Attached files
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EX-1.1 - EX-1.1 - ENTERPRISE PRODUCTS PARTNERS L.P. | h84159exv1w1.htm |
EX-99.1 - EX-99.1 - ENTERPRISE PRODUCTS PARTNERS L.P. | h84159exv99w1.htm |
8-K - FORM 8-K - ENTERPRISE PRODUCTS PARTNERS L.P. | h84159e8vk.htm |
Exhibit 99.2
DESCRIPTION
OF THE NOTES
We have summarized below certain material terms and
provisions of the notes. This summary is not a complete
description of all of the terms and provisions of the notes. You
should read carefully the section entitled Description of
Debt Securities in the accompanying prospectus for a
description of other material terms of the notes, the Guarantee
and the Base Indenture (defined below). For more information, we
refer you to the notes, the Base Indenture and the Supplemental
Indenture (defined below), all of which are available from us.
We urge you to read the Base Indenture and the Supplemental
Indenture because they, and not this description, define your
rights as an owner of the notes.
The 2022 notes and the 2042 notes will each constitute a
separate new series of debt securities that will be issued under
the Indenture dated as of October 4, 2004, as amended by
the Tenth Supplemental Indenture (which we refer to as the
Base Indenture), as supplemented by the Twenty-First
Supplemental Indenture with respect to the 2022 notes and the
2042 notes, to be dated the date of delivery of the notes (which
supplemental indenture we refer to as the Supplemental
Indenture and, together with the Base Indenture, as the
Indenture), among Enterprise Products Operating LLC
(successor to Enterprise Products Operating L.P.), as issuer
(which we refer to as the Issuer), Enterprise
Products Partners L.P., as parent guarantor, any subsidiary
guarantors party thereto (which we refer to as the
Subsidiary Guarantors) and Wells Fargo Bank,
National Association, as trustee (which we refer to as the
Trustee). References in this section to the
Guarantee refer to the Parent Guarantors
Guarantee of payments on the notes.
In addition to these new series of notes, as of June 30,
2011, there were outstanding under the above-referenced Base
Indenture (i) $650 million in aggregate principal
amount of 5.600% senior notes G due 2014,
(ii) $350 million in aggregate principal amount of
6.650% senior notes H due 2034,
(iii) $250 million in aggregate principal amount of
5.00% senior notes I due 2015,
(iv) $250 million in aggregate principal amount of
5.75% senior notes J due 2035,
(v) $800 million in aggregate principal amount of
6.30% senior notes L due 2017,
(vi) $400 million in aggregate principal amount of
5.65% senior notes M due 2013,
(vii) $700 million in aggregate principal amount of
6.50% senior notes N due 2019,
(viii) $500 million in aggregate principal amount of
9.75% senior notes O due 2014,
(ix) $500 million in aggregate principal amount of
4.60% senior notes P due 2012,
(x) $500 million in aggregate principal amount of
5.25% senior notes Q due 2020,
(xi) $600 million in aggregate principal amount of
6.125% senior notes R due 2039,
(xii) $490.5 million in aggregate principal amount of
7.625% senior notes S due 2012,
(xiii) $182.5 million in aggregate principal amount of
6.125% senior notes T due 2013,
(xiv) $237.6 million in aggregate principal amount of
5.90% senior notes U due 2013,
(xv) $349.7 million in aggregate principal amount of
6.65% senior notes V due 2018,
(xvi) $399.6 million in aggregate principal amount of
7.55% senior notes W due 2038,
(xvii) $400 million in aggregate principal amount of
3.70% senior notes X due 2015,
(xviii) $1,000 million in aggregate principal amount
of 5.20% senior notes Y due 2020,
(xix) $600.0 million in aggregate principal amount of
6.45% senior notes Z due 2040,
(xx) $750 million in aggregate principal amount of
3.20% senior notes AA due 2016,
(xxi) $750 million in aggregate principal amount of
5.95% senior notes BB due 2041,
(xxii) $550 million in aggregate principal amount of
8.375% fixed/floating rate junior subordinated notes A due
2066, (xxiii) $682.7 million in aggregate principal
amount of 7.034% fixed/floating rate junior subordinated
notes B due 2068, and (xxiv) $285.8 million in
aggregate principal amount of 7.000% fixed/floating rate junior
subordinated notes C due 2067.
General
The Notes. The notes:
| will be general unsecured, senior obligations of the Issuer; | |
| will constitute two new series of debt securities issued under the Indenture and will be initially limited to $650 million aggregate principal amount of 2022 notes and $600 million aggregate principal amount of 2042 notes; | |
| with respect to the 2022 notes, will mature on February 15, 2022, and with respect to the 2042 notes, will mature on February 15, 2042; |
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| will be issued in denominations of $1,000 and integral multiples of $1,000; | |
| initially will be issued only in book-entry form represented by one or more notes in global form registered in the name of Cede & Co., as nominee of DTC, or such other name as may be requested by an authorized representative of DTC, and deposited with the Trustee as custodian for DTC; and | |
| will be fully and unconditionally guaranteed on an unsecured, unsubordinated basis by the Parent Guarantor, and in certain circumstances may be guaranteed in the future on the same basis by one or more Subsidiary Guarantors. |
Interest. Interest on the notes will:
| with respect to the 2022 notes, accrue at the rate of 4.05% per annum, and with respect to the 2042 notes, accrue at the rate of 5.70% per annum, in each case from the date of issuance (August 24, 2011 with respect to both the 2022 notes and the 2042 notes) or the most recent interest payment date; | |
| with respect to the 2022 notes, be payable in cash semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2012, and with respect to the 2042 notes, be payable in cash semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2012; | |
| with respect to the 2022 notes, be payable to holders of record on the February 1 and August 1 immediately preceding the related interest payment dates, and with respect to the 2042 notes, be payable to holders of record on the February 1 and August 1 immediately preceding the related interest payment dates; and | |
| be computed on the basis of a 360-day year consisting of twelve 30-day months. |
Payment
and Transfer.
Initially, the notes will be issued only in global form.
Beneficial interests in notes in global form will be shown on,
and transfers of interests in notes in global form will be made
only through, records maintained by DTC and its participants.
Notes in definitive form, if any, may be presented for
registration of transfer or exchange at the office or agency
maintained by us for such purpose (which initially will be the
corporate trust office of the Trustee located at 45 Broadway,
14th Floor, New York, New York 10006).
Payment of principal, premium, if any, and interest on notes in
global form registered in the name of DTCs nominee will be
made in immediately available funds to DTCs nominee, as
the registered holder of such global notes. If any of the notes
is no longer represented by a global note, payment of interest
on the notes in definitive form may, at our option, be made at
the corporate trust office of the Trustee indicated above or by
check mailed directly to holders at their respective registered
addresses or by wire transfer to an account designated by a
holder.
If any interest payment date, maturity date or redemption date
falls on a day that is not a business day, the payment will be
made on the next business day with the same force and effect as
if made on the relevant interest payment date, maturity date or
redemption date. No interest will accrue for the period from and
after the applicable interest payment date, maturity date or
redemption date.
No service charge will be made for any registration of transfer
or exchange of notes, but we may require payment of a sum
sufficient to cover any transfer tax or other governmental
charge payable in connection therewith. We are not required to
register the transfer of or exchange any note selected for
redemption or for a period of 15 days before mailing a
notice of redemption of notes of the same series.
