Subsidiaries
not involving any other Affiliates and (iii) any Restricted Payment permitted by
Section 3.04.
Section 3.04. Restricted Payments.
The Company will not, and will not permit its Subsidiaries to, make or
agree to make, directly or indirectly, any Distribution, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any Equity
Interests or Debt subordinated to the Notes, or any options, warrants, or other
rights (each, a "Right") to purchase Equity Interests or such Debt, whether now
or hereafter outstanding (each, a "Restricted Payment"), unless, at the time and
after giving effect to such Restricted Payment, the aggregate amount of the
Restricted Payment together with the aggregate amount of all other Restricted
Payments made by the Company or any of its Subsidiaries after the date of
original issuance of the Notes (excluding Restricted Payments permitted by
clauses (i), (ii), (v), (vi), (vii), (viii) or (ix) of the next succeeding
paragraph), is less than the sum of the aggregate net cash proceeds and the fair
market value of any assets or rights used or useful in a business activity not
prohibited by Section 3.06 which are received by the Company or any of its
Subsidiaries in connection with (i) a capital contribution to the Company from
any Person (other than any of its Subsidiaries) made after the date of the
original issuance of the Notes or a capital contribution to a Subsidiary of the
Company from any Person (other than the Company or another Subsidiary of the
Company) made after the date of the original issuance of the Notes, or (ii) an
issuance and sale made after the issuance date of Equity Interests (other than
Disqualified Equity) of the Company or from the issuance or sale made after the
issuance date of convertible or exchangeable Disqualified Equity or convertible
or exchangeable debt securities of the Company which have been converted into or
exchanged for such Equity Interests (other than Disqualified Equity).
The foregoing provisions shall not prohibit:
(i) Distributions payable by the Company solely in its Equity
Interests;
(ii) Restricted Payments made by any Subsidiary of the Company to the
Company or to another Subsidiary of the Company;
(iii) cash Distributions paid on, and cash redemptions of, the Equity
Interests of the Company made within 60 days after the declaration thereof;
provided that no Default has occurred and is continuing at the time of such
declaration;
(iv) Restricted Payments on, or of, Debt subordinated to the Notes, or
Rights related thereto, provided that no Default has occurred and is
continuing at the time such Restricted Payment is made;
(v) the redemption, repurchase, retirement, defeasance or other
acquisition of any Equity Interests of the Company or any of its
Subsidiaries, or Rights related thereto, in exchange for, or out of the net
cash proceeds of the substantially concurrent sale or issuance (a sale or
issuance will be deemed substantially concurrent if such redemption,
repurchase, retirement or acquisition occurs not more than 90 days after
such sale or issuance) (other than to a Subsidiary of the Company) of,
Equity Interests of the Company (other than any Disqualified Equity),
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other
acquisition, or payments, shall be excluded from clause (ii) of the
preceding paragraph;
(vi) (A) the purchase or other acquisition of one or more Equity
Interests in the Company from former employees or directors of the Company
or any of its Subsidiaries (or any of its or their general partners),
provided that the aggregate price paid for all such purchased or acquired
Equity Interests shall not exceed $2,000,000 in any 12-month period; and
(B) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any of its Subsidiaries held by
any current or former officer, employee or director of the Company or any
of its Subsidiaries (or any of its or their general partners) pursuant to
the terms of any agreements (including employment agreements) and plans
approved by the Board of Directors, including any management equity plan or
stock option plan or any other management or employee benefit plan,
agreement or trust, provided, however, that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests
pursuant to this clause (vi) shall not exceed the sum of (y) $5,000,000 in
any twelve-month period and (z) the aggregate net proceeds received by the
Company during such 12-month period from issuance of such Equity Interests
pursuant to such agreements or plans, provided, however, if the amount so
paid in any calendar year is less than $5,000,000, such shortfall may be
used to repurchase, redeem, acquire or retire such Equity Interests in
either of the next two 12-month periods in addition to the $5,000,000 that
may otherwise be paid in each such 12-month periods;
(vii) repurchases of Equity Interests deemed to occur upon the
cashless exercise of stock options;
(viii) reasonable and customary directors' fees to the members of the
Board of Directors, provided that such fees are consistent with past
practice or current requirements;
(ix) other Restricted Payments in an aggregate principal amount since
the date of original issuance of the Notes not to exceed $50,000,000;
provided, further, that, with respect to clauses (v), (vi), (vii), (viii) and
(ix) above, no Default or Event of Default shall have occurred and be
continuing.
