SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): JULY 10, 2002
VALERO L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-16417 74-2956831
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number Identification No.)
ONE VALERO PLACE
SAN ANTONIO, TEXAS 78212
(Address of principal executive offices) (Zip Code)
(210) 370-2000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On July 10, 2002, Valero Logistics Operations, L.P., a Delaware limited
partnership (the "Partnership"), a 100%-owned direct and indirect subsidiary of
Valero L.P., a Delaware limited partnership ("Valero L.P."), Valero L.P., Valero
GP, Inc., a Delaware corporation ("GP, Inc."), Riverwalk Logistics, L.P., a
Delaware limited partnership ("Riverwalk") and Valero GP, LLC, a Delaware
limited liability company ("Valero GP, LLC"), entered into an underwriting
agreement with the underwriters named therein, attached as Exhibit 10.1 hereto,
with respect to the issue and sale by the Partnership of $100,000,000 aggregate
principal amount of 6 7/8% Senior Notes due 2012 (the "Senior Notes") in an
underwritten public offering. The Senior Notes are fully and unconditionally
guaranteed by Valero L.P. and were registered under the Securities Act of 1933,
as amended, pursuant to the Partnership's and Valero L.P.'s shelf registration
statement on Form S-3 (File Nos. 333-89978 and 333-89978-01). The closing
respecting the Senior Notes is expected to occur on July 15, 2002.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits.
4.1 Indenture dated July 15, 2002, by and among the
Partnership, Valero L.P. and The Bank of New York, as
trustee.
4.2 First Supplemental Indenture dated July 15, 2002, by and
among the Partnership, Valero L.P. and The Bank of New
York, as trustee.
5.1 Opinion of Andrews & Kurth Mayor, Day & Caldwell L.L.P.
regarding the validity of the securities.
5.2 Consent of Andrews & Kurth Mayor, Day & Caldwell L.L.P.
(included in Exhibit 5.1 hereto).
8.1 Opinion of Andrews & Kurth Mayor, Day & Caldwell L.L.P.
with respect to tax matters
10.1 Underwriting Agreement dated July 10, 2002, by and among
the Partnership, Valero L.P., Riverwalk, GP, Inc. and
Valero GP, LLC and the underwriters named therein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Valero L.P.
By: Riverwalk Logistics, L.P.,
its general partner
By: Valero GP, LLC,
its general partner
Dated: July 15, 2002 By: /s/ Todd Walker
-------------------------------------
Todd Walker
Secretary
EXHIBIT 4.1
================================================================================
VALERO LOGISTICS OPERATIONS, L.P.,
ISSUER
VALERO L.P.,
GUARANTOR
AND
THE BANK OF NEW YORK,
TRUSTEE
----------
INDENTURE
DATED AS OF JULY 15, 2002
----------
SENIOR DEBT SECURITIES
================================================================================
VALERO LOGISTICS OPERATIONS, L.P.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED,
AND INDENTURE, DATED AS OF JULY 15, 2002
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- ------------ -----------------
Section 310 (a) (1) ................................................................................609
(a) (2) ................................................................................609
(a) (3) ................................................................................Not Applicable
(a) (4) ................................................................................Not Applicable
(b) ................................................................................608; 610
Section 311 (a) ................................................................................613
(b) ................................................................................613
Section 312 (a) ................................................................................701; 702
(b) ................................................................................702
(c) ................................................................................702
Section 313 (a) ................................................................................703
(b) ................................................................................*
(c) ................................................................................*
(d) ................................................................................703
Section 314 (a) ................................................................................704
(a) (4) ................................................................................104; 1004
(b) ................................................................................Not Applicable
(c) (1) ................................................................................101
(c) (2) ................................................................................101; 102
(c) (3) ................................................................................Not Applicable
(d) ................................................................................Not Applicable
(e) ................................................................................102
Section 315 (a) ................................................................................601
(b) ................................................................................602
(c) ................................................................................601
(d) ................................................................................601
(e) ................................................................................514
Section 316 (a) ................................................................................101
(a) (1) (A)................................................................................502; 512
(a) (1) (B)................................................................................513
(a) (2) ................................................................................Not Applicable
(b) ................................................................................508
(c) ................................................................................104
Section 317 (a) (1) ................................................................................503
(a) (2) ................................................................................504
(b) ...............................................................................1003
Section 318 (a) ................................................................................107
- ----------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
*Deemed included pursuant to Section 318 (c) of the Trust Indenture Act
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions And Other Provisions Of General Application
SECTION 101. Definitions............................................................................1
SECTION 102. Incorporation by Reference of Trust Indenture Act.....................................11
SECTION 103. Compliance Certificates and Opinions..................................................11
SECTION 104. Form of Documents Delivered to Trustee................................................12
SECTION 105. Acts of Holders; Record Dates.........................................................12
SECTION 106. Notices, Etc., to Trustee, Partnership or Guarantor...................................13
SECTION 107. Notice to Holders; Waiver.............................................................14
SECTION 108. Conflict with Trust Indenture Act.....................................................14
SECTION 109. Effect of Headings and Table of Contents..............................................15
SECTION 110. Successors and Assigns................................................................15
SECTION 111. Separability Clause...................................................................15
SECTION 112. Benefits of Indenture.................................................................15
SECTION 113. Governing Law.........................................................................15
SECTION 114. Legal Holidays........................................................................15
SECTION 115. Securities in a Composite Currency, Currency Unit or Foreign
Currency..............................................................................15
SECTION 116. Judgment Currency.....................................................................16
SECTION 117. Language of Notices, Etc..............................................................17
SECTION 118. Non-Recourse to the General Partner; No Personal Liability
of Officers, Directors, Employees or Partners.........................................17
ARTICLE II Security Forms
SECTION 201. Forms Generally.......................................................................17
SECTION 202. Form of Face of Security..............................................................18
SECTION 203. Form of Reverse of Security...........................................................20
SECTION 204. Global Securities.....................................................................26
SECTION 205. Form of Trustee's Certificate of Authentication.......................................27
ARTICLE III The Securities
SECTION 301. Amount Unlimited; Issuable in Series..................................................27
SECTION 302. Denominations.........................................................................30
SECTION 303. Execution, Authentication, Delivery and Dating........................................30
SECTION 304. Temporary Securities..................................................................32
SECTION 305. Registration, Registration of Transfer and Exchange...................................33
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................................36
SECTION 307. Payment of Interest; Interest Rights Preserved........................................36
SECTION 308. Persons Deemed Owners.................................................................37
SECTION 309. Cancellation..........................................................................38
i
SECTION 310. Computation of Interest...............................................................38
SECTION 311. CUSIP Numbers.........................................................................38
ARTICLE IV Satisfaction And Discharge
SECTION 401. Satisfaction and Discharge of Indenture...............................................39
SECTION 402. Application of Trust Money............................................................40
ARTICLE V Remedies
SECTION 501. Events of Default.....................................................................40
SECTION 502. Acceleration of Maturity; Rescission and Annulment....................................41
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee...............................................................................42
SECTION 504. Trustee May File Proofs of Claim......................................................43
SECTION 505. Trustee May Enforce Claims Without Possession of Securities...........................44
SECTION 506. Application of Money Collected........................................................44
SECTION 507. Limitation on Suits...................................................................44
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest..........................................................................45
SECTION 509. Restoration of Rights and Remedies....................................................45
SECTION 510. Rights and Remedies Cumulative........................................................45
SECTION 511. Delay or Omission Not Waiver..........................................................45
SECTION 512. Control by Holders....................................................................46
SECTION 513. Waiver of Past Defaults...............................................................46
SECTION 514. Undertaking for Costs.................................................................46
SECTION 515. Waiver of Usury, Stay or Extension Laws...............................................47
ARTICLE VI The Trustee
SECTION 601. Certain Duties and Responsibilities...................................................47
SECTION 602. Notice of Defaults....................................................................48
SECTION 603. Certain Rights of Trustee.............................................................48
SECTION 604. Not Responsible for Recitals or Issuance of Securities................................50
SECTION 605. May Hold Securities...................................................................50
SECTION 606. Money Held in Trust...................................................................50
SECTION 607. Compensation and Reimbursement........................................................50
SECTION 608. Disqualification; Conflicting Interests...............................................51
SECTION 609. Corporate Trustee Required; Eligibility...............................................51
SECTION 610. Resignation and Removal; Appointment of Successor.....................................51
SECTION 611. Acceptance of Appointment by Successor................................................53
SECTION 612. Merger, Conversion, Consolidation or Succession to Business...........................54
ii
SECTION 613. Preferential Collection of Claims Against Partnership.................................54
SECTION 614. Appointment of Authenticating Agent...................................................55
ARTICLE VII Holders' Lists And Reports By Trustee And Partnership
SECTION 701. Partnership to Furnish Trustee Names and Addresses of
Holders...............................................................................56
SECTION 702. Preservation of Information; Communications to Holders................................57
SECTION 703. Reports by Trustee....................................................................58
SECTION 704. Reports by Partnership................................................................58
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer Or Lease
SECTION 801. Partnership May Consolidate, Etc., Only on Certain Terms..............................59
SECTION 802. Successor Substituted.................................................................59
ARTICLE IX Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders....................................60
SECTION 902. Supplemental Indentures with Consent of Holders.......................................61
SECTION 903. Execution of Supplemental Indentures..................................................62
SECTION 904. Effect of Supplemental Indentures.....................................................63
SECTION 905. Conformity with Trust Indenture Act...................................................63
SECTION 906. Reference in Securities to Supplemental Indentures....................................63
ARTICLE X Covenants
SECTION 1001. Payment of Principal, Premium and Interest............................................63
SECTION 1002. Maintenance of Office or Agency.......................................................63
SECTION 1003. Money for Securities Payments to Be Held in Trust.....................................64
SECTION 1004. Statement by Officers as to Default...................................................65
SECTION 1005. Existence.............................................................................66
SECTION 1006. Limitations on Liens..................................................................66
SECTION 1007. Restriction of Sale-Leaseback Transaction.............................................67
SECTION 1008. Waiver of Certain Covenants...........................................................68
SECTION 1009. Additional Amounts....................................................................68
SECTION 1010. Calculation of Original Issue Discount................................................69
ARTICLE XI Redemption Of Securities
SECTION 1101. Applicability of Article..............................................................69
SECTION 1102. Election to Redeem; Notice to Trustee.................................................69
SECTION 1103. Selection by Trustee of Securities to be Redeemed.....................................70
SECTION 1104. Notice of Redemption..................................................................70
iii
SECTION 1105. Deposit of Redemption Price...........................................................71
SECTION 1106. Securities Payable on Redemption Date.................................................71
SECTION 1107. Securities Redeemed in Part...........................................................71
ARTICLE XII Sinking Funds
SECTION 1201. Applicability of Article..............................................................72
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.................................72
SECTION 1203. Redemption of Securities for Sinking Fund.............................................72
ARTICLE XIII Defeasance
SECTION 1301. Applicability of Article..............................................................73
SECTION 1302. Legal Defeasance......................................................................73
SECTION 1303. Covenant Defeasance...................................................................75
SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities............................................................................76
SECTION 1305. Repayment to Partnership..............................................................77
ARTICLE XIV Guarantee of Securities
SECTION 1401. Unconditional Guarantee...............................................................77
SECTION 1402. Execution and Delivery of Notation of Guarantees......................................79
iv
INDENTURE
PARTIES:
INDENTURE, dated as of July 15, 2002, among VALERO LOGISTICS
OPERATIONS, L.P., a Delaware limited partnership (herein called the
"Partnership"), having its principal office at One Valero Place, San Antonio,
Texas 78212, VALERO L.P., a Delaware limited partnership (the "Guarantor"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee (herein called
the "Trustee").
RECITALS OF THE PARTNERSHIP:
The Partnership has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured senior
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be guaranteed by the Guarantor and to be issued in one or more
series as in this Indenture provided.
All things necessary to make this Indenture a valid and legally binding
agreement of the Partnership, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be a part of this Indenture and, to the extent applicable,
shall be governed by such provisions.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly, or by reference therein or defined by a
Commission rule under the Trust Indenture Act, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted
1
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States at the date of such
computation;
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(5) the words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture; and
(6) the word "includes" and its derivatives means "includes,
but is not limited to" and its corresponding derivative definitions.
Certain terms, used principally in Article VI, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified
in Section 105.
"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 the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"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 the 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 constitute payments for property rights, during the
remaining term of the lease included in the Sale-Leaseback Transaction,
including any period for which the 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, the amount shall be the lesser of the amount determined
assuming termination upon the first date the 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 the lease
subsequent to the first date upon which it may be so terminated, or the amount
determined assuming no termination.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Banking Day" means, with respect to any city, any date on which
commercial banks are open for business in that city.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors or the protection of creditors.
2
"Board of Directors" means the board of directors of the General
Partner, or the executive or any other committee of that board duly authorized
to act in respect thereof. If the Partnership shall change its form of entity to
other than a limited partnership, the references to officers or the Board of
Directors of the General Partner shall mean the officers or the Board of
Directors (or other comparable governing body), respectively, of the
Partnership.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the General Partner, the principal
financial officer of the General Partner or any other authorized officer of the
General Partner or a person duly authorized by any of them, to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee. Where any provision of this
Indenture refers to action to be taken pursuant to a Board Resolution (including
the establishment of any series of the Securities and the forms and terms
thereof), such action may be taken by any committee, officer or employee of the
Partnership authorized to take such action by the Board of Directors as
evidenced by a Board Resolution.
"Business Day," when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.
"Capital Interests" means any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Consolidated Net Tangible Assets" means, at any date of determination,
the total amount of assets after deducting therefrom (a) all current
liabilities, excluding (i) any current liabilities renewable or extendable at
the option of the obligor to a time more than 12 months after the time as of
which the amount thereof is being computed, and (ii) current maturities of
long-term debt, and (b) the value, net of any applicable amortization, of all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the consolidated balance
sheet of the Partnership for the Partnership's most recently completed fiscal
quarter, prepared in accordance with GAAP.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered in the Borough of Manhattan, The City of New York, and which, at
the date hereof is 5 Penn Plaza, 13th Floor, New York, New York 10001.
3
"corporation" includes corporations, associations, limited liability
companies, joint-stock companies and business trusts.
"covenant defeasance" has the meaning specified in Section 1303.
"CUSIP" means the Committee on Uniform Securities Identification
Procedures.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Debt" means any obligation created or assumed by any Person for the
repayment of money borrowed, and any purchase money obligation created or
assumed by such Person and any guarantee of the foregoing.