The registered holder of a note will be treated as the owner of
it for all purposes, and all references in this
Description of the Notes to holders mean
holders of record, unless otherwise indicated.
Investors may hold interests in the notes outside the United
States through Euroclear or Clearstream if they are participants
in those systems, or indirectly through organizations which are
participants in those
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systems. Euroclear and Clearstream will hold interests on behalf
of their participants through customers securities
accounts in Euroclears and Clearstreams names on the
books of their respective depositaries which in turn will hold
such positions in customers securities accounts in the
names of the nominees of the depositaries on the books of DTC.
All securities in Euroclear or Clearstream are held on a
fungible basis without attribution of specific certificates to
specific securities clearance accounts.
Transfers of notes by persons holding through Euroclear or
Clearstream participants will be effected through DTC, in
accordance with DTCs rules, on behalf of the relevant
European international clearing system by its depositaries;
however, such transactions will require delivery of exercise
instructions to the relevant European international clearing
system by the participant in such system in accordance with its
rules and procedures and within its established deadlines
(European time). The relevant European international clearing
system will, if the exercise meets its requirements, deliver
instructions to its depositaries to take action to effect
exercise of the notes on its behalf by delivering notes through
DTC and receiving payment in accordance with its normal
procedures for
next-day
funds settlement. Payments with respect to the notes held
through Euroclear or Clearstream will be credited to the cash
accounts of Euroclear participants in accordance with the
relevant systems rules and procedures, to the extent
received by its depositaries.
Replacement
of Notes.
We will replace any mutilated, destroyed, stolen or lost notes
at the expense of the holder upon surrender of the mutilated
notes to the Trustee or evidence of destruction, loss or theft
of a note satisfactory to us and the Trustee.
In the case of a destroyed, lost or stolen note, we may require
an indemnity satisfactory to the Trustee and to us before a
replacement note will be issued.
Further
Issuances
We may from time to time, without notice or the consent of the
holders of the notes of either series, create and issue further
notes of the same series ranking equally and ratably with the
original notes in all respects (or in all respects except for
the payment of interest accruing prior to the issue date of such
further notes, the public offering price and the issue date), so
that such further notes form a single series with the original
notes of that series and have the same terms as to status,
redemption or otherwise as the original notes of that series.
Optional
Redemption
Each series of notes will be redeemable, at our option, at any
time in whole, or from time to time in part, at a price equal to
the greater of:
| 100% of the principal amount of the notes to be redeemed; or | |
| the sum of the present values of the remaining scheduled payments of principal and interest (at the rate in effect on the date of calculation of the redemption price) on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption (the Redemption Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 30 basis points for the 2022 notes and 35 basis points for the 2042 notes; | |
| plus, in either case, accrued interest to the Redemption Date. |
The actual redemption price, calculated as provided below, will
be calculated and certified to the Trustee and us by the
Independent Investment Banker.
Notes called for redemption become due on the
Redemption Date. Notices of optional redemption will be
mailed at least 30 but not more than 60 days before the
Redemption Date to each holder of the notes to be redeemed
at its registered address. The notice of optional redemption for
the notes will state, among other things, the amount of notes to
be redeemed, the Redemption Date, the method of calculating
the redemption
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price and each place that payment will be made upon presentation
and surrender of notes to be redeemed. If less than all of the
notes of either series are redeemed at any time, the Trustee
will select the notes to be redeemed on a pro rata basis or by
any other method the Trustee deems fair and appropriate. Unless
we default in payment of the redemption price, interest will
cease to accrue on the Redemption Date with respect to any
notes called for optional redemption.
For purposes of determining the optional redemption price, the
following definitions are applicable:
Treasury Yield means, with respect to any
Redemption Date applicable to the notes, the rate per annum
equal to the semi-annual equivalent yield to maturity (computed
as of the third business day immediately preceding such
Redemption Date) of the Comparable Treasury Issue, assuming
a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the applicable
Comparable Treasury Price for such Redemption Date.
Comparable Treasury Issue means the United States
Treasury security selected by the Independent Investment Banker
as having a maturity comparable to the remaining term of the
notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the notes to be redeemed;
provided, however, that if no maturity is within three
months before or after the maturity date for such notes, yields
for the two published maturities most closely corresponding to
such United States Treasury security will be determined and the
treasury rate will be interpolated or extrapolated from those
yields on a straight line basis rounding to the nearest month.
Independent Investment Banker means any of Barclays
Capital Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Citigroup Global Markets Inc., Mizuho Securities
USA Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo
Securities, LLC, and their respective successors or, if no such
firm is willing and able to select the applicable Comparable
Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee and reasonably
acceptable to the Issuer.
Comparable Treasury Price means, with respect to any
Redemption Date, (a) the average of the Reference
Treasury Dealer Quotations for the Redemption Date, after
excluding the highest and lowest Reference Treasury Dealer
Quotations, or (b) if the Independent Investment Banker
obtains fewer than six Reference Treasury Dealer Quotations, the
average of all such quotations.
Reference Treasury Dealer means each of Barclays
Capital Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Citigroup Global Markets Inc., Mizuho Securities
USA Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo
Securities, LLC, so long as it is a Primary Treasury Dealer at
the relevant time and, if it is not then a Primary Treasury
Dealer, then a Primary Treasury Dealer selected by it, and in
each case their respective successors (each, a Primary
Treasury Dealer); provided, however, that if any of
the foregoing shall not be a Primary Treasury Dealer at such
time and shall fail to select a Primary Treasury Dealer, then
the Issuer will substitute therefor another Primary Treasury
Dealer.
Reference Treasury Dealer Quotations means, with
respect to each Reference Treasury Dealer and any
Redemption Date for the notes, an average, as determined by
an Independent Investment Banker, of the bid and asked prices
for the Comparable Treasury Issue for the notes (expressed in
each case as a percentage of its principal amount) quoted in
writing to an Independent Investment Banker by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the
third business day preceding such Redemption Date.
Ranking
The notes will be unsecured, unless we are required to secure
them pursuant to the limitations on liens covenant described in
the accompanying prospectus under Description of Debt
Securities Certain Covenants Limitations
on Liens. The notes will also be the unsubordinated
obligations of the Issuer and will rank equally with all other
existing and future unsubordinated indebtedness of the Issuer.
Each guarantee of the notes will be an unsecured and
unsubordinated obligation of the Guarantor and will rank equally
with all other existing and future unsubordinated indebtedness
of the Guarantor. The notes and each guarantee will effectively
rank junior to any future indebtedness of the Issuer and the
Guarantor that is both secured and
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unsubordinated to the extent of the assets securing such
indebtedness, and the notes will effectively rank junior to all
indebtedness and other liabilities of the Issuers
subsidiaries that are not Subsidiary Guarantors.
On an as adjusted basis giving effect to this offering and the
use of proceeds therefrom at June 30, 2011, the Issuer had
approximately $15.6 billion principal amount of
consolidated indebtedness, including $12.8 billion in
senior notes and $1.5 billion of junior subordinated notes,
outstanding under the Base Indenture and a similar indenture,
and the Parent Guarantor had no indebtedness (excluding
guarantees totaling $14.4 billion), in each case excluding
intercompany loans. Please read Capitalization.