In determining whether any Restricted Payment is permitted by the foregoing
covenant, the Company may allocate or reallocate all or any portion of such
Restricted Payment among the clauses (i) through (ix) of the preceding paragraph
or among such clauses and the first paragraph of this Section 3.04, provided
that at the time of such allocation or reallocation, all such Restricted
Payments, or allocated portions thereof, would be permitted under the various
provisions of the foregoing covenant.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (as determined by the Board of Directors and as evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) on the date of the transfer, incurrence or issuance of
such non-cash Restricted Payment.
Section 3.05. Sale of Assets.
The Company will not, and will not permit any of its Subsidiaries (other
than any Excluded Subsidiary) to, convey, sell, lease, assign, transfer or
otherwise dispose of, any of its Principal Properties (each, a "disposition"),
other than as follows: (i) dispositions of assets in the ordinary course of
business having a fair market value of not more than the greater of (A)
$25,000,000 and (B) 5% of Consolidated Net Tangible Assets in the aggregate
during any fiscal year of the Company; (ii) dispositions of assets, the proceeds
of which are (A) reinvested in other assets (or Persons owning other assets)
used by or useful to the Company or such Subsidiary in conducting its business
that is not prohibited by Section 3.06, (B) used to repay, repurchase, redeem or
defease, in whole or part, Debt, or (C) used to make capital expenditures; (iii)
leases permitted by Section 3.02; (iv) leases of such assets entered into in the
ordinary course of business and with respect to which the Company or any of its
Subsidiaries is the lessor and the lessee has no option to purchase such assets
for less than fair market value at any time the right to acquire such asset
occurs; (v) dispositions between and among the Company and its Subsidiaries,
(vi) any Restricted Payment permitted by Section 3.04; (vii) abandonment or
relinquishment of such assets in the ordinary course of business; and (viii)
dispositions of such assets received in settlement of debts accrued in the
ordinary course of business.
Section 3.06. Fundamental Changes.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business other than businesses of the type (i) conducted by the
Company and its Subsidiaries on the date hereof; (ii) conducted by Statia
Terminals Group N.V. and its Subsidiaries on the date hereof; and (iii)
businesses reasonably related thereto.
Section 3.07. Waiver of Certain Covenants.
The Company may, with respect to the Notes, omit in any particular instance
to comply with any term, provision or condition set forth in any covenant
provided pursuant to Section 3.01, 3.02, 3.03, 3.04, 3.05 or 3.06, if before the
time for such compliance the Holders of at least a majority in aggregate
principal amount of the of all Outstanding Notes (voting as one class) shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
A waiver which changes or eliminates any term, provision or condition of
this Indenture which has expressly been included solely for the benefit of one
or more particular series of Debt Securities, or which modifies the rights of
the Holders of Debt Securities of such series with respect to such term,
provision or condition, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
ARTICLE 4 - EVENTS OF DEFAULT
Section 4.01. Modified Event of Default
With respect to the Notes, the following provision in this Section 4.01
shall preempt, in its entirety, the provision and application of clause (a) of
Section 6.01 of the Original Indenture in relation to the Notes and shall, in
relation to the Notes, replace such clause (a); and for reference to the
Indenture in relation to the Notes, the following clause shall be referred to as
being set forth in Section 6.01(a-1) thereof:
(a-1) the Company defaults for a period of 30 days in the payment when
due of interest on any of the Notes.