"Default" means, with respect to a series of Securities, any event that
is, or after notice or lapse of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"defeasance" has the meaning specified in Section 1302.
"Definitive Security" means a Security other than a Global Security or
a temporary Security.
"Depositary" means, with respect to Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301, until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter shall mean or include each Person which is then a
Depositary hereunder, and if at any time there is more than one such Person,
shall be a collective reference to such Persons.
"Dollar" or "$" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any statute successor thereto.
"Foreign Currency" means a currency used by the government of a country
other than the United States of America.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
4
significant segment of the accounting profession of the United States, as in
effect from time to time.
"General Partner" means the person serving as such under the
Partnership Agreement, which, on the date hereof, is Valero GP, Inc., a Delaware
corporation.
"Global Security" means a Security in global form that evidences all or
part of a series of Securities and is authenticated and delivered to, and
registered in the name of, the Depositary for the Securities of such series or
its nominee.
"Guarantee" has the meaning specified in Section 1401.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor Guarantor shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean or include each Person who is then a Guarantor hereunder.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" also shall include the terms of particular
series of Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" means, with respect to any series of Debt Securities
issued under this Indenture, the date on which Debt Securities of that series
are initially issued.
"Lien" means any mortgage, pledge, security interest, charge, lien or
other encumbrance of any kind, whether or not filed, recorded and perfected
under applicable law.
"mandatory sinking fund payment" has the meaning specified in Section
1201.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(3).
5
"Officers' Certificate" means a certificate signed by any two officers
of the General Partner (or if the Partnership shall change its form of entity to
other than a limited partnership, by Persons or officers, members, agents and
the like positions comparable to those of the foregoing nature, as applicable),
and delivered to the Trustee. One of the officers or such other Persons (as
applicable) signing an Officers' Certificate given pursuant to Section 1004
shall be the principal executive, financial or accounting officer of the General
Partner (or if the Partnership shall change its form of entity to other than a
limited partnership, by Persons or officers, members, agents and the like
positions comparable to those of the foregoing nature, as applicable).
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Partnership, the Guarantor, the General Partner
or an Affiliate of the General Partner.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(1) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Partnership) in trust or set aside and
segregated in trust by the Partnership (if the Partnership shall act as
its own Paying Agent) for the Holders of such Securities; provided,
however, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(3) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Partnership; and
(4) Securities, except to the extent provided in Sections 1302
and 1303, with respect to which the Partnership has effected defeasance
or covenant defeasance as provided in Article XIII which continues in
effect;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 502, (B) the principal amount of a
Security denominated in one or
6
more currencies or currency units other than U.S. dollars shall be the U.S.
dollar equivalent of such currencies or currency units, determined in the manner
provided as contemplated by Section 301 on the date of original issuance of such
Security or by Section 115, if not otherwise so provided pursuant to Section
301, of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent (as so determined) on the date of original
issuance of such Security, of the amount determined as provided in clause (A)
above) of such Security, and (C) Securities owned by the Partnership, the
Guarantor or any other obligor upon the Securities or any Affiliate of the
Partnership or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned as described
in clause (C) of the immediately preceding sentence which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Partnership, the Guarantor or any
other obligor upon the Securities or any Affiliate of the Partnership or of such
other obligor.
"Pari Passu Debt" means any Debt of the Partnership, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Debt, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Debt shall be subordinated in right of payment to the
Securities.
"Partnership" means the Person named as the "Partnership" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Partnership" shall mean such successor Person.
"Partnership Agreement" means the Agreement of Limited Partnership of
the Partnership as in effect from time to time.
"Partnership Request" or "Partnership Order" means a written request or
order delivered to the Trustee and signed in the name of the Partnership by any
two officers of the General Partner, or if the Partnership shall change its form
of entity to other than a limited partnership, by Persons or officers, members,
agents and the like positions comparable to those of the foregoing nature, as
applicable.
"Paying Agent" means any Person authorized by the Partnership to pay
the principal of and any premium or interest on any Securities on behalf of the
Partnership.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Stated Maturity or Stated Maturities
thereof, the original issue date or dates thereof, the redemption provisions, if
any, with respect thereto, and any other terms specified as contemplated by
Section 301 with respect thereto, are to be determined by the Partnership upon
the issuance of such Securities.
"Permitted Liens" means, with respect to any Person:
7
(1) Liens upon rights-of-way for pipeline purposes created by
a Person other than the Partnership;
(2) any statutory or governmental Lien or Lien arising by
operation of law, or any mechanics', repairmen's, materialmen's,
suppliers', carriers', landlords', warehousemen's 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;
(3) the right reserved to, or vested in, any municipality or
public authority by the terms of any right, power, franchise, grant,
license, permit or by any provision of law, to purchase or recapture or
to designate a purchaser of, any property;
(4) Liens of taxes and assessments which are (A) for the then
current year, (B) not at the time delinquent, or (C) delinquent but the
validity of which is being contested at the time in good faith by the
Partnership or any of its Subsidiaries;
(5) Liens of, or to secure performance of, leases, other than
capital leases;
(6) any Lien upon, or deposits of, any assets in favor of any
surety company or clerk of court for the purpose of obtaining indemnity
or stay of judicial proceedings;
(7) any Lien upon property or assets acquired or sold by the
Partnership or any of its Subsidiaries resulting from the exercise of
any rights arising out of defaults on receivables;
(8) any Lien incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance,
temporary disability, social security, retiree health or similar laws
or regulations or to secure obligations imposed by statute or
governmental regulations;
(9) any Lien in favor of the Partnership or any of its
Subsidiaries;
(10) 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
Partnership 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;
(11) any Lien securing industrial development, pollution
control or similar revenue bonds;
(12) any Lien securing Debt of the Partnership or any of its
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
8
consideration, among other things, required notices to be given to
Holders of Outstanding Securities under this Indenture (including the
Securities) in connection with such refunding, refinancing or
repurchase, and the required corresponding durations thereof), to
refinance, refund or repurchase all Outstanding Securities under this
Indenture (including the Securities), including the amount of all
accrued interest thereon and reasonable fees and expenses and premium,
if any, incurred by the Partnership or any of its Subsidiaries in
connection therewith;
(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 by any governmental authority
in connection with any contract or statute; or
(14) any Lien upon or deposits of any assets to secure
performance of bids, trade contracts or statutory obligations.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, unincorporated organization or government, or any agency or political
subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means, unless otherwise specifically provided for with respect to such
series as contemplated by Section 301, the office or agency of the Partnership
in The City of New York and such other place or places where, subject to the
provisions of Section 1002, the principal of and any premium and interest on the
Securities of that series are payable as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same Debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee within the corporate trust department, including any Vice
President, assistant secretary, assistant treasurer, trust officer or assistant
trust officer assigned to the Corporate Trust Office, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer of the Trustee to whom such matter is
referred because of his
9
knowledge of and familiarity with the particular subject, and who shall have
direct responsibility for the administration of this Indenture.
"Sale-Leaseback Transaction" means the sale or transfer by the
Partnership or any of its Subsidiaries of any property or assets to a Person
(other than the Partnership or a Subsidiary of the Partnership) and the taking
back by the Partnership or any Subsidiary of the Partnership, as the case may
be, of a lease of such property or assets.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any Person means (i) any partnership of which more than
50% of the Capital Interests (considering all partners' Capital Interests as a
single class) is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person or
combination thereof, or (ii) any corporation, association or other business
entity of which more than 50% of the total voting power of the Capital Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or combination thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, except as otherwise
provided in Section 905; provided, however, that if the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean each Trustee with respect to
Securities of that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the
issuer thereof.
10
"Vice President," when used with respect to the Partnership, means any
vice president of the General Partner, or when used with respect to the Trustee,
means any vice president of the Trustee.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"commission" means the Commission.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Partnership, the
Guarantor or any other obligor on the indenture securities.
All terms used in this Indenture that are defined by the Trust
Indenture Act, defined by a Trust Indenture Act reference to another statute or
defined by a Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
SECTION 103. Compliance Certificates and Opinions.
Upon any application or request by the Partnership to the Trustee to
take any action under any provision of this Indenture, the Partnership shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished except as required under
Section 314(c) of the Trust Indenture Act.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1004) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
11
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Partnership or the
General Partner may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Partnership or the General Partner stating that the information with respect to
such factual matters is in the possession of the Partnership or the General
Partner, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 105. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed (either physically or by means of a facsimile
or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic transmission is transmitted through
the facilities of a Depositary) to the Trustee and, where it is hereby expressly
required, to the Partnership. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 315 of
12
the Trust Indenture Act) conclusive in favor of the Trustee and the Partnership,
if made in the manner provided in this Section 105.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership, principal amount and serial numbers of Securities held
by any Person, and the date of commencement of such Person's holding the same,
shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other action of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Partnership
in reliance thereon, regardless of whether notation of such action is made upon
such Security.
Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
The Partnership may set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series, but the Partnership shall have no
obligation to do so. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to give or take the relevant action, regardless of whether such Holders
remain Holders after such record date.
SECTION 106. Notices, Etc., to Trustee, Partnership or Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, the Guarantor or by the
Partnership shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing (which may be via facsimile) to or
with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
13
(2) the Partnership by the Trustee, the Guarantor or by any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Partnership addressed to it at the
address of its principal office specified in the first paragraph of
this instrument to the attention of the Corporate Secretary, or at any
other address previously furnished in writing to the Trustee by the
Partnership; or
(3) the Guarantor by the Partnership, the Trustee or by any
Holder shall be sufficient for every purpose hereunder if in writing
and mailed, first-class postage prepaid, to the Guarantor addressed to:
Valero L.P., One Valero Place, San Antonio, Texas 78212, Attention:
Corporate Secretary, or at any other address previously furnished in
writing to the Trustee by the Guarantor.
SECTION 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid (if international mail, by
air mail), to each Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
14
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Partnership shall
bind its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 113. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series that specifically states
that such provision shall apply in lieu of this Section 114)) payment of
interest or principal (and any premium) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
SECTION 115. Securities in a Composite Currency, Currency Unit or Foreign
Currency.
Unless otherwise specified in an Officer's Certificate delivered
pursuant to Section 301 of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at the
time Outstanding and, at such time, there are Outstanding Securities of any
series which are denominated in a coin, currency or currencies other than
Dollars (including, but not limited to, any composite currency, currency units
or Foreign Currency), then the principal amount of Securities of such series
which shall be deemed to be Outstanding for the purpose of taking such action
shall be that amount of Dollars that could be obtained for such amount at the
Market
15
Exchange Rate. For purposes of this Section 115, the term "Market Exchange Rate"
shall mean the noon Dollar buying rate in The City of New York for cable
transfers of such currency or currencies as published by the Federal Reserve
Bank of New York, as of the most recent available date. If such Market Exchange
Rate is not so available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York as of the most recent
available date, or quotations or rates of exchange from one or more major banks
in The City of New York or in the country of issue of the currency in question,
which for purposes of euros shall be Brussels, Belgium, or such other quotations
or rates of exchange as the Trustee shall deem appropriate. The provisions of
this paragraph shall apply in determining the equivalent principal amount in
respect of Securities of a series denominated in a currency other than Dollars
in connection with any action taken by Holders of Securities pursuant to the
terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 116. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of or
interest on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a Banking Day, then, to
the extent permitted by applicable law, the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the Banking Day next preceding the day on which final unappealable
judgment is entered and (b) its obligations under this Indenture to make
payments in the Required Currency (i) shall not be discharged or satisfied by
any tender, or any recovery pursuant to any judgment (whether or not entered in
accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture.
16
SECTION 117. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent, waiver
or Act required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 118. Non-Recourse to the General Partner; No Personal Liability of
Officers, Directors, Employees or Partners.
Obligations of the Partnership and the Guarantor under this Indenture
and the Securities hereunder are non-recourse to the General Partner and the
general partner of the Guarantor, as applicable, and their Affiliates (other
than the Partnership and the Guarantor), and payable only out of cash flow and
assets of the Partnership or the Guarantor, as the case may be. The Trustee, and
each Holder of a Security by its acceptance thereof, will be deemed to have
agreed in this Indenture that (1) neither the General Partner, the general
partner of the Guarantor nor their respective assets (nor any of its Affiliates
other than the Partnership and the Guarantor, nor their respective assets) shall
be liable for any of the obligations of the Partnership and the Guarantor under
this Indenture or such Securities, and (2) no director, officer, employee,
stockholder or unitholder, as such, of the Partnership, the Guarantor, the
Trustee, the General Partner, the general partner of the Guarantor or any
Affiliate of any of the foregoing entities shall have any personal liability in
respect of the obligations of the Partnership and the Guarantor under this
Indenture or such Securities by reason of his, her or its status.
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series and any notations thereon relating to the
Guarantees shall be in substantially the form set forth in this Article II, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or
automated quotation system on which the Securities of such series may be listed
or traded or Depositary therefor or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by an authorized officer or other authorized Person on
behalf of the Partnership and delivered to the Trustee at or prior to the
delivery of the Partnership Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
17
The forms of Global Securities of any series shall have such provisions
and legends as are customary for Securities of such series in global form,
including without limitation any legend required by the Depositary for the
Securities of such series.
SECTION 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert-FOR
PURPOSES OF SECTION 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS . . . . . . . ., THE ISSUE
DATE IS . . . . . ., 20. . . [AND] [,] THE YIELD TO MATURITY IS . . . . . . . .
[,] [AND THE ORIGINAL ISSUE DISCOUNT FOR THE SHORT ACCRUAL PERIOD IS . . . . . .
... . AND THE METHOD USED TO DETERMINE THE YIELD THEREFOR IS . . . . .]]
[Insert any other legend required by the United States Internal Revenue
Code and the regulations thereunder.]
[If a Global Security, insert legend required by Section 204 of the
Indenture.]
[If applicable, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), 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.]
VALERO LOGISTICS OPERATIONS, L.P.
[TITLE OF SECURITY]
No. U.S. $
---------- ----------
[CUSIP No. [ ]]
----------
VALERO LOGISTICS OPERATIONS, L.P., a Delaware limited partnership
(herein called the "Partnership," 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 _______________ [if the Security is to
bear interest prior to Maturity, insert --, and to pay interest thereon from
______________, 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 ________ __, ____, at the rate of ___% per annum, until
the principal hereof is paid or made available for payment [if applicable,
insert --, and at the rate of ___% per annum on any overdue
18
principal and premium and on any overdue installment of interest]. [If
applicable, insert -- 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 Security 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. A "Business Day" shall
mean, when used with respect to any Place of Payment, each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law, executive order or
regulation to close.] 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 Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ________ __ 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 may either be
paid to the Person in whose name this Security (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
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Securities of this series 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 Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]
[If a Global Security, insert -- Payment of the principal of [(and
premium, if any)] and [if applicable, insert -- any such] interest on this
Security will be made by transfer of immediately available funds to a bank
account in _______________ 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 [state other currency].]