Parent
Guarantee
The Parent Guarantor will fully and unconditionally guarantee to
each holder and the Trustee, on an unsecured and unsubordinated
basis, the full and prompt payment of principal of, premium, if
any, and interest on the notes, when and as the same become due
and payable, whether at stated maturity, upon redemption, by
declaration of acceleration or otherwise.
Potential
Guarantee of Notes by Subsidiaries
Initially, the notes will not be guaranteed by any of our
Subsidiaries. In the future, however, if our Subsidiaries become
guarantors or co-obligors of our Funded Debt (as defined below),
then these Subsidiaries will jointly and severally, fully and
unconditionally, guarantee our payment obligations under the
notes. We refer to any such Subsidiaries as Subsidiary
Guarantors and sometimes to such guarantees as
Subsidiary Guarantees. Each Subsidiary Guarantor
will execute a supplement to the Indenture to effect its
guarantee.
The obligations of each Guarantor under its guarantee of the
notes will be limited to the maximum amount that will not result
in the obligations of the Guarantor under the guarantee
constituting a fraudulent conveyance or fraudulent transfer
under federal or state law, after giving effect to:
| all other contingent and fixed liabilities of the Guarantor; and | |
| any collection from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its guarantee. |
Funded Debt means all Indebtedness maturing one year
or more from the date of the creation thereof, all Indebtedness
directly or indirectly renewable or extendible, at the option of
the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the
date of the creation thereof, and all Indebtedness under a
revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of one year or more.
Addition
and Release of Subsidiary Guarantors
The guarantee of any Guarantor may be released under certain
circumstances. If we exercise our legal or covenant defeasance
option with respect to notes of either series as described in
the accompanying prospectus under Description of Debt
Securities Defeasance and Discharge, then any
guarantee will be released with respect to that series. Further,
if no Default has occurred and is continuing under the
Indenture, a Subsidiary Guarantor will be unconditionally
released and discharged from its guarantee:
| automatically upon any sale, exchange or transfer, whether by way of merger or otherwise, to any person that is not our affiliate, of all of the Parent Guarantors direct or indirect limited partnership or other equity interests in the Subsidiary Guarantor; | |
| automatically upon the merger of the Subsidiary Guarantor into us or any other Guarantor or the liquidation and dissolution of the Subsidiary Guarantor; or |
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| following delivery of a written notice by us to the Trustee, upon the release of all guarantees or other obligations of the Subsidiary Guarantor with respect to any Funded Debt of ours, except the notes and any other series of debt securities issued under the Indenture. |
If at any time following any release of a Subsidiary Guarantor
from its initial guarantee of the notes pursuant to the third
bullet point in the preceding paragraph, the Subsidiary
Guarantor again guarantees or co-issues any of our Funded Debt
(other than our obligations under the Indenture), then the
Parent Guarantor will cause the Subsidiary Guarantor to again
guarantee the notes in accordance with the Indenture.
No
Sinking Fund
We are not required to make mandatory redemption or sinking fund
payments with respect to the notes.
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DESCRIPTION
OF DEBT SECURITIES
In this Description of Debt Securities references to the
Issuer mean only Enterprise Products Operating LLC
(successor to Enterprise Products Operating L.P.) and not its
subsidiaries. References to the Guarantor mean only
Enterprise Products Partners L.P. and not its subsidiaries.
References to we and us mean the Issuer
and the Guarantor collectively.
The debt securities will be issued under an Indenture dated as
of October 4, 2004, as amended by the Tenth Supplemental
Indenture, dated as of June 30, 2007, and as further
amended by one or more additional supplemental indentures
(collectively, the Indenture), among the Issuer, the
Guarantor, and Wells Fargo Bank, National Association, as
trustee (the Trustee). The terms of the debt
securities will include those expressly set forth in the
Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (the
Trust Indenture Act). Capitalized terms used in
this Description of Debt Securities have the meanings specified
in the Indenture.
This Description of Debt Securities is intended to be a useful
overview of the material provisions of the debt securities and
the Indenture. Since this Description of Debt Securities is only
a summary, you should refer to the Indenture for a complete
description of our obligations and your rights.
General
The Indenture does not limit the amount of debt securities that
may be issued thereunder. Debt securities may be issued under
the Indenture from time to time in separate series, each up to
the aggregate amount authorized for such series. The debt
securities will be general obligations of the Issuer and the
Guarantor and may be subordinated to Senior Indebtedness of the
Issuer and the Guarantor. See
Subordination.
A prospectus supplement and a supplemental indenture (or a
resolution of our Board of Directors and accompanying
officers certificate) relating to any series of debt
securities being offered will include specific terms relating to
the offering. These terms will include some or all of the
following:
| the form and title of the debt securities; | |
| the total principal amount of the debt securities; | |
| the portion of the principal amount which will be payable if the maturity of the debt securities is accelerated; | |
| the currency or currency unit in which the debt securities will be paid, if not U.S. dollars; | |
| any right we may have to defer payments of interest by extending the dates payments are due whether interest on those deferred amounts will be payable as well; | |
| the dates on which the principal of the debt securities will be payable; | |
| the interest rate which the debt securities will bear and the interest payment dates for the debt securities; | |
| any optional redemption provisions; | |
| any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities; | |
| any changes to or additional Events of Default or covenants; | |
| whether the debt securities are to be issued as Registered Securities or Bearer Securities or both; and any special provisions for Bearer Securities; | |
| the subordination, if any, of the debt securities and any changes to the subordination provisions of the Indenture; and | |
| any other terms of the debt securities. |
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The prospectus supplement will also describe any material United
States federal income tax consequences or other special
considerations applicable to the applicable series of debt
securities, including those applicable to:
| Bearer Securities; | |
| debt securities with respect to which payments of principal, premium or interest are determined with reference to an index or formula, including changes in prices of particular securities, currencies or commodities; | |
| debt securities with respect to which principal, premium or interest is payable in a foreign or composite currency; | |
| debt securities that are issued at a discount below their stated principal amount, bearing no interest or interest at a rate that at the time of issuance is below market rates; and | |
| variable rate debt securities that are exchangeable for fixed rate debt securities. |
At our option, we may make interest payments, by check mailed to
the registered holders thereof or, if so stated in the
applicable prospectus supplement, at the option of a holder by
wire transfer to an account designated by the holder. Except as
otherwise provided in the applicable prospectus supplement, no
payment on a Bearer Security will be made by mail to an address
in the United States or by wire transfer to an account in the
United States.
Registered Securities may be transferred or exchanged, and they
may be presented for payment, at the office of the Trustee or
the Trustees agent in New York City indicated in the
applicable prospectus supplement, subject to the limitations
provided in the Indenture, without the payment of any service
charge, other than any applicable tax or governmental charge.
Bearer Securities will be transferable only by delivery.
Provisions with respect to the exchange of Bearer Securities
will be described in the applicable prospectus supplement.
Any funds we pay to a paying agent for the payment of amounts
due on any debt securities that remain unclaimed for two years
will be returned to us, and the holders of the debt securities
must thereafter look only to us for payment thereof.
Guarantee
The Guarantor will unconditionally guarantee to each holder and
the Trustee the full and prompt payment of principal of,
premium, if any, and interest on the debt securities, when and
as the same become due and payable, whether at maturity, upon
redemption or repurchase, by declaration of acceleration or
otherwise.