Section 4.02. Additional Event of Default
With respect to the Notes, the occurrence of any of the following events
shall, in addition to the other events or circumstances described as Events of
Default at clauses (a) through (g) of Section 6.01 of the Original Indenture,
constitute an Event of Default, and for reference to the Indenture in relation
to the Notes, such events shall be referred to as being set forth in Section
6.01(h-2) thereof:
(h-2) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Debt for money borrowed by the Company or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries, whether such Debt or guarantee now
exists, or is created after the date of the Supplemental Indenture,
which default results in the acceleration of such Debt prior to its
express maturity, and the principal amount of any such Debt, together
with the principal amount of any other such Debt the maturity of which
has been so accelerated, aggregates, without duplication, $5,000,000
or more, and such acceleration shall not have been rescinded, or such
Debt is repaid or otherwise discharged, within a period of 30 days
from the occurrence of such acceleration; provided, that if any such
acceleration is rescinded, or such Debt is repaid or otherwise
discharged, within such period of 30 days, then such Event of Default
and any consequential acceleration of the Notes shall be automatically
rescinded, so long as such rescission does not conflict with any
related judgment or decree;
ARTICLE 5 - MISCELLANEOUS
Section 5.01. Certain Trustee Matters.
The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Supplemental Indenture or the Notes or the proper authorization or the due
execution hereof or thereof by the Company.
Section 5.02. Continued Effect.
Except as expressly supplemented and amended hereby, the Original Indenture
shall continue in full force and effect in accordance with the provisions
thereof, and the Original Indenture, as supplemented and amended hereby, is in
all respects hereby ratified and confirmed. This Supplemental Indenture and all
its provisions shall be deemed a part of the Original Indenture in the manner
and to the extent herein and therein provided.
Section 5.03. Governing Law.
This Supplemental Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York.
Section 5.04. Counterparts.
This instrument may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and delivered, all as of the day and year first
above written.
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: Kaneb Pipe Line Company LLC,
Its General Partner
By: /s/X. X. XXXXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board
and Chief Executive Officer
JPMORGAN CHASE BANK
as Trustee
By: /s/ XXXXX XXXXX
---------------------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Officer
[FORM OF FACE OF NOTE]
[If the Note is a Global Security, insert - THIS NOTE IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF, AND HELD BY, THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF. THIS NOTE IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.08 OF THE ORIGINAL INDENTURE, (ii) THIS GLOBAL SECURITY
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.15 OF THE
ORIGINAL INDENTURE, (iii) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE ORIGINAL INDENTURE AND (iv)
THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION 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.]
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
5.875% SENIOR UNSECURED NOTE DUE 2013
NO. U.S.$___________
CUSIP No. 484168 AC 3
KANEB PIPE LINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
(herein called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ____________, or registered assigns, the principal sum of $_____________
United States Dollars on June 1, 2013, and to pay interest thereon from May 27,
2003, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on June 1 and December 1 in each year,
commencing December 1, 2003, at the rate of 5.875% per annum, until the
principal hereof is paid or made available for payment, and at a rate of 5.875%
per annum on any overdue principal or redemption price, as applicable, and on
any overdue installment of interest. The amount of interest payable for any
period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed on
the basis of a 360-day year of twelve 30-day months and the days elapsed in any
partial month. In the event that any date on which interest is payable on this
Note is not a Business Day, then a payment of the interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay) with the same force and
effect as if made on the date the payment was originally payable. 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 Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be May 15 or
November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and shall either (i) be paid to the Person in whose name this Note
(or one or more Predecessor Securities) is registered at the close of business
on a special record date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice of which shall be given to Holders of Notes not less than
10 days prior to such special record date, or (ii) be paid at such time in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
traded, and upon such notice as may be required by such exchange or automated
quotation system, all as more fully provided in such Indenture.
[If the Note is a Global Security, insert - Payment of the principal or
redemption price (as applicable) of and interest on this Note will be made by
transfer of immediately available funds to a bank account in the City and State
of New York designated by the Holder 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.]