[If a Definitive Security, insert -- Payment of the principal of [(and
premium, if any)] and [if applicable, insert -- any such] interest on this
Security will be made at the office or agency of the Partnership maintained for
that purpose in _______________, [in such coin or
19
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts] [state other currency] [or
subject to any laws or regulations applicable thereto and to the right of the
Partnership (as provided in the Indenture) to rescind the designation of any
such Paying Agent, at the [main] offices of _______________ in _______________
and _______________ in _______________, or at such other offices or agencies as
the Partnership may designate, by [United States Dollar] [state other currency]
check drawn on, or transfer to a [United States Dollar] account maintained by
the payee with, a bank in The City of New York (so long as the applicable Paying
Agent has received proper transfer instructions in writing at least [__] days
prior to the payment date)] [if applicable, insert -- ; provided, however, that
payment of interest may be made at the option of the Partnership by [United
States Dollar] [state other currency] check mailed to the addresses of the
Persons entitled thereto as such addresses shall appear in the Security
Register] [or by transfer to a [United States Dollar] [state other currency]
account maintained by the payee with a bank in The City of New York [state other
Place of Payment] (so long as the applicable Paying Agent has received proper
transfer instructions in writing by the Record Date prior to the applicable
Interest Payment Date)].]
Reference is hereby made to the further provisions of this Security 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 Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated:
--------------
VALERO LOGISTICS OPERATIONS, L.P.,
By: Valero GP, Inc.
Its General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of senior securities of
the Partnership (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture dated as of [________] [__], [____] (the
"Indenture"), among the Partnership, the Guarantor (defined below) and The Bank
of New York, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Partnership, the Guarantor, the Trustee and
20
the Holders of the Securities and of the terms upon which the Securities are,
and are to be, authenticated and delivered. As provided in the Indenture, the
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
Security is one of the series designated on the face hereof [if applicable,
insert --, limited in aggregate principal amount to U.S.$______].
This Security is the senior unsecured obligation of the Partnership and
is guaranteed pursuant to a guarantee (the "Guarantee") by Valero L.P., a
Delaware limited partnership (the "Guarantor"). The Guarantee is the senior
unsecured obligation of the Guarantor.
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [if
applicable, insert -- (1) on ________________ in any year commencing with the
year ____ and ending with the year ____ through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after ________, ________], as a
whole or in part, at the election of the Partnership, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed [if applicable, insert -- on or before ______________, ___%, and if
redeemed] during the 12-month period beginning of the years indicated,
Year Redemption Price Year Redemption Price
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, (1) on
________ in any year commencing with the year ____ and ending with the year ____
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ___________], as a whole or in part, at the
election of the Partnership, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month
period beginning ____________ of the years indicated,
21
REDEMPTION PRICE FOR
REDEMPTION PRICE FOR REDEMPTION OTHERWISE THAN
REDEMPTION THROUGH OPERATION THROUGH OPERATION OF THE
YEAR OF THE SINKING FUND SINKING FUND
---- ---------------------------- -------------------------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The sinking fund for this series provides for
the redemption in each year beginning with the year ____ and ending with the
year ____ of [if applicable, -- not less than $_____ ("mandatory sinking fund")
and not more than] $_____ aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Partnership
otherwise than through [if applicable, -- mandatory] sinking fund payments may
be credited against subsequent [if applicable, -- mandatory] sinking fund
payments otherwise required to be made [if applicable, -- in the inverse order
in which they become due].]
[If the Security is subject to redemption in part of any kind, insert
- -- In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Securities of this series are not
redeemable prior to Stated Maturity.]
[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (1) of the amount of principal so declared due and payable,
and (2) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Partnership's obligations in respect of the payment of the principal
of and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the rights of the
22
Holders of the Securities of each series to be affected under the Indenture at
any time by the Partnership and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding of all
series to be affected (voting as one class). The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Partnership
or the Guarantor with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
regardless of whether notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security 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
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series 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
Securities of this series 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 Security for the
enforcement of any payment of principal hereof or [any premium or] interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Partnership,
which is absolute and unconditional, to pay the principal of and [any premium
and] interest on this Security at the times, place(s) and rate, and in the coin
or currency, herein prescribed.
[If a Global Security, insert -- This Global Security or portion hereof
may not be exchanged for Definitive Securities of this series 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 a Definitive Security, insert -- As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Partnership in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert -- The City of New
York [, or, subject to any laws or regulations applicable thereto and to the
right of the Partnership (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of _______________
____________ in __________________ and _________________
23
in ______________ or at such other offices or agencies as the Partnership may
designate]], duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Partnership and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.]
The Securities of this series are issuable only in registered form
without coupons in denominations of U.S.$ [state other currency] and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series 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 Partnership may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, regardless of whether this Security is overdue, and neither
the Partnership, the Trustee nor any such agent shall be affected by notice to
the contrary.
Obligations of the Partnership under the Indenture and the Securities
thereunder, including this Security, are non-recourse to Valero GP, Inc. (the
"General Partner") and its Affiliates (other than the Partnership and the
Guarantor), and payable only out of cash flow and assets of the Partnership or
the Guarantor. The Trustee, and each Holder of a Security by its acceptance
hereof, will be deemed to have agreed in the Indenture that (1) neither the
General Partner nor its assets (nor any of its Affiliates other than the
Partnership and the Guarantor, nor their respective assets) shall be liable for
any of the obligations of the Partnership or the Guarantor under the Indenture
or such Securities, including this Security, and (2) no director, officer,
employee, stockholder or unitholder, as such, of the Partnership, the Guarantor,
the Trustee, the General Partner or any Affiliate of any of the foregoing
entities shall have any personal liability in respect of the obligations of the
Partnership or the Guarantor under the Indenture or such Securities by reason of
his, her or its status.
The Indenture provides that the Partnership and the Guarantor (a) will
be discharged from any and all obligations in respect of the Securities (except
for certain obligations described in the Indenture), or (b) need not comply with
certain restrictive covenants of the Indenture, in each case if the Partnership
or the Guarantor deposits, in trust, with the Trustee money or U.S. Government
Obligations (or a combination thereof) which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
in an amount sufficient to pay all the principal of and interest on the
Securities, but such money need not be segregated from other funds except to the
extent required by law.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
24
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
[If a Definitive Security, insert as a separate page --
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________ ___________________ (Please Print or Typewrite
Name and Address of Assignee) the within instrument of VALERO LOGISTICS
OPERATIONS, L.P. and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer said instrument on the books of
the within-named Partnership, with full power of substitution in the premises.
Please Insert Social Security or Other Identifying Number of Assignee:
Dated: (Signature):
------------------------
Signature Guarantee:
-----------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
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.]
FORM OF NOTATION ON SECURITY
RELATING TO GUARANTEE
The Guarantor (which term includes any successor Person in such
capacity under the Indenture), has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, the due and punctual payment of the principal of,
and premium, if any, and interest on the Securities and all other amounts due
and payable under the Indenture and the Securities by the Partnership.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantees and the Indenture are expressly set forth
in Article XIV of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee.
25
Guarantor:
VALERO L.P.
By: Riverwalk Logistics, L.P.
Its General Partner
By: Valero GP, LLC,
Its General Partner
By:
--------------------------
SECTION 204. Global Securities.
Every Global Security authenticated and delivered hereunder shall bear
a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR
REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY
PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH
TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED
UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF,
THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING,
EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
If Securities of a series are issuable in whole or in part in the form
of one or more Global Securities, as specified as contemplated by Section 301,
then, notwithstanding clause (9) of Section 301 and the provisions of Section
302, any Global Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased, as the case
may be, to reflect exchanges. Any endorsement of a Global Security to reflect
the amount, or any reduction or increase in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
a Partnership Order. Subject to the provisions of Sections 303, 304 and 305, the
Trustee shall deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Partnership Order. Any instructions by the Partnership with respect
to endorsement or delivery or redelivery of a Global Security shall be in a
Partnership Order (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel).
26
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Partnership and the Partnership delivers to the Trustee the Global
Security together with a Partnership Order (which need not comply with Section
102 and need not be accompanied by an Opinion of Counsel) with regard to the
reduction or increase, as the case may be, in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 303.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
------------------------------------------
The Bank of New York, as Trustee
By:
--------------------------------------
Authorized Signatory
Dated:
-----------------------------------
ARTICLE III
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and set forth, or determined in
the manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the title of the Securities of the series including CUSIP
numbers (which shall distinguish the Securities of the series from all
other Securities and which may be a part of a series of Securities
previously issued);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities
27
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Sections 304, 305, 306, 906 or 1107 and except for any Securities
which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities
of the series is payable or the method of determination thereof;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, or the formula, method or provision
pursuant to which such rate or rates are determined, the date or dates
from which such interest shall accrue, or the method of determination
thereof, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any interest payable on any
Interest Payment Date;
(6) the place or places where, subject to the provisions of
Section 1002, the principal of and any premium and interest on
Securities of the series shall be payable, Securities of the series may
be surrendered for registration of transfer, Securities of the series
may be surrendered for exchange and notices, and demands to or upon the
Partnership in respect of the Securities of the series and this
Indenture may be served;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Partnership;
(8) the obligation, if any, of the Partnership to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) whether payment of principal of and premium, if any, and
interest, if any, on the Securities of the series shall be without
deduction for taxes, assessments or governmental charges paid by
Holders of the series;
(11) if other than the principal amount thereof, the portion
of the principal amount which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502;
(12) if other than the currency of the United States of
America, the currency or currencies, including composite currencies,
currency units or Foreign Currency, in which
28
payment of the principal of and any premium and interest on the
Securities of the series shall be payable, and, if other than as
specified in Section 115, the manner of determining the equivalent
thereof in the currency of the United States of America for purposes of
the determination of "Outstanding" in Section 101;
(13) if the amount of payments of principal of and any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(14) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Partnership or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which payment of
the principal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(15) the right, if any, of the Partnership to defer payments
of interest by extending the interest payment periods and the duration
of such extension, the Interest Payment Dates on which such interest
shall be payable and whether and under what circumstances additional
interest on amounts deferred shall be payable;
(16) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for such
Global Security or Global Securities and any circumstances other than
those set forth in Section 305 in which any such Global Security may be
transferred to, and registered and exchanged for Securities registered
in the name of, a Person other than the Depositary for such Global
Security or a nominee thereof and in which any such transfer may be
registered;
(17) any deletions from, modifications of or additions to the
Events of Default set forth in Section 501 or the covenants of the
Partnership set forth in Article X with respect to the Securities of
such series;
(18) whether and under which circumstances the Partnership
will pay additional amounts on the Securities of the series held by a
Person who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted, and, if so, whether the
Partnership will have the option to redeem the Securities of the series
rather than pay such additional amounts;
(19) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(20) if the Securities of the series are convertible into or
exchangeable for any other security or property of the Partnership,
including, without limitation, securities of another Person held by the
Partnership or its Affiliates and, if so, the terms thereof;
29
(21) if other than as provided in Sections 1302 and 1303, the
means of defeasance or covenant defeasance as may be specified for the
Securities of the series;
(22) if other than the Trustee, the identity of the Security
Registrar and any Paying Agent; and
(23) any other terms of the Securities of the series (which
terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for increases in the aggregate principal amount of such series of
Securities and issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.
If any of the terms of the series are established by action taken by or
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized officer or other authorized person of the
General Partner on behalf of the Partnership and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth, or providing
the manner for determining, the terms of the series.
With respect to Securities of a series subject to a Periodic Offering,
such Board Resolution or Officers' Certificate may provide general terms for
Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Partnership Order,
or that such terms shall be determined by the Partnership, or one or more of the
Partnership's agents designated in an Officers' Certificate, in accordance with
a Partnership Order.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such specified denomination with respect to
the Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Partnership by the
Chief Executive Officer, Chief Financial Officer, President or any Vice
President of the General Partner and need not be attested. The signature of any
of these officers on the Securities may be manual or facsimile.
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Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the General Partner shall bind the
Partnership, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Partnership may deliver Securities of any series executed by
the Partnership to the Trustee for authentication, together with a Partnership
Order for the authentication and delivery of such Securities, and the Trustee in
accordance with the Partnership Order shall authenticate and deliver such
Securities; provided, however, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Partnership or its duly authorized agents, thereafter promptly confirmed in
writing) acceptable to the Trustee as may be specified by or pursuant to a
Partnership Order delivered to the Trustee prior to the time of the first
authentication of Securities of such series. If the form or terms of the
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive such
documents as it may reasonably request. The Trustee shall also be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,
(1) if the form or forms of such Securities has been
established in or pursuant to a Board Resolution as permitted by
Section 201, that each such form has been established in conformity
with the provisions of this Indenture;
(2) if the terms of such Securities have been, or in the case
of Securities of a series offered in a Periodic Offering, will be,
established in or pursuant to a Board Resolution as permitted by
Section 301, that such terms have been, or in the case of Securities of
a series offered in a Periodic Offering, will be, established in
conformity with the provisions of this Indenture, subject, in the case
of Securities of a series offered in a Periodic Offering, to any
conditions specified in such Opinion of Counsel; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Partnership in the manner and subject to
any conditions and assumptions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the
Partnership enforceable in accordance with their terms, subject to the
following limitations: (i) bankruptcy, insolvency, moratorium,
reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws of general applicability relating to or affecting
the enforcement of creditors' rights, or to general equity principles,
(ii) the availability of equitable remedies being subject to the
discretion of the court to which application therefor is made; (iii)
with reference to Securities stated to be payable in a currency other
than Dollars said counsel may note that (x) a New York statute provides
that a judgment rendered by a court of the State of New York in respect
of an obligation denominated in any such other currency would be
rendered in such other currency and would be converted into Dollars at
the rate of exchange prevailing on the date of entry of the judgment,
and (y) a judgment rendered by a Federal court sitting in the State of
New
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York in respect of an obligation denominated in any such other currency
may be expressed in Dollars, but said counsel need express no opinion
as to the rate of exchange such Federal court would apply; and (iv)
such other usual and customary matters as shall be specified in such
Opinion of Counsel.