Certain
Covenants
Except as set forth below or as may be provided in a prospectus
supplement and supplemental indenture, neither the Issuer nor
the Guarantor is restricted by the Indenture from incurring any
type of indebtedness or other obligation, from paying dividends
or making distributions on its partnership interests or capital
stock or purchasing or redeeming its partnership interests or
capital stock. The Indenture does not require the maintenance of
any financial ratios or specified levels of net worth or
liquidity. In addition, the Indenture does not contain any
provisions that would require the Issuer to repurchase or redeem
or otherwise modify the terms of any of the debt securities upon
a change in control or other events involving the Issuer which
may adversely affect the creditworthiness of the debt securities.
Limitations on Liens. The Indenture provides
that the Guarantor will not, nor will it permit any Subsidiary
to, create, assume, incur or suffer to exist any mortgage, lien,
security interest, pledge, charge or other encumbrance
(liens) other than Permitted Liens (as defined
below) upon any Principal Property (as defined below) or upon
any shares of capital stock of any Subsidiary owning or leasing,
either directly or through ownership in another Subsidiary, any
Principal Property (a Restricted Subsidiary),
whether owned or leased on the date of the Indenture or
thereafter acquired, to secure any indebtedness for borrowed
money
8
(debt) of the Guarantor or the Issuer or any other
person (other than the debt securities), without in any such
case making effective provision whereby all of the debt
securities outstanding shall be secured equally and ratably
with, or prior to, such debt so long as such debt shall be so
secured.
In the Indenture, the term Consolidated Net Tangible
Assets means, at any date of determination, the total
amount of assets of the Guarantor and its consolidated
subsidiaries after deducting therefrom:
(1) all current liabilities (excluding (A) any current
liabilities that by their terms are extendable or renewable at
the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is
being computed, and (B) current maturities of long-term
debt); and
(2) the value (net of any applicable reserves) of all
goodwill, trade names, trademarks, patents and other like
intangible assets, all as set forth, or on a pro forma basis
would be set forth, on the consolidated balance sheet of the
Guarantor and its consolidated subsidiaries for the
Guarantors most recently completed fiscal quarter,
prepared in accordance with generally accepted accounting
principles.
Permitted Liens means:
(1) liens upon rights-of-way for pipeline purposes;
(2) any statutory or governmental lien or lien arising by
operation of law, or any mechanics, repairmens,
materialmens, suppliers, carriers,
landlords, warehousemens or similar lien incurred in
the ordinary course of business which is not yet due or which is
being contested in good faith by appropriate proceedings and any
undetermined lien which is incidental to construction,
development, improvement or repair; or any right reserved to, or
vested in, any municipality or public authority by the terms of
any right, power, franchise, grant, license, permit or by any
provision of law, to purchase or recapture or to designate a
purchaser of, any property;
(3) liens for taxes and assessments which are (a) for
the then current year, (b) not at the time delinquent, or
(c) delinquent but the validity or amount of which is being
contested at the time by the Guarantor or any Subsidiary in good
faith by appropriate proceedings;
(4) liens of, or to secure performance of, leases, other
than capital leases; or any lien securing industrial
development, pollution control or similar revenue bonds;
(5) any lien upon property or assets acquired or sold by
the Guarantor or any Subsidiary resulting from the exercise of
any rights arising out of defaults on receivables;
(6) any lien in favor of the Guarantor or any Subsidiary;
or any lien upon any property or assets of the Guarantor or any
Subsidiary in existence on the date of the execution and
delivery of the Indenture;
(7) any lien in favor of the United States of America or
any state thereof, or any department, agency or instrumentality
or political subdivision of the United States of America or any
state thereof, to secure partial, progress, advance, or other
payments pursuant to any contract or statute, or any debt
incurred by the Guarantor or any Subsidiary 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;
(8) any lien incurred in the ordinary course of business in
connection with workmens compensation, unemployment
insurance, temporary disability, social security, retiree health
or similar laws or regulations or to secure obligations imposed
by statute or governmental regulations;
(9) liens in favor of any person to secure obligations
under provisions of any letters of credit, bank guarantees,
bonds or surety obligations required or requested by any
governmental authority in connection with any contract or
statute; or any lien upon or deposits of any assets to secure
performance of bids, trade contracts, leases or statutory
obligations;
(10) any lien upon any property or assets created at the
time of acquisition of such property or assets by the Guarantor
or any Subsidiary or within one year after such time to secure
all or a portion of the purchase price for such property or
assets or debt incurred to finance such purchase price, whether
such debt was incurred prior to, at the time of or within one
year after the date of such acquisition; or
9
any lien upon any property or assets to secure all or part of
the cost of construction, development, repair or improvements
thereon or to secure 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;
(11) any lien upon any property or assets existing thereon
at the time of the acquisition thereof by the Guarantor or any
Subsidiary and any lien upon any property or assets of a person
existing thereon at the time such person becomes a Subsidiary by
acquisition, merger or otherwise; provided that, in each case,
such lien only encumbers the property or assets so acquired or
owned by such person at the time such person becomes a
Subsidiary;
(12) liens imposed by law or order as a result of any
proceeding before any court or regulatory body that is being
contested in good faith, and liens which secure a judgment or
other court-ordered award or settlement as to which the
Guarantor or the applicable Subsidiary has not exhausted its
appellate rights;
(13) any extension, renewal, refinancing, refunding or
replacement (or successive extensions, renewals, refinancing,
refunding or replacements) of liens, in whole or in part,
referred to in clauses (1) through (12) above;
provided, however, that any such extension, renewal,
refinancing, refunding or replacement lien shall be limited to
the property or assets covered by the lien extended, renewed,
refinanced, refunded or replaced and that the obligations
secured by any such extension, renewal, refinancing, refunding
or replacement lien shall be in an amount not greater than the
amount of the obligations secured by the lien extended, renewed,
refinanced, refunded or replaced and any expenses of the
Guarantor and its Subsidiaries (including any premium) incurred
in connection with such extension, renewal, refinancing,
refunding or replacement; or
(14) any lien resulting from the deposit of moneys or
evidence of indebtedness in trust for the purpose of defeasing
debt of the Guarantor or any Subsidiary.
Principal Property means, whether owned or
leased on the date of the Indenture or thereafter acquired:
(1) any pipeline assets of the Guarantor or any Subsidiary,
including any related facilities employed in the transportation,
distribution, storage or marketing of refined petroleum
products, natural gas liquids, and petrochemicals, that are
located in the United States of America or any territory or
political subdivision thereof; and
(2) any processing or manufacturing plant or terminal owned
or leased by the Guarantor or any Subsidiary that is located in
the United States or any territory or political subdivision
thereof,
except, in the case of either of the foregoing clauses (1)
or (2):
(a) any such assets consisting of inventories, furniture,
office fixtures and equipment (including data processing
equipment), vehicles and equipment used on, or useful with,
vehicles; and
(b) any such assets, plant or terminal which, in the
opinion of the board of directors of the general partner of the
Issuer, is not material in relation to the activities of the
Issuer or of the Guarantor and its Subsidiaries taken as a whole.
Subsidiary means:
(1) the Issuer; or
(2) any corporation, association or other business entity
of which more than 50% of the total voting power of the equity
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof or any partnership of which more than 50% of
the partners equity interests (considering all
partners equity interests as a single class) is, in each
case, at the time owned or controlled, directly or indirectly,
by the Guarantor, the Issuer or one or more of the other
Subsidiaries of the Guarantor or the Issuer or combination
thereof.
