EXHIBIT 4.2
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KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
ISSUER
AND
JPMORGAN CHASE BANK
TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 21, 2002
7.750% SENIOR UNSECURED NOTES DUE 2012
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First Supplemental Indenture
TABLE OF CONTENTS
PAGE
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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. Limitation on Aggregate Principal 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
First Supplemental Indenture
FIRST SUPPLEMENTAL INDENTURE, dated as of February 21, 2002 (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, 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.
First Supplemental 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.
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First Supplemental Indenture
"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 by that
Person in the holder of any of those Equity Interests, and (iv) any other
payment by that Person 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 (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 of America
Securities LLC or Xxxxxxx Xxxxx Xxxxxx Inc., 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.
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First Supplemental Indenture
"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;
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First Supplemental Indenture
(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.
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First Supplemental Indenture
"REFERENCE TREASURY DEALER" means each of Banc of America
Securities LLC and Xxxxxxx Xxxxx Xxxxxx Inc., 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 of America Securities LLC or Xxxxxxx Xxxxx Barney Inc. 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 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
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First Supplemental Indenture
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 7.750% Senior
Unsecured Notes due 2012 (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. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT.
The aggregate principal amount of the Notes shall be limited to
$250,000,000.
SECTION 2.03. STATED MATURITY.
The Notes may be issued on any Business Day on or after February 21,
2002, and the Stated Maturity of the Notes shall be February 15, 2012.
SECTION 2.04. INTEREST AND INTEREST RATES.
The rate of interest on each Note shall be 7.750% per annum, accruing
from February 21, 2002 and interest shall be payable, semi-annually in arrears,
on February 15 and August 15, of each year (each such date, an "INTEREST PAYMENT
DATE"), commencing August 15, 2002, to the Persons in whose names the Notes are
registered at the close of business on the immediately preceding February 1 and
August 1, 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
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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 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 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
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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
set forth in Article 3 hereof are applicable to the Notes. The additional
covenants 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 100% of their principal amount.
SECTION 2.13. CUSIP NUMBER.
The Cusip Number for the Notes is 484168 AA 7.
ARTICLE 3
COVENANTS
SECTION 3.01. LIMITATIONS ON LIENS.
So long as 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
-9- First Supplemental Indenture
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
-10- First Supplemental Indenture
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
-11- First Supplemental Indenture
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;
-12- First Supplemental Indenture
(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;
-13- First Supplemental Indenture
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.
-14- First Supplemental Indenture
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-1) thereof:
(h-1) 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.
-15- First Supplemental Indenture
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]
-16- First Supplemental Indenture
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/ XXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President, Treasurer
and Secretary
JPMORGAN CHASE BANK
By /s/ XXXXX X. XXXXX
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Officer
-17- First Supplemental Indenture
EXHIBIT A
[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.
______% SENIOR UNSECURED NOTES DUE 2012
NO. U.S.$___________
CUSIP No.
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 _________________, 2012, and to pay
interest thereon from _________________, 2002, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on ________________ and _____________ ____ in each year, commencing
_________________, 2002, at the rate of ______% per annum, until the principal
hereof is paid or made available for payment, and at a rate of _____% 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
A-1 First Supplemental Indenture
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 _________________ or
__________________ (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.
A-2 First Supplemental Indenture
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 AND AUTHORIZATION
This is one of the Notes referred to in the within-mentioned Indenture.
----------------------------------------
As Trustee
By:
-------------------------------------
Authorized Officer
Date: , 20
----------------------------- --
A-3 First Supplemental Indenture
[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 __________________,
200__ (the "ORIGINAL INDENTURE"), as supplemented by the First Supplemental
Indenture dated as of _______________, 20____ (the "SUPPLEMENTAL INDENTURE", and
together with the Original Indenture, the "INDENTURE"), between the Company and
___________________, 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 limited in aggregate principal amount to U.S.
$_____________.
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 ________ 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.
A-4 First Supplemental Indenture
"INDEPENDENT INVESTMENT BANKER" means either Banc of America
Securities LLC or Xxxxxxx Xxxxx Xxxxxx Inc., 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 of America
Securities LLC and Xxxxxxx Xxxxx Barney Inc., 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 of America Securities LLC or Xxxxxxx Xxxxx Xxxxxx Inc. 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
A-5 First Supplemental Indenture
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
A-6 First Supplemental Indenture
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 -
A-7 First Supplemental Indenture
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.]
A-8 First Supplemental Indenture