If such form or forms or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Partnership Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Partnership of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and the
other documents delivered pursuant to Sections 201 and 301 and this Section 303,
as applicable, in connection with the first authentication of Securities of such
series.
Each Security shall be dated as of the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Partnership, and the Partnership shall deliver such Security to the Trustee for
cancellation as provided in Section 309 for all purposes of this Indenture, such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of Definitive Securities of any series, the
Partnership may execute, and upon Partnership Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
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If temporary Securities of any series are issued, the Partnership will
cause Definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of Definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for Definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Partnership maintained pursuant to Section
1002 for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Partnership shall execute and the Trustee shall
authenticate and deliver in exchange therefor Definitive Securities of the same
series and tenor, of any authorized denominations and of a like aggregate
principal amount. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Partnership shall cause to be kept at the office or agency of the
Partnership in the Borough of Manhattan, the City of New York (or in any other
office or agency of the Partnership in a Place of Payment required by Section
1002) a register (the register maintained in such office being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Partnership shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed as the initial "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided and its corporate
trust office which, at the date hereof, is located at 5 Penn Plaza, 13th Floor,
New York, New York 10001, as the initial office or agency in the Borough of
Manhattan, The City of New York where the Security Register will be maintained.
The Partnership may at any time replace such Security Registrar, change such
office or agency or act as its own Security Registrar. The Partnership will give
prompt written notice to the Trustee of any change of the Security Registrar or
of the location of such office or agency.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Partnership maintained pursuant to Section
1002 for such purpose, the Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and tenor, of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series and tenor, of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Partnership shall execute,
and the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Partnership, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Partnership or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Partnership and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be imposed for any registration of transfer or
exchange of Securities, but the Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
Neither the Trustee nor the Partnership shall be required (1) to issue,
register the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of Securities of that series selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(2) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
Notwithstanding any other provisions of this Indenture and except as
otherwise specified with respect to any particular series of Securities as
contemplated by Section 301, a Global Security representing all or a portion of
the Securities of a series may not be transferred, except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary. Every Security authenticated and
delivered upon registration or transfer of or in exchange for or in lieu of, a
Global Security shall be a Global Security except as provided in the two
paragraphs immediately following.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Partnership that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible to continue
as Depositary under Section 101 or ceases to be a clearing agency registered
under the Exchange Act, the Partnership shall appoint a successor Depositary
with respect to such Securities. If a successor Depositary for such Securities
is not appointed by the Partnership within 90 days after the Partnership
receives such notice or becomes aware of such ineligibility, the Partnership's
election pursuant to Section 301 that such Securities be represented by one or
more Global Securities shall no longer be effective and the Partnership will
execute, and the Trustee, upon receipt of a Partnership Order for the
authentication and delivery of Definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities in exchange for such Global Security or Securities
registered in the names of such Persons as the Depository shall direct.
The Partnership may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities. In
such event the Partnership will execute, and the Trustee, upon
34
receipt of a Partnership Order for the authentication and delivery of the
Definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities in exchange for
such Global Security or Securities registered in the names of such Persons as
the Depository shall direct.
If specified by the Partnership pursuant to Section 301 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series and tenor in definitive registered form on such
terms as are acceptable to the Partnership and such Depositary. Thereupon, the
Partnership shall execute, and the Trustee, upon receipt of a Partnership Order
for the authentication and delivery of Securities in definitive registered form,
shall authenticate and deliver, without service charge,
(1) to the Person specified by such Depositary a new Security
or Securities of the same series and tenor, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(2) to such Depositary a new Global Security in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities authenticated and delivered pursuant to clause (1) above.
Every Person who takes or holds any beneficial interest in a Global
Security agrees that:
(a) the Partnership and the Trustee may deal with the
Depositary as sole owner of the Global Security and as the
authorized representative of such Person;
(b) such Person's rights in the Global Security shall
be exercised only through the Depositary and shall be limited
to those established by law and agreement between such Person
and the Depositary and/or direct and indirect participants of
the Depositary;
(c) the Depositary and its participants may make
book-entry transfers of beneficial ownership among, and
receive and transmit distributions of principal and interest
on the Global Securities to, such Persons in accordance with
their own procedures; and
(d) none of the Partnership, the Trustee nor any
agent of the Partnership or the Trustee will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such
beneficial ownership interests.
35
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, together with
such security or indemnity as may be required by the Partnership, the Guarantor
or the Trustee to save each of them and any agent of either of them harmless,
the Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security, with an endorsement of the Guarantee executed
by the Guarantor, of the same series and of like tenor and principal amount and
bearing a number not contemporaneously Outstanding.
If there shall be delivered to the Partnership, the Guarantor and the
Trustee (1) evidence to their satisfaction of the destruction, loss or theft of
any Security and (2) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Partnership, the Guarantor or the Trustee that such Security
has been acquired by a bona fide purchaser, the Partnership shall execute and
the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security, with an endorsement of the Guarantee
executed by the Guarantor, of the same series and of like tenor and principal
amount and bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Partnership in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 306, the
Partnership may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section 306 in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Partnership and the Guarantor, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section 306 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of
36
having been such Holder, and such Defaulted Interest may be paid by the
Partnership, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Partnership may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Partnership shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the
Partnership shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon, the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Partnership of
such Special Record Date and, in the name and at the expense of the
Partnership, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such
series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Partnership may make payment of any Defaulted Interest
on the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange or
automated quotation system on which such Securities may be listed or
traded, and upon such notice as may be required by such exchange, if,
after notice given by the Partnership to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 307 and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security, shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, prior to due presentment of a Security for
registration of transfer, the Partnership, the Guarantor, the Trustee and any
agent of the Partnership, the Guarantor, or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to
Sections 305 and
37
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and neither the Partnership, the
Guarantor, the Trustee nor any agent of the Partnership, the Guarantor, or the
Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Partnership,
the Guarantor, the Trustee and any agent of the Partnership, the Guarantor, or
the Trustee as the owner of such Global Security for all purposes whatsoever.
None of the Partnership, the Guarantor, the Trustee nor any agent of the
Partnership, the Guarantor, or the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Partnership or the Guarantor may at
any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Partnership or the Guarantor may
have acquired in any manner whatsoever, and may deliver to the Trustee (or to
any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Partnership has not issued and
sold, and all Securities so delivered shall be promptly canceled by the Trustee.
No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 309, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of in accordance with its customary practices, and the Trustee shall
thereafter deliver to the Partnership a certificate with respect to such
disposition.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and interest on
the Securities of each series for any partial period shall be computed on the
basis of a 360-day year of twelve 30-day months and the number of days elapsed
in any partial month.
SECTION 311. CUSIP Numbers.
The Partnership in issuing the Securities may use "CUSIP" numbers (if
then generally in use, and in addition to the other identification numbers
printed on the Securities), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness of
such "CUSIP" numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or
38
omission of such "CUSIP" numbers. The Partnership shall promptly notify the
Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Partnership Request cease to be of further
effect with respect to Securities of any series (except as to any surviving
rights of registration of transfer or exchange of such Securities herein
expressly provided for), and the Trustee, at the expense of the Partnership,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities, when
(1) either
(a) all such Securities theretofore authenticated and
delivered (other than (i) such Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, and (ii) such Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Partnership and thereafter
repaid to the Partnership or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(b) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Partnership,
and the Partnership or the Guarantor in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust for this purpose an amount of money in the currency or currency
units in which such Securities are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(1) the Partnership has paid or caused to be paid all other
sums payable hereunder by the Partnership with respect to such
Securities; and
39
(2) the Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to such Securities have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to Securities of any series, (x) the obligations of the Partnership to
the Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and the right of the Trustee to resign
under Section 610 shall survive, and (y) if money shall have been deposited with
the Trustee pursuant to subclause (b) of clause (1) of this Section 401, the
obligations of the Partnership and/or the Trustee under Sections 402, 606, 701
and 1002 and the last paragraph of Section 1003 shall survive such satisfaction
and discharge.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Partnership acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE V
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the performance, or breach, of any term,
covenant or warranty of the Partnership in this Indenture (other than a
term, covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section 501 specifically dealt with or
which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series), and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
Partnership by the Trustee or to the Partnership and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding
Securities of that series a written notice specifying
40
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(4) failure to pay any Debt of the Partnership in excess of
$25 million, whether at final maturity (after the expiration of any
applicable grace periods) or upon acceleration of the maturity thereof,
if such indebtedness is not discharged, or such acceleration is not
annulled, within 10 days after there has been given, by registered or
certified mail, to the Partnership by the Trustee or to the Partnership
and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(5) the Partnership pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) consents to the
entry of any order for relief against it in an involuntary case, (C)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (D) makes a general assignment
for the benefit of its creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (A) is for relief against the
Partnership in an involuntary case, (B) appoints a Custodian of the
Partnership or for all or substantially all of its property, or (C)
orders the liquidation of the Partnership; and the order or decree
remains unstayed and in effect for 60 days; or
(7) any other Event of Default provided with respect to
Securities of that series in accordance with Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount of (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof), and accrued but unpaid interest, if any, on all of the Securities of
that series to be due and payable immediately, by a notice in writing to the
Partnership and the Guarantor (and to the Trustee if given by Holders), and upon
any such declaration such principal amount (or specified amount) shall become
immediately due and payable. Notwithstanding the foregoing, if an Event of
Default specified in clause (5) or (6) of Section 501 occurs, the Securities of
any series at the time Outstanding shall be due and payable immediately without
further action or notice.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Partnership and
the Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if
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(1) the Partnership or the Guarantor has paid or deposited
with the Trustee a sum sufficient to pay:
(a) all overdue interest on all Securities of that
series,
(b) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(c) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(d) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Partnership covenants that if
(1) default is made in the payment of any installment of
interest on any Security when such interest becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Partnership will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Partnership fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final
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decree and may enforce the same against the Partnership or any other obligor
upon such Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Partnership or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Partnership or any other obligor upon the
Securities, their property or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Partnership for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the
Securities in respect of which or for the benefit of
which such money has been collected, ratably, without
preference or priority of any kind, according to the
amounts due and payable on such Securities for
principal and any premium and interest, respectively;
and
THIRD: The balance, if any, to the Partnership.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
(including the Guarantee), or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered and, if requested,
provided to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice,
request and offer and, if requested, provision of security or indemnity
has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Sections 305
and 307) interest on such Security on the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Partnership, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or
45
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series; provided, however, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall determine that the proceeding so directed
would involve the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except:
(1) a continuing default in the payment of the principal of or
any premium or interest on any Security of such series, or
(2) a default in respect of a covenant or provision hereof
which under Article IX cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series
affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant, other
than the Trustee, in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the
46
claims or defenses made by such party litigant; but the provisions of this
Section 514 shall not apply to any suit instituted by the Partnership, to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of, or premium, if any, or
interest on any Security on or after the Stated Maturity or Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date).
SECTION 515. Waiver of Usury, Stay or Extension Laws.
Each of the Partnership and the Guarantor covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any usury, stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Partnership and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture and as are provided by the Trust Indenture Act, and,
except for implied covenants or obligations under the Trust
Indenture Act, no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they substantially
conform to the requirements of this Indenture but need not
confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
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(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section 601;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series,
given pursuant to Section 512, relating to the time, method
and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect
to the Securities of such series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section 601.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default in the payment of the principal of or any
premium or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Securities of such series; and, provided, further, that in the case of any
Default of the character specified in Section 501(3) with respect to Securities
of such series, no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion,
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report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
(whether in its original or facsimile form) believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Partnership mentioned
herein shall be sufficiently evidenced by a Partnership Request or
Partnership Order (other than delivery of any Security to the Trustee
for authentication and delivery pursuant to Section 303, which shall be
sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) shall
be entitled to receive and may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Partnership, personally or by agent
or attorney at the expense of the Partnership and shall incur no
liability of any kind by reason of such inquiry or investigation;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder and shall not be responsible
for the supervision of officers and employees of such agents or
attorneys;
(h) the Trustee may request that the Partnership deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate
49
may be signed by any person authorized to sign an Officers'
Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and
(i) the Trustee shall be entitled to the rights and
protections afforded to the Trustee pursuant to this Article in acting
as a Paying Agent or Security Registrar hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Partnership, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. Neither the Trustee nor any Authenticating
Agent makes any representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Partnership of Securities
or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Partnership, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
310(b) and 311 of the Trust Indenture Act and Sections 608, 609 and 613 hereof,
may otherwise deal with the Partnership with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Partnership.
SECTION 607. Compensation and Reimbursement.
The Partnership agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as shall be determined to have been caused by its own negligence or bad
faith; and
50
(3) to indemnify each of the Trustee and its officers,
directors, agents and employees for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Partnership
under this Section 607 the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities.
Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services of the Trustee are intended to constitute expenses
of administration under any applicable Bankruptcy Law.
The provisions of this Section 607 shall survive the satisfaction and
discharge of this Indenture, the resignation or removal of the Trustee and the
defeasance of the Securities.
SECTION 608. Disqualification; Conflicting Interests.
Reference is made to Section 310(b) of the Trust Indenture Act. There
shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture
Act this Indenture with respect to the Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
required by the Trust Indenture Act, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 609, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. The Trustee shall not be an obligor upon the Securities or an
Affiliate thereof. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 609, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 611.
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(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to
the Partnership. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition at the expense of the Partnership any
court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Partnership.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
310(b) of the Trust Indenture Act after written request therefor by the
Partnership or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request therefor by
the Partnership or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Partnership by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or more
series, the Partnership, by a Board Resolution, shall promptly appoint
a successor Trustee or Trustees with respect to the Securities of that
or those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or all
of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence
of such vacancy, a successor Trustee with respect to the Securities of
any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered
to the Partnership and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and to
that extent supersede the successor Trustee appointed by the
Partnership. If no
52
successor Trustee with respect to the Securities of any series shall
have been so appointed by the Partnership or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has
been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(f) The Partnership shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in
the manner provided in Section 107. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series
and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Partnership and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the
Partnership or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Partnership, the retiring Trustee and each successor
Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee shall
be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture the
resignation or removal of the
53
retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee
relates; but, on request of the Partnership or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Partnership shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of this
Section 611, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article and the Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Partnership.
Reference is made to Section 311 of the Trust Indenture Act. For
purposes of Section 311(b) of the Trust Indenture Act,
(1) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(2) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Partnership for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously
54
with the creation of the creditor relationship with the Partnership
arising from the making, drawing, negotiating or incurring of the
draft, bill of exchange, acceptance or obligation.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Partnership and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 614, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 614.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 614, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Partnership. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Partnership. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Partnership and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if
55
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 614.