Notwithstanding the preceding, under the Indenture, the
Guarantor may, and may permit any Subsidiary to, create, assume,
incur, or suffer to exist any lien (other than a Permitted Lien)
upon any Principal Property
10
or capital stock of a Restricted Subsidiary to secure debt of
the Guarantor, the Issuer or any other person (other than the
debt securities), without securing the debt securities, provided
that the aggregate principal amount of all debt then outstanding
secured by such lien and all similar liens, together with all
Attributable Indebtedness from Sale-Leaseback Transactions
(excluding Sale-Leaseback Transactions permitted by
clauses (1) through (4), inclusive, of the first paragraph
of the restriction on sale-leasebacks covenant described below)
does not exceed 10% of Consolidated Net Tangible Assets.
Restriction on Sale-Leasebacks. The Indenture
provides that the Guarantor will not, and will not permit any
Subsidiary to, engage in the sale or transfer by the Guarantor
or any Subsidiary of any Principal Property to a person (other
than the Issuer or a Subsidiary) and the taking back by the
Guarantor or any Subsidiary, as the case may be, of a lease of
such Principal Property (a Sale-Leaseback
Transaction), unless:
(1) such Sale-Leaseback Transaction occurs within one year
from the date of completion of the acquisition of the Principal
Property subject thereto or the date of the completion of
construction, development or substantial repair or improvement,
or commencement of full operations on such Principal Property,
whichever is later;
(2) the Sale-Leaseback Transaction involves a lease for a
period, including renewals, of not more than three years;
(3) the Guarantor or such Subsidiary would be entitled to
incur debt secured by a lien on the Principal Property subject
thereto in a principal amount equal to or exceeding the
Attributable Indebtedness from such Sale-Leaseback Transaction
without equally and ratably securing the debt securities; or
(4) the Guarantor or such Subsidiary, within a one-year
period after such Sale-Leaseback Transaction, applies or causes
to be applied an amount not less than the Attributable
Indebtedness from such Sale-Leaseback Transaction to
(a) the prepayment, repayment, redemption, reduction or
retirement of any debt of the Guarantor or any Subsidiary that
is not subordinated to the debt securities, or (b) the
expenditure or expenditures for Principal Property used or to be
used in the ordinary course of business of the Guarantor or its
Subsidiaries.
Attributable Indebtedness, when used with respect to
any Sale-Leaseback Transaction, means, as at the time of
determination, the present value (discounted at the rate set
forth or implicit in the terms of the lease included in such
transaction) of the total obligations of the lessee for rental
payments (other than amounts required to be paid on account of
property taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items that do not
constitute payments for property rights) during the remaining
term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended).
In the case of any lease that is terminable by the lessee upon
the payment of a penalty or other termination payment, such
amount shall be the lesser of the amount determined assuming
termination upon the first date such lease may be terminated (in
which case the amount shall also include the amount of the
penalty or termination payment, but no rent shall be considered
as required to be paid under such lease subsequent to the first
date upon which it may be so terminated) or the amount
determined assuming no such termination.
Notwithstanding the preceding, under the Indenture the Guarantor
may, and may permit any Subsidiary to, effect any Sale-Leaseback
Transaction that is not excepted by clauses (1) through
(4), inclusive, of the first paragraph under
Restrictions on Sale-Leasebacks,
provided that the Attributable Indebtedness from such
Sale-Leaseback Transaction, together with the aggregate
principal amount of all other such Attributable Indebtedness
deemed to be outstanding in respect of all Sale-Leaseback
Transactions and all outstanding debt (other than the debt
securities) secured by liens (other than Permitted Liens) upon
Principal Properties or upon capital stock of any Restricted
Subsidiary, do not exceed 10% of Consolidated Net Tangible
Assets.
Merger, Consolidation or Sale of Assets. The
Indenture provides that each of the Guarantor and the Issuer
may, without the consent of the holders of any of the debt
securities, consolidate with or sell, lease,
11
convey all or substantially all of its assets to, or merge with
or into, any partnership, limited liability company or
corporation if:
(1) the entity surviving any such consolidation or merger
or to which such assets shall have been transferred (the
successor) is either the Guarantor or the Issuer, as
applicable, or the successor is a domestic partnership, limited
liability company or corporation and expressly assumes all the
Guarantors or the Issuers, as the case may be,
obligations and liabilities under the Indenture and the debt
securities (in the case of the Issuer) and the Guarantee (in the
case of the Guarantor);
(2) immediately after giving effect to the transaction no
Default or Event of Default has occurred and is
continuing; and
(3) the Issuer and the Guarantor have delivered to the
Trustee an officers certificate and an opinion of counsel,
each stating that such consolidation, merger or transfer
complies with the Indenture.
The successor will be substituted for the Guarantor or the
Issuer, as the case may be, in the Indenture with the same
effect as if it had been an original party to the Indenture.
Thereafter, the successor may exercise the rights and powers of
the Guarantor or the Issuer, as the case may be, under the
Indenture, in its name or in its own name. If the Guarantor or
the Issuer sells or transfers all or substantially all of its
assets, it will be released from all liabilities and obligations
under the Indenture and under the debt securities (in the case
of the Issuer) and the Guarantee (in the case of the Guarantor)
except that no such release will occur in the case of a lease of
all or substantially all of its assets.
Events of
Default
Each of the following will be an Event of Default under the
Indenture with respect to a series of debt securities:
(1) default in any payment of interest on any debt
securities of that series when due, continued for 30 days;
(2) default in the payment of principal of or premium, if
any, on any debt securities of that series when due at its
stated maturity, upon optional redemption, upon declaration or
otherwise;
(3) failure by the Guarantor or the Issuer to comply for
60 days after notice with its other agreements contained in
the Indenture;
(4) certain events of bankruptcy, insolvency or
reorganization of the Issuer or the Guarantor (the
bankruptcy provisions); or
(5) the Guarantee ceases to be in full force and effect or
is declared null and void in a judicial proceeding or the
Guarantor denies or disaffirms its obligations under the
Indenture or the Guarantee.
However, a default under clause (3) of this paragraph will
not constitute an Event of Default until the Trustee or the
holders of at least 25% in principal amount of the outstanding
debt securities of that series notify the Issuer and the
Guarantor of the default such default is not cured within the
time specified in clause (3) of this paragraph after
receipt of such notice.
An Event of Default for a particular series of debt securities
will not necessarily constitute an Event of Default for any
other series of debt securities that may be issued under the
Indenture. If an Event of Default (other than an Event of
Default described in clause (4) above) occurs and is
continuing, the Trustee by notice to the Issuer, or the holders
of at least 25% in principal amount of the outstanding debt
securities of that series by notice to the Issuer and the
Trustee, may, and the Trustee at the request of such holders
shall, declare the principal of, premium, if any, and accrued
and unpaid interest, if any, on all the debt securities of that
series to be due and payable. Upon such a declaration, such
principal, premium and accrued and unpaid interest will be due
and payable immediately. If an Event of Default described in
clause (4) above occurs and is continuing, the principal
of, premium, if any, and accrued and unpaid interest on all the
debt securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee
or any holders. However, the effect of such provision may be
limited by applicable law. The holders of a majority in
principal
12
amount of the outstanding debt securities of a series may
rescind any such acceleration with respect to the debt
securities of that series and its consequences if rescission
would not conflict with any judgment or decree of a court of
competent jurisdiction and all existing Events of Default with
respect to that series, other than the nonpayment of the
principal of, premium, if any, and interest on the debt
securities of that series that have become due solely by such
declaration of acceleration, have been cured or waived.