[If the Note is a Definitive Security, insert - Payment of the principal or
redemption price (as applicable) and interest on this Note will be made at the
office or agency of the Company maintained for that purpose in the City and
State of New York or at such other offices or agencies as the Company may
designate, 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, or
subject to any laws or regulations applicable thereto, at the option of the
Company, by United States Dollar check drawn on, or transfer to a United States
Dollar account maintained by the payee with, a bank in the City and State of New
York (so long as the applicable paying agent has received proper transfer
instructions in writing by the Regular Record Date or special record date, as
applicable, prior to the applicable payment date); provided, however, that
payment at maturity will only be made against presentation and surrender of this
Note; and provided, further, that any Holder of this Note who is the Holder of
at least $1.0 million aggregate principal amount of Notes may request to have
any payment of interest on this Note be made by transfer to a United States
Dollar account maintained by the payee with a bank in the United States (so long
as the applicable paying agent has received proper transfer instructions in
writing by the Regular Record Date or special record date, as applicable, prior
to the applicable Interest Payment Date).]
Reference is hereby made to the further provisions of this 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 Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and delivered.
Dated: ______________________
KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P.
By: Kaneb Pipe Line Company LLC,
Its General Partner
By:
---------------------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the Notes referred to in the within-mentioned Indenture.
As Trustee
By:
---------------------------------------------
Authorized Signatory
Date of Authentication: _______________
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized series of Debt Securities of the
Company (the "Notes") issued under an Indenture dated as of February 21, 2002
(the "Original Indenture"), as supplemented by the Fourth Supplemental Indenture
dated as of May 27, 2003 (the "Supplemental Indenture", and together with the
Original Indenture, the "Indenture"), between the Company and JPMorgan Chase
Bank, a New York banking corporation, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
applicable indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Notes and of the terms upon which the Notes are, and are to be, authenticated
and delivered. As provided in the Indenture, the Debt Securities may be issued
in one or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase or analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This Note is one of a series of Debt
Securities designated on the face hereof, which series is not limited in
aggregate principal amount.
At its option, the Company may choose to redeem the Notes, as a whole or in
part, in principal amounts of $1,000 or any integral multiple thereof, at any
time or from time to time upon notification to the Holders of the Notes given at
least 30 and not more than 60 days prior to the date fixed for such redemption,
at a redemption price equal to the greater of (i) 100% of the principal amount
of the Notes to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on such Notes, exclusive
of interest accrued to the redemption date therefor, discounted to such
redemption date on a semiannual basis, assuming a 360-day year consisting of
twelve 30-day months, at the Treasury Rate plus 30 basis points, plus, in either
case, accrued and unpaid interest on the principal amount of the Notes being
redeemed to such redemption date; provided, that installments of interest on
Notes that are due and payable on any date on or prior to a redemption date
shall be payable to the registered Holders of such Notes (or one or more
Predecessor Securities), registered as such as of the close of business on the
relevant Regular Record Dates referred to on the face hereof, all as provided in
the Indenture.
Capitalized terms used herein shall have the meanings specified herein or
in the Indenture, as the case may be.
"Comparable Treasury Issue" means the United States Treasury security
or securities selected by the Independent Investment Banker as having an
actual or interpolated maturity comparable to the remaining term of the
Notes to be redeemed that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of a comparable maturity to the remaining term of
the Notes.
"Comparable Treasury Price" means, for any redemption date relating to
the Notes, (i) the average of four Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Independent Investment Banker
obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.
"Independent Investment Banker" means either Banc One Capital Markets,
Inc. or BNP Paribas, as specified by the Company, or any successor firm, or
if such firm is unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Banc One Capital Markets,
Inc. and BNP Paribas, plus two additional dealers selected by the Trustee
that are at the time primary U.S. Government securities dealers in New York
City, and their respective successors; provided, if Banc One Capital
Markets, Inc. or BNP Paribas or any primary U.S. Government securities
dealer selected by the Trustee shall cease to be a primary U.S. Government
securities dealer, then such other primary U.S. Government securities
dealers as may be substituted by the Trustee.