Except with respect to an Authenticating Agent appointed at the request
of the Partnership, the Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 614,
and the Trustee shall be entitled to be reimbursed by the Partnership for such
payments, subject to the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section 614, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
------------------------------------,
As Trustee
By:
---------------------------------
As Authenticating Agent
By:
---------------------------------
Authorized Officer
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP
SECTION 701. Partnership to Furnish Trustee Names and Addresses of Holders.
The Partnership will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date for a series of Securities, a list for such series of
Securities, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of such series as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Partnership of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished with respect to such series of
Securities.
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SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section
701 and the names and addresses of Holders received by the Trustee in
its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list
so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders with respect to their rights under this
Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 702(a), or
(ii) inform such applicants as to the approximate
number of Holders whose names and addresses appear in the
information preserved at the time by the Trustee in accordance
with Section 702(a), and as to the approximate cost of mailing
to such Holders the form of proxy or other communication, if
any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request
of such applicants, mail to each Holder whose name and address appear
in the information preserved at the time by the Trustee in accordance
with Section 702(a) a copy of the form of proxy or other communication
which is specified in such request, with reasonable promptness after a
tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of
the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all such Holders with
reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.
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(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Partnership and the Trustee that neither the
Partnership nor the Trustee nor any agent of either of them shall be
held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section
702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason
of mailing any material pursuant to a request made under Section
702(b).
SECTION 703. Reports by Trustee.
Any Trustee's report required pursuant to Section 313(a) of the Trust
Indenture Act shall be dated as of May 15, and shall be transmitted within 60
days after May 15 of each year, commencing with the year 2003, by mail to all
Holders, as their names and addresses appear in the Security Register. A copy of
each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each stock exchange or automated quotation system, as
applicable, upon which any Securities are listed or traded, with the Commission
and with the Partnership. The Partnership will notify the Trustee when any
Securities are listed or de-listed on any stock exchange or traded on any
automated quotation system.
SECTION 704. Reports by Partnership.
The Partnership shall:
(a) file with the Trustee, within 15 days after the
Partnership is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Partnership may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Partnership
is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Partnership with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations;
(c) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Partnership pursuant
to clauses (a) and (b) of this Section 704 as may be required by rules
and regulations prescribed from time to time by the Commission; and
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(d) delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Partnership compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Partnership May Consolidate, Etc., Only on Certain Terms.
The Partnership shall not consolidate with or merge into any other
Person or sell, lease or transfer its properties and assets as, or substantially
as, an entirety to, any Person, unless:
(1) (A) in the case of a merger, the Partnership is the
surviving entity, or (B) the Person formed by such consolidation or
into which the Partnership is merged or the Person which acquires by
sale or transfer, or which leases, the properties and assets of the
Partnership as, or substantially as, an entirety expressly assumes, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on
all the Securities and the performance or observance of every covenant
of this Indenture on the part of the Partnership to be performed or
observed and shall have expressly provided for conversion rights in
respect of any series of Outstanding Securities with conversion rights;
(2) the surviving entity or successor Person is a Person
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia;
(3) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(4) the Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, sale, transfer or lease and such
supplemental indenture required, if any, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Partnership with, or merger of the
Partnership into, any other Person or any sale, transfer or lease of the
properties and assets of the Partnership as, or substantially as, an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Partnership is merged or to which such sale, transfer or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Partnership under this Indenture with the same effect as if
such successor Person had been
59
named originally as the Partnership herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Partnership, when authorized by
a Board Resolution, the Guarantor, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Partnership and the assumption by any such successor of the covenants
of the Partnership herein and in the Securities; or
(2) to evidence the succession of another Person to the
Guarantor and the assumption by any such successor of the Guarantee of
the Guarantor herein and in the Securities; or
(3) to add to the covenants of the Partnership such further
covenants, restrictions, conditions or provisions as the Partnership
shall consider to be appropriate for the benefit of the Holders of all
or any series of Securities (and if such covenants, restrictions,
conditions or provisions are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender any
right or power herein conferred upon the Partnership and to make the
occurrence, or the occurrence and continuance, of a Default in any such
additional covenants, restrictions, conditions or provisions an Event
of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided, that
in respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal
amount of the Securities of such series to waive such an Event of
Default; or
(4) to add any additional Defaults or Events of Default in
respect of all or any series of Securities; or
(5) to add to, change or eliminate any of the provisions of
this Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Securities in bearer form, registrable or
not registrable as to principal, and with or without interest coupons;
or
60
(6) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(7) to secure the Securities of any series pursuant to the
requirements of Section 1006 or otherwise; or
(8) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301, including to reopen any series of
any Securities as permitted under Section 301; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, to comply with any applicable mandatory provision of law or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not adversely affect the interests of
the Holders of Securities of any series in any material respect; or
(11) to comply with the rules or regulations of any securities
exchange or automated quotation system on which any of the Securities
may be listed or traded; or
(12) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act or under
any similar federal statute subsequently enacted, and to add to this
Indenture such other provisions as may be expressly required under the
Trust Indenture Act.
The Trustee is hereby authorized to join with the Partnership and the Guarantor
in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of all series affected
by such supplemental indenture, by Act of said Holders delivered to the
Partnership and the Trustee, the Partnership, when authorized by a Board
Resolution, the Guarantor and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of
61
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the Redemption Date for
any Security, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) modify the provisions of this Indenture in a manner
adversely affecting any right to convert or exchange any Security into
another security, or
(3) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(4) modify any of the provisions of this Section 902, Section
513 or Section 1008, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby, provided, however, that this
clause (4) shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the Trustee" and
concomitant changes in this Section 902, or the deletion of this
proviso, in accordance with the requirements of Sections 611(b) and
901(9).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section 902
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
62
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Partnership
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Partnership, to any such supplemental
indenture may be prepared and executed by the Partnership and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Partnership covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Partnership will maintain in the Borough of Manhattan, The City of
New York, and in each other Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Partnership
in respect of the Securities of that series and this Indenture may be served.
The Partnership will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Partnership shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
63
Office of the Trustee, and the Partnership hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Partnership may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Partnership of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York, and in each
other Place of Payment for Securities of any series for such purposes. The
Partnership will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Except as otherwise specified with respect to a series of Securities as
contemplated by Section 301, the Partnership hereby initially designates as the
Place of Payment for each series of Securities The City and State of New York,
and initially appoints the Trustee at its Corporate Trust Office as the
Partnership's office or agency for each such purpose in such city.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Partnership or any of its Subsidiaries shall at any time act as
Paying Agent with respect to any series of Securities, it will, on or before
each due date of the principal of and any premium or interest on any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and any premium
and interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Partnership shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
and any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Partnership will promptly notify the Trustee of its action
or failure so to act. For purposes of this Section 1003, should a due date for
principal of and any premium or interest on, or sinking fund payment with
respect to any series of Securities not be on a Business Day, such payment shall
be due on the next Business Day without any interest for the period from the due
date until such Business Day.
The Partnership will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 1003, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest, if any, on Securities of that
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
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(2) give the Trustee notice of any default by the Partnership
(or any other obligor upon the Securities of that series) in the making
of any payment of principal (and premium, if any) or interest, if any,
on the Securities of that series; and
(3) during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Partnership and the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Partnership Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Partnership or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Partnership or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to any applicable escheat or abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Partnership,
in trust for the payment of the principal of and any premium or interest on any
Security of any series and remaining unclaimed for one year after such principal
and any premium or interest has become due and payable shall be paid to the
Partnership on Partnership Request, or (if then held by the Partnership) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Partnership for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Partnership as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Partnership cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Partnership.
SECTION 1004. Statement by Officers as to Default.
Annually, within 150 days after the close of each fiscal year beginning
with the fiscal year ending December 31, 2002, the Partnership will deliver to
the Trustee a brief certificate (which need not include the statements set forth
in Section 103) from the principal executive officer, principal financial
officer or principal accounting officer of the General Partner of the
Partnership as to his or her knowledge of the Partnership's compliance (without
regard to any period of grace or requirement of notice provided herein) with all
conditions and covenants under the Indenture and, if the Partnership shall be in
Default, specifying all such Defaults and the nature and status thereof of which
such officer has knowledge. The Partnership shall deliver to the Trustee, as
soon as possible and in any event within five days after the Partnership becomes
aware of the occurrence of any Event of Default or an event which, with notice
or the lapse of time or both, would constitute an Event of Default, an Officers'
Certificate setting forth the details of such Event of Default or default and
the action which the Company proposes to take with respect thereto.
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SECTION 1005. Existence.
Subject to Article VIII, the Partnership will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Partnership shall not be required to preserve any such right or
franchise if it shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Partnership.
SECTION 1006. Limitations on Liens.
The Partnership will not, nor will it permit any of its Subsidiaries
to, create, assume, incur or suffer to exist any Lien upon any property or
assets, whether owned or leased on the date of this Indenture or thereafter
acquired, to secure any Debt of the Partnership or any other Person (other than
the Securities issued hereunder), without in any such case making effective
provision whereby all of the Securities Outstanding hereunder shall be secured
equally and ratably with, or prior to, such Debt so long as such Debt shall be
so secured. This restriction shall not apply to:
(1) Permitted Liens;
(2) any Lien upon any property or assets of the Partnership or
any of its Subsidiaries in existence on the Issue Date or created
pursuant to an "after acquired property" clause or similar term or
otherwise provided for pursuant to agreements existing on the Issue
Date;
(3) any Lien upon any property or assets created at the time
of acquisition of such property or assets by the Partnership or any of
its Subsidiaries 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;
(4) any Lien upon any property or assets existing thereon at
the time of the acquisition thereof by the Partnership or any of its
Subsidiaries (regardless of whether the obligations secured thereby are
assumed by the Partnership or any of its Subsidiaries); provided,
however, that such Lien only encumbers the property or assets so
acquired;
(5) any Lien upon any property or assets of a Person existing
thereon at the time such Person becomes a Subsidiary of the Partnership
by acquisition, merger or otherwise; provided, however, that such Lien
only encumbers the property or assets of such Person at the time such
Person becomes a Subsidiary of the Partnership;
(6) 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;
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(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, and Liens which secure a judgment or other court-ordered
award or settlement as to which the Partnership or the applicable
Subsidiary, as the case may be, has not exhausted its appellate rights;
(8) any Lien upon any additions, improvements, replacements,
repairs, fixtures, appurtenances or component parts thereof attaching
to or required to be attached to property or assets pursuant to the
terms of any mortgage, pledge agreement, security agreement or other
similar instrument, creating a Lien upon such property or assets
permitted by clauses (1) through (7) above;
(9) any extension, renewal, refinancing, refunding or
replacement (or successive extensions, renewals, refinancing,
refundings or replacements) of any Lien, in whole or in part, referred
to in clauses (1) through (8), inclusive, of this Section 1006;
provided, however, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal, refinancing, refunding or replacement (plus
the aggregate amount of premiums, other payments, costs and expenses
required to be paid or incurred in connection with such extension,
renewal, refinancing, refunding or replacement); provided, further,
however, that such extension, renewal, refinancing, refunding or
replacement Lien shall be limited to all or a part of the property
(including improvements, alterations and repairs on such property)
subject to the encumbrance so extended, renewed, refinanced, refunded
or replaced (plus improvements, alterations and repairs on such
property); or
(10) any Lien resulting from the deposit of moneys or evidence
of indebtedness in trust for the purpose of defeasing Debt of the
Partnership or any Subsidiary.
Notwithstanding the foregoing provisions of this Section 1006, the
Partnership may, and may permit any of its Subsidiaries to, create, assume,
incur or suffer to exist any Lien upon any property or assets to secure Debt of
the Partnership or any Person (other than the Securities) that is not excepted
by clauses (1) through (10), inclusive, of this Section 1006 without securing
the Securities issued hereunder, 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
Section 1007), does not exceed 10% of Consolidated Net Tangible Assets.
SECTION 1007. Restriction of Sale-Leaseback Transaction.
The Partnership will not, nor will it permit any of its Subsidiaries
to, engage in a Sale-Leaseback Transaction, unless:
(1) the Sale-Leaseback Transaction occurs within one year from
the date of completion of the acquisition of the property or assets
subject thereto or the date of the completion of construction,
development or substantial repair or improvement, or commencement of
full operations on such property or assets, whichever is later;
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(2) the Sale-Leaseback Transaction involves a lease for a
period, including renewals, of not more than three years;
(3) the Partnership or such Subsidiary would be entitled to
incur Debt secured by a Lien on the property or assets subject thereto
in a principal amount equal to or exceeding the Attributable
Indebtedness from such Sale-Leaseback Transaction without equally and
ratably securing the Securities; or
(4) the Partnership 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 Pari Passu Debt of the
Partnership, or (B) the expenditure or expenditures for property or
assets used or to be used in the ordinary course of business of the
Partnership or its Subsidiaries.
Notwithstanding the foregoing provisions of this Section 1007, the
Partnership may, and may permit any of its Subsidiaries to, effect any
Sale-Leaseback Transaction that is not excepted by clauses (1) through (4),
inclusive, of this Section 1007; provided that the Attributable Indebtedness
from such Sale-Leaseback Transaction, together with the aggregate principal
amount of then outstanding Debt (other than the Securities) secured by Liens
upon any property or assets of the Partnership or its Subsidiaries not excepted
by clauses (1) through (10), inclusive, of Section 1006, do not exceed 10% of
the Consolidated Net Tangible Assets.
SECTION 1008. Waiver of Certain Covenants.
The Partnership may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1005, Section 1006 or Section
1007 with respect to the Securities of any series if before the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of all affected series (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 Partnership and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
A waiver which changes or eliminates any term, provision or condition
of this Indenture which has expressly been included solely for the benefit of
one or more particular series of Securities, or which modifies the rights of the
Holders of 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.
SECTION 1009. Additional Amounts.