Subject to the provisions of the Indenture relating to the
duties of the Trustee, if an Event of Default with respect to a
series of debt securities occurs and is continuing, the Trustee
will be under no obligation to exercise any of the rights or
powers under the Indenture at the request or direction of any of
the holders of debt securities of that series, unless such
holders have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense. Except to
enforce the right to receive payment of principal, premium, if
any, or interest when due, no holder of debt securities of any
series may pursue any remedy with respect to the Indenture or
the debt securities of that series unless:
(1) such holder has previously given the Trustee notice
that an Event of Default with respect to the debt securities of
that series is continuing;
(2) holders of at least 25% in principal amount of the
outstanding debt securities of that series have requested the
Trustee to pursue the remedy;
(3) such holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of
security or indemnity; and
(5) the holders of a majority in principal amount of the
outstanding debt securities of that series have not given the
Trustee a direction that, in the opinion of the Trustee, is
inconsistent with such request within such
60-day
period.
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding debt securities of each
series have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the
Trustee with respect to that series of debt securities. The
Trustee, however, may refuse to follow any direction that
conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other
holder of debt securities of that series or that would involve
the Trustee in personal liability.
The Indenture provides that if a Default (that is, an event that
is, or after notice or the passage of time would be, an Event of
Default) with respect to the debt securities of a particular
series occurs and is continuing and is known to the Trustee, the
Trustee must mail to each holder of debt securities of that
series notice of the Default within 90 days after it
occurs. Except in the case of a Default in the payment of
principal of, premium, if any, or interest on the debt
securities of that series, the Trustee may withhold notice, but
only if and so long as the Trustee in good faith determines that
withholding notice is in the interests of the holders of debt
securities of that series. In addition, the Issuer is required
to deliver to the Trustee, within 120 days after the end of
each fiscal year, an officers certificate as to compliance
with all covenants in the Indenture and indicating whether the
signers thereof know of any Default or Event of Default that
occurred during the previous year. The Issuer also is required
to deliver to the Trustee, within 30 days after the
occurrence thereof, an officers certificate specifying any
Default or Event of Default, its status and what action the
Issuer is taking or proposes to take in respect thereof.
Amendments
and Waivers
Amendments of the Indenture may be made by the Issuer, the
Guarantor and the Trustee with the consent of the holders of a
majority in principal amount of all debt securities of each
series affected thereby then outstanding under the Indenture
(including consents obtained in connection with a tender offer
or exchange
13
offer for the debt securities). However, without the consent of
each holder of outstanding debt securities affected thereby, no
amendment may, among other things:
(1) reduce the percentage in principal amount of debt
securities whose holders must consent to an amendment;
(2) reduce the stated rate of or extend the stated time for
payment of interest on any debt securities;
(3) reduce the principal of or extend the stated maturity
of any debt securities;
(4) reduce the premium payable upon the redemption of any
debt securities or change the time at which any debt securities
may be redeemed;
(5) make any debt securities payable in money other than
that stated in the debt securities;
(6) impair the right of any holder to receive payment of,
premium, if any, principal of and interest on such holders
debt securities on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with
respect to such holders debt securities;
(7) make any change in the amendment provisions which
require each holders consent or in the waiver provisions;
(8) release any security that may have been granted in
respect of the debt securities; or
(9) release the Guarantor or modify the Guarantee in any
manner adverse to the holders.
The holders of a majority in aggregate principal amount of the
outstanding debt securities of each series affected thereby, may
waive compliance by the Issuer and the Guarantor with certain
restrictive covenants on behalf of all holders of debt
securities of such series, including those described under
Certain Covenants Limitations on
Liens and Certain Covenants
Restriction on Sale-Leasebacks. The holders of a majority
in principal amount of the outstanding debt securities of each
series affected thereby, on behalf of all such holders, may
waive any past Default or Event of Default with respect to that
series (including any such waiver obtained in connection with a
tender offer or exchange offer for the debt securities), except
a Default or Event of Default in the payment of principal,
premium or interest or in respect of a provision that under the
Indenture that cannot be amended without the consent of all
holders of the series of debt securities that is affected.
Without the consent of any holder, the Issuer, the Guarantor and
the Trustee may amend the Indenture to:
(1) cure any ambiguity, omission, defect or inconsistency;
(2) provide for the assumption by a successor of the
obligations of the Guarantor or the Issuer under the Indenture;
(3) provide for uncertificated debt securities in addition
to or in place of certificated debt securities (provided that
the uncertificated debt securities are issued in registered form
for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated debt securities are described in
Section 163(f)(2)(B) of the Code);
(4) add or release guarantees by any Subsidiary with
respect to the debt securities, in either case as provided in
the Indenture;
(5) secure the debt securities or a guarantee;
(6) add to the covenants of the Guarantor or the Issuer for
the benefit of the holders or surrender any right or power
conferred upon the Guarantor or the Issuer;
(7) make any change that does not adversely affect the
rights of any holder;
(8) comply with any requirement of the Commission in
connection with the qualification of the Indenture under the
Trust Indenture Act; and
(9) issue any other series of debt securities under the
Indenture.
14
The consent of the holders is not necessary under the Indenture
to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the
proposed amendment. After an amendment requiring consent of the
holders becomes effective, the Issuer is required to mail to the
holders of an affected series a notice briefly describing such
amendment. However, the failure to give such notice to all such
holders, or any defect therein, will not impair or affect the
validity of the amendment.
Defeasance
and Discharge
The Issuer at any time may terminate all its obligations under
the Indenture as they relate to a series of debt securities
(legal defeasance), except for certain obligations,
including those respecting the defeasance trust and obligations
to register the transfer or exchange of the debt securities of
that series, to replace mutilated, destroyed, lost or stolen
debt securities of that series and to maintain a registrar and
paying agent in respect of such debt securities.
The Issuer at any time may terminate its obligations under
covenants described under Certain
Covenants (other than Merger, Consolidation or Sale
of Assets) and the bankruptcy provisions with respect to
the Guarantor, and the Guarantee provision, described under
Events of Default above with respect to
a series of debt securities (covenant defeasance).
The Issuer may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance
option. If the Issuer exercises its legal defeasance option,
payment of the defeased series of debt securities may not be
accelerated because of an Event of Default with respect thereto.
If the Issuer exercises its covenant defeasance option, payment
of the affected series of debt securities may not be accelerated
because of an Event of Default specified in clause (3), (4),
(with respect only to the Guarantor) or (5) under
Events of Default above. If the Issuer
exercises either its legal defeasance option or its covenant
defeasance option, each guarantee will terminate with respect to
the debt securities of the defeased series and any security that
may have been granted with respect to such debt securities will
be released.
In order to exercise either defeasance option, the Issuer must
irrevocably deposit in trust (the defeasance trust)
with the Trustee money, U.S. Government Obligations (as
defined in the Indenture) or a combination thereof for the
payment of principal, premium, if any, and interest on the
relevant series of debt securities to redemption or maturity, as
the case may be, and must comply with certain other conditions,
including delivery to the Trustee of an opinion of counsel
(subject to customary exceptions and exclusions) to the effect
that holders of that series of debt securities will not
recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance and will be subject
to federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if such
defeasance had not occurred. In the case of legal defeasance
only, such opinion of counsel must be based on a ruling of the
Internal Revenue Service (IRS) or other change in
applicable federal income tax law.