"Reference Treasury Dealer Quotations" means, for each Reference
Treasury Dealer and any redemption date relating to the Notes, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealers
at 5:00 p.m., New York City time, on the third Business Day preceding such
redemption date.
"Treasury Rate" means with respect to any redemption date relating to
the Notes, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to
the Comparable Treasury Issue (if no maturity is within three months before
or after the remaining term of the Notes to be redeemed, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date. Any weekly average yields
calculated by interpolation or extrapolation will be ranked to the nearest
1/100th of 1% with any figure of 1/200th of 1% or above being rounded
upward.
In the event of redemption of this Note in part only, a new Note or Notes
of like tenor for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes 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 Notes to be affected under the
Indenture at any time by the Company and the Trustee with the consent of not
less than the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of all series to be affected (voting as one class).
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of all affected
series (voting as one class), on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture. The Indenture permits, with certain exceptions as therein provided,
the Holders of a majority in principal amount of Notes then Outstanding to waive
past defaults under the Indenture with respect to the Notes and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any 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 Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal, premium, if any, or
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place(s) and rate, and in the coin or
currency, herein prescribed.
[If the Note is a Global Security, insert - This Global Security or portion
hereof may not be exchanged for Definitive Securities except in the limited
circumstances provided in the Indenture.
The holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]
[If the Note is a Definitive Security, insert - As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Note is registrable in the Debt Security Register, upon surrender of this
Note for registration of transfer at the office or agency of the Company in the
City and State of New York or at such other offices or agencies as the Company
may designate, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debt Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.]
The Notes are issuable only in registered form, without coupons, in
denominations of U.S. $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the Notes
are transferable and exchangeable at the office of the Registrar and any
co-registrar for a like aggregate principal amount of Notes and of like tenor of
a different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or other similar government charge payable in connection with
certain transfers and exchanges.
Prior to due presentment of this 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Obligations of the Company under the Indenture and the Securities
thereunder, including this Note, are non-recourse to Kaneb Pipe Line Company
LLC, a Delaware limited liability company (the "General Partner"), and Kaneb
Pipe Line Partners, L.P., a Delaware limited partnership ("MLP"), and their
respective Affiliates (other than the Company), and payable only out of cash
flow and assets of the Company. The Trustee, and each Holder of a Note by its
acceptance hereof, will be deemed to have agreed in the Indenture that (i)
neither the General Partner nor its assets nor the MLP nor its assets (nor any
of their respective Affiliates other than the Company, nor their respective
assets) shall be liable for any of the obligations of the Company under the
Indenture or such Securities, including this Note, and (ii) no past, present or
future director, officer, partner, employee, incorporator, stockholder, member
or manager or unitholder, as such, of the Company, the Trustee, the General
Partner, the MLP or any Affiliate of any of the foregoing entities or any other
Person an obligor on the Notes, as such, shall have any liability in respect of
any obligations of the Company under the Indenture or such Debt Securities or
for any claim based on, in respect of, or by reason of, such obligation or their
creation. The foregoing agreements by the Trustee and each Holder are part of
the consideration for the issuance of the Notes.
The Indenture contains provisions that relieve the Company from the
obligation to comply with certain restrictive covenants in the Indenture and for
satisfaction and discharge at any time of the entire indebtedness upon
compliance by the Company with certain conditions set forth in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
[If the Note is a Definitive Security, insert as a separate page -
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________ (Please Print or Typewrite Name
and Address of Assignee) the within instrument of KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P., and does hereby irrevocably constitute and appoint
_________________________ Attorney to transfer said instrument on the books of
the within-named Company, with full power of substitution in the premises.
Please Insert Social Security or
Other Identifying Number of Assignee:
Dated:_______________________ (Signature) ___________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]