If the Securities of a series provide for the payment of additional
amounts (as provided in Section 301(18)), at least 10 days prior to the first
Interest Payment Date with respect to that series of Securities and at least 10
days prior to each date of payment of principal of, premium, if any, or interest
on the Securities of that series if there has been a change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Partnership
shall furnish to the
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Trustee and the principal paying agent, if other than the Trustee, an Officers'
Certificate instructing the Trustee and such paying agent whether such payment
of principal of, premium, if any, or interest on the Securities of that series
shall be made to holders of the Securities of that series without withholding or
deduction for or on account of any tax, assessment or other governmental charge
described in the Securities of that series. If any such withholding or deduction
shall be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld or deducted on such payments to such
holders and shall certify the fact that additional amounts will be payable and
the amounts so payable to each holder, and the Partnership shall pay to the
Trustee or such paying agent the additional amounts required to be paid by this
Section 1009. The Partnership covenants to indemnify the Trustee and any paying
agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section 1009.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of or any premium, interest or any other amounts on, or
in respect of, any Securities of any series, such mention shall be deemed to
include mention of the payment of additional amounts provided by the terms of
such series established hereby or pursuant hereto to the extent that, in such
context, additional amounts are, were or would be payable in respect thereof
pursuant to such terms, and express mention of the payment of additional amounts
(if applicable) in any provision hereof shall not be construed as excluding the
payment of additional amounts in those provisions hereof where such express
mention is not made.
SECTION 1010. Calculation of Original Issue Discount.
The Partnership shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Partnership to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Partnership of less than all the Securities of any series, the Partnership
shall, not less than 30 nor more than 60 days prior to the
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Redemption Date fixed by the Partnership (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (2)
pursuant to an election of the Partnership which is subject to a condition
specified in the terms of such Securities, the Partnership shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 45 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by lottery or
any other manner the Trustee deems fair and equitable for redemption of portions
(equal to the minimum authorized denomination for Securities of that series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series.
The Trustee shall promptly notify the Partnership in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed. If the
Securities of any series to be redeemed consist of Securities having different
dates on which the principal is payable or different rates of interest, or
different methods by which interest may be determined or have any other
different tenor or terms, then the Partnership may, by written notice to the
Trustee, direct that the Securities of such series to be redeemed shall be
selected from among the groups of such Securities having specified tenor or
terms and the Trustee shall thereafter select the particular Securities to be
redeemed in the manner set forth in the preceding paragraph from among the group
of such Securities so specified.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail (if
international mail, by air mail), postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities of any series
and of a specified tenor are to be redeemed, the identification (and,
in the case of partial redemption of any Securities, the principal
amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
(6) applicable CUSIP numbers, and
(7) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed shall be given by the
Partnership or, at the Partnership's request, by the Trustee in the name and at
the expense of the Partnership.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Partnership shall deposit with
the Trustee or with a Paying Agent (or, if the Partnership is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Partnership shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Partnership at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Partnership or the Trustee so
requires, due endorsement by, or a
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written instrument of transfer in form satisfactory to the Partnership and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Partnership shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Partnership (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption), and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Partnership pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the
Trustee), the Partnership will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202 and stating the basis for such
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credit and that such Securities have not been previously so credited, and will
also deliver to the Trustee any Securities to be so delivered. Not less than 30
days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Partnership in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE XIII
DEFEASANCE
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 301 for
Securities of such series.
SECTION 1302. Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section 401, the
Partnership shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series on the 91st day after the date of the
deposit referred to in clause (1) below, and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series and the Partnership's right of optional redemption, if any, (ii)
substitution of mutilated, destroyed, lost or stolen Securities, (iii) rights of
Holders of Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments of principal
thereof and interest thereon, upon the original stated due dates therefor or on
the specified redemption dates therefor (but not upon acceleration), and
remaining rights of the holders to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder, and the Partnership's obligations in connection therewith (including,
but not limited to, Section 607), (v) the rights, if any, to convert or exchange
the Securities of such series, (vi) the rights of the Holders of Securities of
such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and (vii) the obligations of the
Partnership under Section 1002), and the Trustee, at the expense of the
Partnership, shall, upon a Partnership Request, execute proper instruments
acknowledging the same, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):
(1) The Partnership has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust, for the purposes of
making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Securities
of such series (A) cash in an amount, or (B) in the case of any series
of Securities the payments on which may only be made in legal coin or
currency of the United States, U.S. Government Obligations, maturing as
to principal and interest at such times and in such amounts as will
insure the availability of cash in an amount, or (C) a combination
thereof, certified to be sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof
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delivered to the Trustee, to pay (i) the principal and interest and
premium, if any, on all Securities of such series on each date that
such principal, interest or premium, if any, is due and payable or on
any Redemption Date established pursuant to clause (3) below, and (ii)
any mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of this Indenture and
the Securities of such series;
(2) The Partnership has delivered to the Trustee an Opinion of
Counsel based on the fact that (A) the Partnership has received from,
or there has been published by, the Internal Revenue Service a ruling,
or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will
be subject to federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred;
(3) If the Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee shall have been made;
(4) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default shall have occurred and
be continuing on the date of such deposit;
(5) Such defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such
Act);
(6) Such defeasance shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument to
which the Partnership is a party or by which it is bound;
(7) Such defeasance shall not result in the trust arising from
such deposit constituting an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, unless such trust shall
be registered under such Act or exempt from registration thereunder;
and
(8) The Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
provision have been complied with.
For this purpose, such defeasance means that the Partnership, the
Guarantor and any other obligor upon the Securities of such series shall be
deemed to have paid and discharged the entire debt represented by the Securities
of such series, which shall thereafter be deemed to be "Outstanding" only for
the purposes of Section 1304 and the rights and obligations referred to in
clauses (i) through (vii), inclusive, of the first paragraph of this Section
1302, and to have
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satisfied all its other obligations under the Securities of such series and this
Indenture insofar as the Securities of such series are concerned.
Notwithstanding the foregoing, if an Event of Default specified in
Section 501(5) or 501(6), or an event which with lapse of time would become such
an Event of Default, shall occur during the period ending on the 91st day after
the date of the deposit referred to in clause (1) or, if longer, ending on the
day following the expiration of the longest preference period applicable to the
Partnership in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1302 and such deposit shall be rescinded
and annulled, and the Partnership, the Trustee and the Holders of the Securities
of such series shall be restored to their former positions.
SECTION 1303. Covenant Defeasance.
The Partnership and any other obligor shall be released on the 91st day
after the date of the deposit referred to in clause (1) below from its
obligations under Sections 704, 801, 1005, 1006 and 1007 with respect to the
Securities of any series on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Securities of such
series shall thereafter be deemed to be not "Outstanding" for the purposes of
any request, demand, authorization, direction, notice, waiver, consent or
declaration or other action or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
Outstanding for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Securities of such series, the
Partnership may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such Section, whether
directly or indirectly by reason of any reference elsewhere herein to such
Section or by reason of any reference in such Section to any other provision
herein or in any other document and such omission to comply shall not constitute
a Default or an Event of Default under Section 501, but, except as specified
above, the remainder of this Indenture and the Securities of such series shall
be unaffected thereby. The following shall be the conditions to application of
this Section 1303:
(1) The Partnership has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Securities
of such series, (A) cash in an amount, or (B) in the case of any series
of Securities the payments on which may only be made in legal coin or
currency of the United States, U.S. Government Obligations, maturing as
to principal and interest at such times and in such amounts as will
insure the availability of cash in a amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (i) the principal and interest
and premium, if any, on all Outstanding Securities of such series on
each date that such principal, interest or premium, if any, is due and
payable or on any Redemption Date established pursuant to clause (2)
below, and (ii) any mandatory sinking fund payments on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and the Securities of such series;
75
(2) If the Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee shall have been made;
(3) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default shall have occurred and
be continuing on the date of such deposit;
(4) The Partnership has delivered to the Trustee an Opinion of
Counsel which shall confirm that the Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred;
(5) Such covenant defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act);
(6) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which the Partnership is a party or by which it is bound;
(7) Such covenant defeasance shall not result in the trust
arising from such deposit constituting an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, unless
such trust shall be registered under such Act or exempt from
registration thereunder; and
(8) The Partnership has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating
to the covenant defeasance contemplated by this provision have been
complied with.
Notwithstanding the foregoing, if an Event of Default specified in
Section 501(5) or 501(6), or an event which with lapse of time would become such
an Event of Default, shall occur during the period ending on the 91st day after
the date of the deposit referred to in clause (1) or, if longer, ending on the
day following the expiration of the longest preference period applicable to the
Partnership in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1303 and such deposit shall be rescinded
and annulled, and the Partnership, the Trustee and the Holders of the Securities
of such series shall be restored to their former positions.
SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities.
Subject to the provisions of the last paragraph of Section 1003, all
moneys or U.S. Government Obligations (including proceeds thereof) deposited
with the Trustee pursuant to Section 1302 or 1303 (and all funds earned on such
moneys or U.S. Government Obligations) shall be held in trust and applied by it,
in accordance with the provisions of such Securities and
76
this Indenture, to the payment, either directly or through any Paying Agent
(including the Partnership acting as its own Paying Agent), to the Holders of
the particular Securities of such series for the payment or redemption of which
such moneys have been deposited with the Trustee, of all sums due and to become
due thereon for principal and any premium and interest; but such money need not
be segregated from other funds except to the extent required by law. Subject to
Sections 1302 and 1303, the Trustee shall promptly pay to the Partnership upon
request any excess moneys held by it at any time.
SECTION 1305. Repayment to Partnership.
The Trustee and any Paying Agent promptly shall pay or return to the
Partnership upon Partnership Request any money and U.S. Government Obligations
held by them at any time that are not required for the payment of the principal
of, premium, if any, and any interest on the Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.
The provisions of the last paragraph of Section 1003 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for one year after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.
ARTICLE XIV
GUARANTEE OF SECURITIES
SECTION 1401. Unconditional Guarantee.
For value received, the Guarantor hereby fully, irrevocably,
unconditionally and absolutely guarantees to the Holders and to the Trustee the
due and punctual payment of the principal of, and premium, if any, and interest
on the Securities and all other amounts due and payable under this Indenture and
the Securities by the Partnership (including, without limitation, all costs and
expenses (including reasonable legal fees and disbursements) incurred by the
Trustee or the Holders in connection with the enforcement of this Indenture and
the Guarantees) (collectively, the "Indenture Obligations"), when and as such
principal, premium, if any, and interest and such other amounts shall become due
and payable, whether at the Stated Maturity, upon redemption or by declaration
of acceleration or otherwise, according to the terms of the Securities and this
Indenture. The guarantees by the Guarantor set forth in this Article XIV are
referred to herein as the "Guarantees." Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts that constitute
part of the Indenture Obligations and would be owed by the Partnership under
this Indenture and the Securities but for the fact that they are unenforceable,
reduced, limited, impaired, suspended or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Partnership.
Failing payment when due of any amount guaranteed pursuant to the
Guarantees, for whatever reason, the Guarantor will be obligated (to the fullest
extent permitted by applicable law) to pay the same immediately to the Trustee,
without set-off or counterclaim or other reduction whatsoever (whether for
taxes, withholding or otherwise). Each Guarantee hereunder
77
is intended to be a general, unsecured, senior obligation of the Guarantor and
will rank pari passu in right of payment with all indebtedness of the Guarantor
that is not, by its terms, expressly subordinated in right of payment to the
Guarantee of the Guarantor. The Guarantor hereby agrees that to the fullest
extent permitted by applicable law, its obligations hereunder shall be full,
irrevocable, unconditional and absolute, irrespective of the validity,
regularity or enforceability of the Securities, the Guarantees or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, the recovery of
any judgment against the Partnership, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Guarantor. The Guarantor hereby agrees that in the
event of a default in payment of the principal of, or premium, if any, or
interest on the Securities of any series or any other amounts payable under this
Indenture and the Securities by the Partnership, whether at the Stated Maturity,
upon redemption or by declaration of acceleration or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or,
subject to Section 507 hereof, by the Holders, on the terms and conditions set
forth in this Indenture, directly against the Guarantor to enforce the
Guarantees without first proceeding against the Partnership.
To the fullest extent permitted by applicable law, the obligations of
the Guarantor under this Article XIV shall be as aforesaid full, irrevocable,
unconditional and absolute and shall not be impaired, modified, discharged,
released or limited by any occurrence or condition whatsoever, including,
without limitation, (i) any compromise, settlement, release, waiver, renewal,
extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Partnership or the Guarantor contained in any
of the Securities or this Indenture, (ii) any impairment, modification, release
or limitation of the liability of the Partnership, the Guarantor or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable Bankruptcy
Law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the Partnership, the Guarantor or the Trustee of any
rights or remedies under any of the Securities or this Indenture or their delay
in or failure to assert or exercise any such rights or remedies, (iv) the
assignment or the purported assignment of any property as security for any of
the Securities, including all or any part of the rights of the Partnership or
the Guarantor under this Indenture, (v) the extension of the time for payment by
the Partnership or the Guarantor of any payments or other sums or any part
thereof owing or payable under any of the terms and provisions of any of the
Securities or this Indenture or of the time for performance by the Partnership
or the Guarantor of any other obligations under or arising out of any such terms
and provisions or the extension or the renewal of any thereof, (vi) the
modification or amendment (whether material or otherwise) of any duty, agreement
or obligation of the Partnership or the Guarantor set forth in this Indenture,
(vii) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting, the Partnership or any of the Guarantor or any of
their respective assets, or the disaffirmance of any of the Securities, the
Guarantees or this Indenture in any such proceeding, (viii) the release or
discharge of the Partnership or the Guarantor from the performance or observance
of any agreement, covenant, term or condition contained in any of such
instruments by operation of law, (ix) the unenforceability of any of the
Securities, the Guarantees or this Indenture, (x) any change in the name,
business, capital structure, corporate existence, or
78
ownership of the Partnership or the Guarantor, or (xi) any other circumstance
which might otherwise constitute a defense available to, or a legal or equitable
discharge of, a surety or the Guarantor.
To the fullest extent permitted by applicable law, the Guarantor hereby
(i) waives diligence, presentment, demand of payment, notice of acceptance,
filing of claims with a court in the event of the merger, insolvency or
bankruptcy of the Partnership or the Guarantor, and all demands and notices
whatsoever, (ii) acknowledges that any agreement, instrument or document
evidencing the Guarantees may be transferred and that the benefit of its
obligations hereunder shall extend to each holder of any agreement, instrument
or document evidencing the Guarantees without notice to them and (iii) covenants
that its Guarantee will not be discharged except by complete performance of the
Guarantees. The Guarantor further agrees that to the fullest extent permitted by
applicable law, if at any time all or any part of any payment theretofore
applied by any Person to any Guarantee is, or must be, rescinded or returned for
any reason whatsoever, including without limitation, the insolvency, bankruptcy
or reorganization of the Guarantor, such Guarantee shall, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence notwithstanding such application, and the Guarantees shall continue to
be effective or be reinstated, as the case may be, as though such application
had not been made.