In the event of any legal defeasance, holders of the debt
securities of the relevant series would be entitled to look only
to the trust fund for payment of principal of and any premium
and interest on their debt securities until maturity.
Although the amount of money and U.S. Government
Obligations on deposit with the Trustee would be intended to be
sufficient to pay amounts due on the debt securities of a
defeased series at the time of their stated maturity, if the
Issuer exercises its covenant defeasance option for the debt
securities of any series and the debt securities are declared
due and payable because of the occurrence of an Event of
Default, such amount may not be sufficient to pay amounts due on
the debt securities of that series at the time of the
acceleration resulting from such Event of Default. The Issuer
would remain liable for such payments, however.
In addition, the Issuer may discharge all its obligations under
the Indenture with respect to debt securities of any series,
other than its obligation to register the transfer of and
exchange notes of that series, provided that it either:
| delivers all outstanding debt securities of that series to the Trustee for cancellation; or |
15
| all such debt securities not so delivered for cancellation have either become due and payable or will become due and payable at their stated maturity within one year or are called for redemption within one year, and in the case of this bullet point the Issuer has deposited with the Trustee in trust an amount of cash sufficient to pay the entire indebtedness of such debt securities, including interest to the stated maturity or applicable redemption date. |
Subordination
Debt securities of a series may be subordinated to our Senior
Indebtedness, which we define generally to include all notes or
other evidences of indebtedness for money borrowed by the
Issuer, including guarantees, that are not expressly subordinate
or junior in right of payment to any other indebtedness of the
Issuer. Subordinated debt securities and the Guarantors
guarantee thereof will be subordinate in right of payment, to
the extent and in the manner set forth in the Indenture and the
prospectus supplement relating to such series, to the prior
payment of all indebtedness of the Issuer and Guarantor that is
designated as Senior Indebtedness with respect to
the series.
The holders of Senior Indebtedness of the Issuer will receive
payment in full of the Senior Indebtedness before holders of
subordinated debt securities will receive any payment of
principal, premium or interest with respect to the subordinated
debt securities:
| upon any payment of distribution of our assets of the Issuer to its creditors; | |
| upon a total or partial liquidation or dissolution of the Issuer; or | |
| in a bankruptcy, receivership or similar proceeding relating to the Issuer or its property. |
Until the Senior Indebtedness is paid in full, any distribution
to which holders of subordinated debt securities would otherwise
be entitled will be made to the holders of Senior Indebtedness,
except that such holders may receive units representing limited
partner interests and any debt securities that are subordinated
to Senior Indebtedness to at least the same extent as the
subordinated debt securities.
If the Issuer does not pay any principal, premium or interest
with respect to Senior Indebtedness within any applicable grace
period (including at maturity), or any other default on Senior
Indebtedness occurs and the maturity of the Senior Indebtedness
is accelerated in accordance with its terms, the Issuer may not:
| make any payments of principal, premium, if any, or interest with respect to subordinated debt securities; | |
| make any deposit for the purpose of defeasance of the subordinated debt securities; or | |
| repurchase, redeem or otherwise retire any subordinated debt securities, except that in the case of subordinated debt securities that provide for a mandatory sinking fund, we may deliver subordinated debt securities to the Trustee in satisfaction of our sinking fund obligation, |
unless, in either case,
| the default has been cured or waived and the declaration of acceleration has been rescinded; | |
| the Senior Indebtedness has been paid in full in cash; or | |
| the Issuer and the Trustee receive written notice approving the payment from the representatives of each issue of Designated Senior Indebtedness. |
Generally, Designated Senior Indebtedness will
include:
| indebtedness for borrowed money under a bank credit agreement, called Bank Indebtedness; and | |
| any specified issue of Senior Indebtedness of at least $100 million. |
During the continuance of any default, other than a default
described in the immediately preceding paragraph, that may cause
the maturity of any Senior Indebtedness to be accelerated
immediately without further notice, other than any notice
required to effect such acceleration, or the expiration of any
applicable
16
grace periods, the Issuer may not pay the subordinated debt
securities for a period called the Payment Blockage
Period. A Payment Blockage Period will commence on the
receipt by us and the Trustee of written notice of the default,
called a Blockage Notice, from the representative of
any Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period.
The Payment Blockage Period may be terminated before its
expiration:
| by written notice from the person or persons who gave the Blockage Notice; | |
| by repayment in full in cash of the Senior Indebtedness with respect to which the Blockage Notice was given; or | |
| if the default giving rise to the Payment Blockage Period is no longer continuing. |
Unless the holders of Senior Indebtedness shall have accelerated
the maturity of the Senior Indebtedness, we may resume payments
on the subordinated debt securities after the expiration of the
Payment Blockage Period.
Generally, not more than one Blockage Notice may be given in any
period of 360 consecutive days unless the first Blockage Notice
within the
360-day
period is given by holders of Designated Senior Indebtedness,
other than Bank Indebtedness, in which case the representative
of the Bank Indebtedness may give another Blockage Notice within
the period. The total number of days during which any one or
more Payment Blockage Periods are in effect, however, may not
exceed an aggregate of 179 days during any period of 360
consecutive days.
After all Senior Indebtedness is paid in full and until the
subordinated debt securities are paid in full, holders of the
subordinated debt securities shall be subrogated to the rights
of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness.
By reason of the subordination, in the event of insolvency, our
creditors who are holders of Senior Indebtedness, as well as
certain of our general creditors, may recover more, ratably,
than the holders of the subordinated debt securities.
Form and
Denomination
Unless otherwise indicated in a prospectus supplement, the debt
securities of a series will be issued as Registered Securities
in denominations of $1,000 and any integral multiple thereof.
Book-Entry
System
Unless otherwise indicated in a prospectus supplement, we will
issue the debt securities in the form of one or more global
securities in fully registered form initially in the name of
Cede & Co., as nominee of The Depository
Trust Company (DTC), or such other name as may
be requested by an authorized representative of DTC. Unless
otherwise indicated in a prospectus supplement, the global
securities will be deposited with the Trustee as custodian for
DTC and may not be transferred except as a whole by DTC to a
nominee of DTC or by a nominee of DTC to DTC or another nominee
of DTC or by DTC or any nominee to a successor of DTC or a
nominee of such successor.
DTC has advised us as follows:
| DTC is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or the Exchange Act. | |
| DTC holds securities that its participants deposit with DTC and facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited securities, such as transfers and pledges, through electronic computerized book-entry transfers and pledges between direct participants accounts, thereby eliminating the need for physical movement of securities certificates. |
17
| Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. | |
| DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (DTCC). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. | |
| Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. | |
| The rules applicable to DTC and its direct and indirect participants are on file with the Commission. |
Purchases of debt securities under the DTC system must be made
by or through direct participants, which will receive a credit
for the debt securities on DTCs records. The ownership
interest of each actual purchaser of debt securities is in turn
to be recorded on the direct and indirect participants
records. Beneficial owners of the debt securities will not
receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic
statements of their holdings, from the direct or indirect
participant through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the debt
securities are to be accomplished by entries made on the books
of direct and indirect participants acting on behalf of
beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in the debt
securities, except in the event that use of the book-entry
system for the debt securities is discontinued.
To facilitate subsequent transfers, all debt securities
deposited by direct participants with DTC are registered in the
name of DTCs partnership nominee, Cede & Co., or
such other name as may be requested by an authorized
representative of DTC. The deposit of debt securities with DTC
and their registration in the name of Cede & Co. or
such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners
of the debt securities; DTCs records reflect only the
identity of the direct participants to whose accounts such debt
securities are credited, which may or may not be the beneficial
owners. The direct and indirect participants will remain
responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by DTC to direct
participants, by, direct participants to indirect participants,
and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede & Co. (nor any other DTC nominee)
will consent or vote with respect to the global securities.
Under its usual procedures, DTC mails an omnibus proxy to the
issuer as soon as possible after the record date. The omnibus
proxy assigns Cede & Co.s consenting or voting
rights to those direct participants to whose accounts the debt
securities are credited on the record date (identified in the
listing attached to the omnibus proxy).
All payments on the global securities will be made to
Cede & Co., as holder of record, or such other nominee
as may be requested by an authorized representative of DTC.
DTCs practice is to credit direct participants
accounts upon DTCs receipt of funds and corresponding
detail information from us or the Trustee on payment dates in
accordance with their respective holdings shown on DTCs
records. Payments by participants to beneficial owners will be
governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in
bearer form or registered in street name, and will
be the responsibility of such participant and not of DTC, us or
the Trustee, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal,
premium, if any, and interest to Cede & Co. (or such
other nominee as may be requested by an authorized
representative of DTC) shall be the responsibility of us or the
Trustee. Disbursement of such payments to direct participants
shall be the responsibility of DTC, and disbursement of such
payments to the beneficial owners shall be the responsibility of
direct and indirect participants.
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DTC may discontinue providing its service as securities
depositary with respect to the debt securities at any time by
giving reasonable notice to us or the Trustee. In addition, we
may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary).
Under such circumstances, in the event that a successor
securities depositary is not obtained, note certificates in
fully registered form are required to be printed and delivered
to beneficial owners of the global securities representing such
debt securities.
Neither we nor the Trustee will have any responsibility or
obligation to direct or indirect participants, or the persons
for whom they act as nominees, with respect to the accuracy of
the records of DTC, its nominee or any participant with respect
to any ownership interest in the debt securities, or payments
to, or the providing of notice to participants or beneficial
owners.
So long as the debt securities are in DTCs book-entry
system, secondary market trading activity in the debt securities
will settle in immediately available funds. All payments on the
debt securities issued as global securities will be made by us
in immediately available funds.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that we believe
to be reliable, but we take no responsibility for the accuracy
thereof.
Limitations
on Issuance of Bearer Securities
The debt securities of a series may be issued as Registered
Securities (which will be registered as to principal and
interest in the register maintained by the registrar for the
debt securities) or Bearer Securities (which will be
transferable only by delivery). If the debt securities are
issuable as Bearer Securities, certain special limitations and
conditions will apply.
In compliance with United States federal income tax laws and
regulations, we and any underwriter, agent or dealer
participating in an offering of Bearer Securities will agree
that, in connection with the original issuance of the Bearer
Securities and during the period ending 40 days after the
issue date, they will not offer, sell or deliver any such Bearer
Securities, directly or indirectly, to a United States Person
(as defined below) or to any person within the United States,
except to the extent permitted under United States Treasury
regulations.
Bearer Securities will bear a legend to the following effect:
Any United States person who holds this obligation will be
subject to limitations under the United States federal income
tax laws, including the limitations provided in
Sections 165(j) and 1287(a) of the Internal Revenue
Code. The sections referred to in the legend provide that,
with certain exceptions, a United States taxpayer who holds
Bearer Securities will not be allowed to deduct any loss with
respect to, and will not be eligible for capital gain treatment
with respect to any gain realized on the sale, exchange,
redemption or other disposition of, the Bearer Securities.
For this purpose, United States includes the United
States of America and its possessions, and United States
person means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in
or under the laws of the United States, or an estate or trust
the income of which is subject to United States federal income
taxation regardless of its source.
Pending the availability of a definitive global security or
individual Bearer Securities, as the case may be, debt
securities that are issuable as Bearer Securities may initially
be represented by a single temporary global security, without
interest coupons, to be deposited with a common depositary for
the Euroclear System as operated by Euroclear Bank S.A./N.V.
(Euroclear) and Clearstream Banking S.A.
(Clearstream, formerly Cedelbank), for credit to the
accounts designated by or on behalf of the purchasers thereof.
Following the availability of a definitive global security in
bearer form, without coupons attached, or individual Bearer
Securities and subject to any further limitations described in
the applicable prospectus supplement, the temporary global
security will be exchangeable for interests in the definitive
global security or for the individual Bearer Securities,
respectively, only upon receipt of a Certificate of
Non-U.S. Beneficial
Ownership, which is a certificate to the effect that a
beneficial interest in a temporary global security is owned by a
person that is not a United States Person or is owned by or
through a financial institution in compliance with applicable
United States Treasury regulations. No Bearer Security will be
delivered in or to
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the United States. If so specified in the applicable prospectus
supplement, interest on a temporary global security will be paid
to each of Euroclear and Clearstream with respect to that
portion of the temporary global security held for its account,
but only upon receipt as of the relevant interest payment date
of a Certificate of
Non-U.S. Beneficial
Ownership.
No
Recourse Against General Partner
The Issuers general partner, the Guarantors general
partner and their respective directors, officers, employees and
members, as such, shall have no liability for any obligations of
the Issuer or the Guarantor under the debt securities, the
Indenture or the guarantee or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each
holder by accepting a note waives and releases all such
liability. The waiver and release are part of the consideration
for issuance of the debt securities. Such waiver may not be
effective to waive liabilities under the federal securities
laws, and it is the view of the Commission that such a waiver is
against public policy.
Concerning
the Trustee
The Indenture contains certain limitations on the right of the
Trustee, should it become our creditor, to obtain payment of
claims in certain cases, or to realize for its own account on
certain property received in respect of any such claim as
security or otherwise. The Trustee is permitted to engage in
certain other transactions. However, if it acquires any
conflicting interest within the meaning of the
Trust Indenture Act, it must eliminate the conflict or
resign as Trustee.
The holders of a majority in principal amount of all outstanding
debt securities (or if more than one series of debt securities
under the Indenture is affected thereby, all series so affected,
voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for
exercising any remedy or power available to the Trustee for the
debt securities or all such series so affected.
If an Event of Default occurs and is not cured under the
Indenture and is known to the Trustee, the Trustee shall
exercise such of the rights and powers vested in it by the
Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs. Subject to such
provisions, the Trustee will not be under any obligation to
exercise any of its rights or powers under the Indenture at the
request of any of the holders of debt securities unless they
shall have offered to such Trustee reasonable security and
indemnity.
Wells Fargo Bank, National Association is the Trustee under the
Indenture and has been appointed by the Issuer as Registrar and
Paying Agent with regard to the debt securities. Wells Fargo
Bank, National Association is a lender under the Issuers
credit facilities.
Governing
Law
The Indenture, the debt securities and the guarantee are
governed by, and will be construed in accordance with, the laws
of the State of New York.
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