The Guarantor shall be subrogated to all rights of the Holders and the
Trustee against the Partnership in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation with respect to any of the
Securities until all of the Securities and the Guarantees thereof shall have
been indefeasibly paid in full or discharged.
A director, officer, employee or stockholder, as such, of the Guarantor
shall not have any liability for any obligations of the Guarantor under this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.
No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
XIV and the Guarantees shall operate as a waiver thereof, nor shall any single
or partial exercise of any rights, power, privilege or remedy preclude any other
or further exercise thereof, or the exercise of any other rights, powers,
privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity. Nothing contained in this Article XIV shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article V or to pursue any rights or remedies hereunder
or under applicable law.
SECTION 1402. Execution and Delivery of Notation of Guarantees.
To further evidence the Guarantees, the Guarantor hereby agrees that a
notation of such Guarantees shall be endorsed on each Security authenticated and
delivered by the Trustee and executed by either manual or facsimile signature of
an officer of the Guarantor provided that failure to include such notation on
the Security shall not affect the validity of the Guarantees.
79
The Guarantor hereby agrees that its Guarantees shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation relating to the Guarantee thereof.
If an officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, the Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
* * *
This instrument may executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
80
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
VALERO LOGISTICS OPERATIONS, L.P.
By: Valero GP, Inc.,
Its General Partner
By: /s/ Curtis V. Anastasio
-------------------------------------------
Name: Curtis V. Anastasio
-----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
VALERO L.P.
By: Riverwalk Logistics, L.P.
Its General Partner
By: Valero GP, LLC,
Its General Partner
By: /s/ Curtis V. Anastasio
-------------------------------------------
Name: Curtis V. Anastasio
-----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
THE BANK OF NEW YORK, as Trustee
By: /s/ Remo J. Reale
------------------------------------------
Name: Remo J. Reale
----------------------------------------
Title: Vice President
---------------------------------------
81
EXHIBIT 4.2
================================================================================
VALERO LOGISTICS OPERATIONS, L.P.,
ISSUER
VALERO L.P.,
GUARANTOR
AND
THE BANK OF NEW YORK,
TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JULY 15, 2002
TO
INDENTURE
DATED AS OF JULY 15, 2002
----------
6-7/8% SENIOR NOTES DUE 2012
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I 6-7/8% SENIOR NOTES DUE 2012............................................2
SECTION 1.01 Designation of the Notes; Establishment of Form..................2
SECTION 1.02 Amount...........................................................2
SECTION 1.03 Redemption.......................................................2
SECTION 1.04 Conversion.......................................................3
SECTION 1.05 Maturity.........................................................3
SECTION 1.06 Place of Payment.................................................3
SECTION 1.07 Other Terms of the Notes due 2012................................3
ARTICLE II AMENDMENTS TO THE INDENTURE............................................3
SECTION 2.01 Definitions......................................................3
SECTION 2.02 Consolidation, Merger, Conveyance, Transfer or Lease.............5
SECTION 2.03 Covenants........................................................6
SECTION 2.04 Events of Default................................................9
ARTICLE III MISCELLANEOUS.........................................................9
SECTION 3.01 Execution as Supplemental Indenture..............................9
SECTION 3.02 Responsibility for Recitals, Etc. ...............................9
SECTION 3.03 Provisions Binding on Partnership's and Guarantor's Successors...9
SECTION 3.04 Governing Law....................................................9
SECTION 3.05 Execution and Counterparts.......................................9
SECTION 3.06 Capitalized Terms...............................................10
EXHIBIT A - FORM OF SECURITY....................................................A-1
EXHIBIT B - FORM OF SUPPLEMENTAL INDENTURE......................................B-1
-i-
FIRST SUPPLEMENTAL INDENTURE, dated as of July 15, 2002 (the "First
Supplemental Indenture"), among Valero Logistics Operations, L.P., a Delaware
limited partnership having its principal office at One Valero Place, San
Antonio, Texas 78212 (the "Partnership"), Valero L.P., a Delaware limited
partnership (the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership, the Guarantor and the Trustee have heretofore executed
and delivered the Indenture dated as of July 15, 2002 (the "Original Indenture,"
and as supplemented from time to time, the "Indenture"), providing for the
issuance from time to time of one or more series of the Partnership's
Securities, each to be guaranteed by the Guarantor and the terms of which are to
be determined as set forth in Section 301 of the Original Indenture.
Section 901 of the Original Indenture provides, among other things,
that the Partnership, the Guarantor and the Trustee may enter into indentures
supplemental to the Original Indenture for, among other things, the purpose of
establishing the form or terms of Securities of any series as permitted by
Sections 201 and 301 of the Original Indenture.
Section 901 of the Original Indenture also permits the execution of
supplemental indentures without the consent of any Holders to, among other
things, (i) add to the covenants of the Partnership such further covenants,
restrictions, conditions or provisions as the Partnership shall consider to be
appropriate for the benefit of the Holders of all or any series of Securities,
(ii) add any additional Defaults or Events of Default in respect of, all or any
series of Securities, and (iii) change or eliminate any of the provisions of the
Indenture, provided that, any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefits of
such provision.
The Partnership desires to create a series of the Securities, which
series shall be designated the "6-7/8% Senior Notes due 2012" (the "Notes due
2012"), and all action on the part of the Partnership necessary to authorize the
issuance of the Notes due 2012 under the Original Indenture and this First
Supplemental Indenture has been duly taken.
The Partnership, pursuant to the foregoing authority, proposes in and
by this First Supplemental Indenture to supplement and amend the Indenture
insofar as it will apply only to the Notes due 2012.
All acts and things necessary to make the Notes due 2012, when duly
issued by the Partnership and when executed on behalf of the Partnership and
completed, authenticated and delivered by the Trustee as provided in the
Original Indenture and this First Supplemental Indenture, the valid and binding
obligations of the Partnership and to constitute these presents a valid and
binding supplemental indenture and agreement according to its terms, have been
done and performed.
Now, Therefore, This First Supplemental Indenture Witnesseth:
That in consideration of the premises and the issuance of the Notes due
2012, the Partnership, the Guarantor and the Trustee mutually covenant and
agree, for the equal and proportionate benefit of all Holders of the Notes due
2012, as follows:
ARTICLE I
6-7/8% SENIOR NOTES DUE 2012
SECTION 1.01 Designation of the Notes; Establishment of Form.
A series of Securities designated "6-7/8% Senior Notes due 2012" is
established hereby, and the form thereof (including the notation of the
Guarantee) shall be substantially as set forth in Exhibit A hereto, which is
incorporated into and shall be deemed a part of this First Supplemental
Indenture, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as the Partnership may deem
appropriate or as may be required or appropriate to comply with any laws or with
any rules made pursuant thereto or with the rules of any securities exchange or
automated quotation system on which the Notes due 2012 may be listed or traded,
or to conform to general usage, or as may, consistently with the Indenture, be
determined by the officers executing such Notes due 2012, as evidenced by their
execution thereof.
The Notes due 2012 will initially be issued in permanent global form,
substantially in the form set forth in Exhibit A hereto, as a Global Security,
registered in the name of the Depositary or its nominee. The Depositary Trust
Company shall be the Depositary for such Global Securities.
The Partnership initially appoints the Trustee to act as paying agent
and Registrar with respect to the Notes due 2012.
SECTION 1.02 Amount.
The Trustee shall authenticate and deliver the Notes due 2012 for
original issue in an initial aggregate principal amount of up to $100,000,000
upon Partnership Order for the authentication and delivery of such aggregate
principal amount of the Notes due 2012. The authorized aggregate principal
amount of the Notes due 2012 may be increased at any time hereafter and the
series comprised thereby may be reopened for issuances of additional Notes due
2012, without the consent of any Holder. The Notes due 2012 issued on the date
hereof and any such additional Notes due 2012 that may be issued hereafter shall
be part of the same series of Securities referred to herein as the "Notes due
2012."
SECTION 1.03 Redemption.
(a) There shall be no sinking fund for the retirement of the
Notes due 2012 or other mandatory redemption obligation in respect
thereof.
2
(b) The Partnership, at its option, may redeem the Notes due
2012 at any time and from time to time, in accordance with the
provisions of the Notes due 2012 and Article XI of the Indenture.
SECTION 1.04 Conversion.
The Notes due 2012 shall not be convertible into any other securities.
SECTION 1.05 Maturity.
The Stated Maturity of the Notes due 2012 shall be July 15, 2012.
SECTION 1.06 Place of Payment.
Any Notes due 2012 that may be issued in certificated, non-global form
shall be payable at the corporate trust office of the Trustee in The City of New
York, which office, on the date of this First Supplemental Indenture, is located
at 101 Barclay Street, New York, New York 10286. The Notes due 2012 may be
presented for registration of transfer or exchange at the office of the Trustee
at which its corporate trust business is principally administered in the United
States, which office, on the date of this First Supplemental Indenture, is
located at 101 Barclay Street, New York, New York 10286. Notices and demands to
or upon the Partnership and the Guarantor in respect of the Notes due 2012 may
be served at such office.
SECTION 1.07 Other Terms of the Notes due 2012.
Without limiting the foregoing provisions of this Article I, the terms
of the Notes due 2012 shall be as provided in the form thereof set forth in
Exhibit A hereto and as provided in the Indenture.
ARTICLE II
AMENDMENTS TO THE INDENTURE
The amendments and supplements contained in this Article II shall apply
to the Notes due 2012 only and (except as and to the extent expressly so
provided at the time the form and terms of such other series are established as
provided in Sections 201 and 301 of the Original Indenture) not to any other
series of Securities issued under the Original Indenture, and (except as
aforesaid) any covenants, guarantees and other agreements provided herein are
expressly being included solely for the benefit of (i) the Notes due 2012 and
the Holders thereof and (ii) any Securities of any other series to which such
amendment and supplements have been made applicable and the Holders thereof.
These amendments and supplements shall be effective only for so long as there
remain Outstanding any Notes due 2012 or any Securities of any other series to
which such amendments and supplements have been made applicable, as the case may
be.
SECTION 2.01 Definitions.
Section 101 of the Original Indenture is amended by inserting in their
appropriate alphabetical position, the following definitions:
3
"Change of Control" means the occurrence of any transaction that
results in:
(1) the failure of Valero Energy Corporation or an Investment
Grade Person to own, directly or indirectly, 51% of the general partner
interests in the Guarantor;
(2) the failure of the Guarantor or an Investment Grade Person
to own, directly or indirectly, all of the general partner interests in
the Partnership; or
(3) the failure of the Guarantor or an Investment Grade Person
to own, directly or indirectly, all of the limited partner interests in
the Partnership.
"First Supplemental Indenture" means the First Supplemental Indenture
dated as of July 15, 2002 among the Partnership, the Guarantor and the Trustee,
which supplemental indenture amends and supplements this Indenture in connection
with the establishment of a series of Securities designated as "6 7/8% Senior
Notes due 2012".
"Funded Debt" means all Debt maturing one year or more from the date of
the creation thereof, all Debt directly or indirectly renewable or extendable,
at the option of the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more.
"Investment Grade Person" means a Person that has issued unsecured
senior debt that has at least two of the following ratings on the date the
transaction constituting a Change of Control is consummated:
(1) BBB- or above, in the case of S&P (or its equivalent under
any successor rating categories of S&P);
(2) Baa3 or above, in the case of Moody's (or its equivalent
under any successor rating categories of Moody's); or
(3) the equivalent in respect of the rating categories of any
rating agencies substituted for S&P or Moody's.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Notes due 2012" means the 6 7/8% Senior Notes due 2012 of the
Partnership, established pursuant to the First Supplemental Indenture.
"Other Affected Series" means any series of Securities (other than the
Notes due 2012) to which the amendments of the Original Indenture set forth in
Article II of the First Supplemental Indenture shall have been made applicable.
"S&P" means Standard & Poor's Ratings Services, a Division of The
McGraw-Hill Companies, Inc., and its successors.
"Subsidiary Guarantor" means, as at any date, any Subsidiary that has
become and then is obligated as a guarantor as provided in Section 1011, not
having been released pursuant to Section 1012.
4
SECTION 2.02 Consolidation, Merger, Conveyance, Transfer or Lease.
Article VIII of the Original Indenture is amended by restating Sections
801 and 802 in their entirety:
"SECTION 801. Partnership and Subsidiary Guarantors May Consolidate,
Etc., Only on Certain Terms.
The Partnership shall not, and subject to Section 1012, shall
not permit any Subsidiary Guarantor to, consolidate with or merge into
any other Person or sell, lease or transfer its properties and assets
as, or substantially as, an entirety to, any Person, unless:
(1) (A) in the case of a merger, the Partnership or such
Subsidiary Guarantor is the surviving entity, or (B) the Person formed
by such consolidation or into which the Partnership or such Subsidiary
Guarantor is merged or the Person which acquires by sale or transfer,
or which leases, the properties and assets of the Partnership or such
Subsidiary Guarantor as, or substantially as, an entirety expressly
assumes, by an indenture supplemental hereto, or a supplement to the
applicable Subsidiary Guarantee, as the case may be, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all of the obligations of the Partnership or such Subsidiary
Guarantor, as the case may be, under the Indenture and the Securities,
or the applicable Subsidiary Guarantee, as the case may be.
(2) the surviving entity or successor Person is a Person
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia;
(3) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(4) the Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, sale, transfer or lease and such
supplemental indenture required, if any, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Partnership or any Subsidiary
Guarantor with, or merger of the Partnership or any Subsidiary
Guarantor into, any other Person or any sale, transfer or lease of the
properties and assets of the Partnership or any Subsidiary Guarantor
as, or substantially as, an entirety in accordance with Section 801,
the successor Person formed by such consolidation or into which the
Partnership or such Subsidiary Guarantor is merged or to which such
sale, transfer or lease is made shall (and, in the case of any
Subsidiary Guarantor, its Subsidiary
5
Guarantee will provide that it shall) succeed to, and be substituted
for, and may exercise every right and power of, the Partnership or such
Subsidiary Guarantor under this Indenture and the Securities, or the
Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be
with the same effect as if such successor Person had been named
originally as the Partnership or such Subsidiary Guarantor herein or
therein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under this
Indenture and the Securities or such Subsidiary Guarantee, as the case
may be."
SECTION 2.03 Covenants.
Article X of the Original Indenture is amended by inserting the
following new sections in their entirety:
"SECTION 1011 Future Subsidiary Guarantors.
The Partnership shall cause each Subsidiary of the Partnership
that guarantees or becomes a co-obligor in respect of any Funded Debt
of the Partnership (including, without limitation, following any
release of such Subsidiary pursuant to Section 1012 from any guarantee
previously provided by it under this Section 1011) to (A) cause the
Notes due 2012 to be equally and ratably guaranteed by such Subsidiary,
but only to the extent that the Notes due 2012 are not already
guaranteed by such Subsidiary on reasonably comparable terms and (B)
promptly execute and deliver to the Trustee a supplemental indenture in
substantially the form attached as Exhibit B to the First Supplemental
Indenture pursuant to which such Subsidiary will guarantee payment of
the Notes due 2012 and any Securities of any Other Affected Series.
SECTION 1012 Release of Guaranty.
Notwithstanding anything to the contrary in Section 1011, in
the event that any Subsidiary that has guaranteed the Notes due 2012
and/or the Securities of such Other Affected Series pursuant to Section
1011 shall no longer be a guarantor of any Funded Debt of the
Partnership other than the Notes due 2012 and/or the Securities of such
Other Affected Series, and so long as no Default or Event of Default
with respect to the Notes due 2012 shall have occurred or be
continuing, such Subsidiary, upon giving written notice to the Trustee
to the foregoing effect, shall be deemed to be released from all of its
obligations in respect of the Notes due 2012 and/or the Securities of
such Other Affected Series, and its guarantee thereof and this
Indenture without further act or deed and such guarantee of such
Subsidiary shall be terminated and of no further force or effect.
Following the receipt by the Trustee of any such notice, the
Partnership shall cause this Indenture to be amended as provided in
Section 901 to evidence such release and termination; provided,
however, that the failure to so amend this
6
Indenture shall not affect the validity of the release and termination
of such guarantee of such Subsidiary.
SECTION 1013 Change of Control.
Upon the occurrence of a Change of Control, the Partnership
will make an offer to purchase all or any part (equal to $1,000 or an
integral multiple thereof) of the Notes due 2012 and/or the Securities
of such Other Affected Series pursuant to the offer described below
(the "Change of Control Offer") at a price in cash (the "Change of
Control Payment") equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of
purchase. Within 30 days following any Change of Control, the
Partnership will mail a notice to each Holder of Notes due 2012 and/or
the Securities of such Other Affected Series, with a copy to the
Trustee, with the following information:
(1) a Change of Control Offer is being made pursuant to this
Section 1013 and that all Notes due 2012 and/or the Securities of such
Other Affected Series, properly tendered pursuant to such Change of
Control Offer will be accepted for payment;
(2) the purchase price and the purchase date, which will be no
earlier than 30 days nor later than 60 days from the date such notice
is mailed, except as may be otherwise required by applicable law (the
"Change of Control Payment Date");
(3) any Notes due 2012 and/or the Securities of such Other
Affected Series not properly tendered will remain outstanding and
continue to accrue interest;
(4) unless the Partnership defaults in the payment of the
Change of Control Payment, all Notes due 2012 and/or the Securities of
such Other Affected Series accepted for payment pursuant to the Change
of Control Offer will cease to accrue interest on the Change of Control
Payment Date;
(5) Holders electing to have any Notes due 2012 and/or the
Securities of such Other Affected Series purchased pursuant to a Change
of Control Offer will be required to surrender the same, with the form
entitled "Option of Holder to Elect Purchase" on the reverse thereof
completed, to the paying agent specified in the notice at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) Holders will be entitled to withdraw their tendered Notes
due 2012 and/or Securities of such Other Affected Series and their
election to require the Partnership to purchase the same, provided that
the paying agent receives, not later than the close of business on the
last day of the Offer Period (as defined below), a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes due 2012 and/or Securities of such Other
Affected Series tendered for purchase, and a statement that such Holder
is
7
withdrawing his tendered Notes due 2012 and/or Securities of such Other
Affected Series and his election to have the same purchased; and
(7) that Holders whose Notes due 2012 and/or Securities of
such Other Affected Series are being purchased only in part will be
issued new Notes due 2012 and/or Securities of such Other Affected
Series equal in principal amount to the unpurchased portion of the
Notes due 2012 and/or Securities of such Other Affected Series
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
The Change of Control Offer shall remain open for a period of
20 Business Days following commencement except to the extent a longer
period is required by applicable law (the "Offer Period"). The
Partnership will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection
with the repurchase of the Notes due 2012 and/or Securities of such
Other Affected Series pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations
conflict with the provisions of this Indenture, the Partnership will
comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations described in this
Indenture by virtue thereof.
On the Change of Control Payment Date, to the extent permitted
by law, the Partnership will
(1) accept for payment all Notes due 2012 and/or Securities of
Other Affected Series or portions thereof properly tendered pursuant to
the Change of Control Offer,
(2) deposit with the paying agent an amount equal to the
aggregate Change of Control Payment in respect of all Notes due 2012
and/or Securities of Other Affected Series or portions thereof so
tendered, and
(3) deliver, or cause to be delivered, to the Trustee for
cancellation the Notes due 2012 and/or Securities of Other Affected
Series so accepted together with an Officers' Certificate stating that
such Notes due 2012 and/or Securities of Other Affected Series or
portions thereof have been tendered to and purchased by the
Partnership. The paying agent will promptly mail to each Holder of
Notes due 2012 and/or Securities of Other Affected Series, the Change
of Control Payment for the same and the Trustee will promptly
authenticate and mail to each Holder a new Security of like series and
terms as, and equal in principal amount to any unpurchased portion of
the Security surrendered, if any, provided, that each such new Security
will be in a principal amount of $1,000 or an integral multiple
thereof. The Partnership will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change
of Control Payment Date.
8
SECTION 2.04 Events of Default.
The period following clause (7) of Section 501 of the Original
Indenture shall be replaced with "; or" and the following additional Event of
Default shall be added to those set forth in clauses (1)-(7) of Section 501 of
the Original Indenture in relation only to the Notes due 2012 and the Securities
of any Other Affected Series:
"(8) failure to pay any Debt of the Partnership in excess of
$10 million, whether at final maturity (after the expiration of any
applicable grace periods) or upon acceleration of the maturity thereof,
if such indebtedness is not discharged, or such acceleration is not
annulled, within 10 days after there has been given, by registered or
certified mail, to the Partnership by the Trustee or to the Partnership
and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Notes due 2012, or of the Securities of any Other
Affected Series, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder."
ARTICLE III
MISCELLANEOUS
SECTION 3.01 Execution as Supplemental Indenture. This First
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof. Except as
herein expressly otherwise defined, the use of the terms and expressions herein
is in accordance with the definitions, uses and constructions contained in the
Original Indenture.
SECTION 3.02 Responsibility for Recitals, Etc. The recitals herein and
in the Notes due 2012 (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Partnership, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee makes no representations
as to the validity or sufficiency of this First Supplemental Indenture or of the
Notes due 2012. The Trustee shall not be accountable for the use or application
by the Partnership of the Notes due 2012 or of the proceeds thereof.
SECTION 3.03 Provisions Binding on Partnership's and Guarantor's
Successors. All the covenants, stipulations, promises and agreements in this
First Supplemental Indenture contained by each of the Partnership and the
Guarantor shall bind its respective successors and assigns whether so expressed
or not.
SECTION 3.04 Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE AND EACH
NOTE DUE 2012 SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
SECTION 3.05 Execution and Counterparts. This First Supplemental
Indenture may be executed with counterpart signature pages or in any number of
counterparts, each of
9
which shall be an original but such counterparts shall together constitute but
one and the same instrument.
SECTION 3.06 Capitalized Terms. Capitalized terms not otherwise defined
in this First Supplemental Indenture shall have the respective meanings assigned
to them in the Original Indenture.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.)
10
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
Partnership:
VALERO LOGISTICS OPERATIONS, L.P.
By: Valero GP, Inc.,
Its General Partner
By: /s/ Curtis V. Anastasio
-----------------------------------------
Name: Curtis V. Anastasio
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
Guarantor:
VALERO L.P.
By: Riverwalk Logistics, L.P.
Its General Partner
By: Valero GP, LLC,
Its General Partner
By: /s/ Curtis V. Anastasio
-----------------------------------------
Name: Curtis V. Anastasio
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
Trustee:
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ Remo J. Reale
---------------------------------------------
Name: Remo J. Reale
-------------------------------------------
Title: Vice President
------------------------------------------
11
EXHIBIT A
[FORM OF SECURITY][FACE OF SECURITY]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, TRANSFER OF, OR IN EXCHANGE
FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE PARTNERSHIP OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
VALERO LOGISTICS OPERATIONS, L.P.
6 7/8% SENIOR NOTE DUE 2012
NO. U.S.$
-------------- ---------------
CUSIP NO.
--------------
VALERO LOGISTICS OPERATIONS, L.P., a Delaware limited partnership
(herein called the "Partnership," 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 July 15,
2012, and to pay interest thereon from July 15, 2002, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on January 15 and July 15 in each year, commencing January 15,
2003 at the rate of 6 7/8% per annum, until the principal hereof is paid or made
available for payment, and at the rate of 6 7/8% per annum on any overdue
principal and premium 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 Security 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. A "Business Day" shall mean, when used with respect to any
Place of Payment, each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law, executive order or regulation to close. 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
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
January 1 or July 1 (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 may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
- ----------
(1) Insert in Global Securities only.
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to any Special Record Date, or 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 Securities of this series 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.
[Payment of the principal of (and premium, if any) and interest on this
Security will be made by transfer of immediately available funds to a bank
account in the Borough of Manhattan, The City 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.](2)
[Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Partnership maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Partnership by United States Dollar
check mailed to the addresses of the Persons entitled thereto as such addresses
shall appear in the Security Register or by transfer to a United States Dollar
account maintained by the payee with a bank in The City of New York (so long as
the applicable Paying Agent has received proper transfer instructions in writing
by the Record Date prior to the applicable Interest Payment Date).](3)
Reference is hereby made to the further provisions of this Security 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 Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
- ----------
(2) Insert in Global Securities only.
(3) Insert in Definitive Securities only.
A-2
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated:
---------------------------
VALERO LOGISTICS OPERATIONS, L.P.
By: Valero GP, Inc.
Its General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated:
---------------------------
THE BANK OF NEW YORK, AS TRUSTEE
By:
--------------------------------------
Authorized Signatory
A-3
[FORM OF REVERSE OF SECURITY]
VALERO LOGISTICS OPERATIONS, L.P.
6 7/8% SENIOR NOTE DUE 2012
This Security is one of a duly authorized issue of senior securities
of the Partnership (herein called the "Securities"), issued and to be issued
in one or more series under an Indenture dated as of July 15, 2002 (the
"Indenture"), among the Partnership, the Guarantor (defined below) and The Bank
of New York, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Partnership, the Guarantor, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. As provided in the Indenture, the 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 Security is one of the series designated
on the face hereof.
This Security is the senior unsecured obligation of the Partnership and
is guaranteed pursuant to a guarantee (the "Guarantee") by Valero L.P., a
Delaware limited partnership (the "Guarantor"). The Guarantee is the senior
unsecured obligation of the Guarantor.
The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail, at any time as a whole or from
time to time in part, at the election of the Partnership at a Redemption Price
equal to the greater of (1) 100% of the principal amount of this Security then
Outstanding to be redeemed, or (2) the sum of the present values of the
remaining scheduled payments of principal and interest thereon (exclusive of the
payment of interest accrued to the Redemption Date) computed by discounting such
payments from their respective scheduled dates of payment to the Redemption Date
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at a rate equal to the sum of 30 basis points plus the Adjusted
Treasury Rate on the third Business Day prior to the Redemption Date, as
calculated by an Independent Investment Banker, plus accrued and unpaid
interest, up to, but not including, the Redemption Date.
For purposes of determining the Redemption Price, the following
definitions are applicable:
"Adjusted Treasury Rate" means the yield, under the heading which
represents the average for the week immediately preceding the week of
publication, appearing in the then 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 contains yields
on actively traded U.S. 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 this Security, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue will be
determined and the Adjusted Treasury Rate will be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month); or if
such release (or any successor release) is not published during the week
including or immediately 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.
"Comparable Treasury Issue" means the U.S. Treasury security selected
by an Independent Investment Banker as having a maturity comparable to the
remaining term of this Security 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 this
Security, or, if, in the reasonable judgment of the Independent Investment
Banker, there is no such security, then the Comparable Treasury Issue will mean
the U.S. Treasury security or securities selected by the Independent Investment
Banker as having an actual or interpolated maturity or maturities comparable to
the remaining term of this Security.
A-4
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for the third Business Day prior to the applicable
Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer
than five such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Independent Investment Banker" means J.P. Morgan Securities Inc. and
any successor firm selected by the Partnership, or if any such firm is unwilling
or unable to serve as such, an independent investment banking institution of
national standing appointed by the Partnership.
"Reference Treasury Dealer" means each of up to five dealers to be
selected by the Partnership; provided that if any of the foregoing ceases to be,
and has no affiliate that is, a primary U.S. governmental securities dealer (a
"Primary Treasury Dealer"), the Partnership will substitute for it another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for this Security, the
average, as determined by the Independent Investment Banker, 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 Independent
Investment Banker and the Partnership at 5:00 p.m., New York City time, on the
third Business Day preceding such Redemption Date.
In the case of any redemption of Securities, interest installments due
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more predecessor Securities, of record at the close of
business on the relevant record date referred to on the face hereof. Securities
(or portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and 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 Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
Upon the occurrence of a Change of Control, the Partnership will make
an offer to purchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Securities of this series (the "Change of Control
Offer") at a price in cash equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, thereon to the date of
purchase. Within 30 days following any Change of Control, the Partnership will
mail a notice to each such Holder of Securities of this series setting forth the
procedures governing the Change of Control Offer as required by the Indenture
and information regarding such other matters as is required under and as more
fully provided in Section 1013 of the Indenture. As more fully provided in
Section 1013 of the Indenture, the Holder of this Security may elect to have
this Security or a portion hereof in an authorized denomination purchased by
completing the form entitled "Option of Holder to Elect Purchase" appearing
below and tendering this Security pursuant to the Change of Control Offer.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the Guarantor and any Subsidiary Guarantor and the rights of
the Holders of the Securities of each series to be affected under the Indenture
at any time by the Partnership and the Guarantor and any Subsidiary Guarantor
and the Trustee with the consent of the Holders of a majority in principal
amount of the Securities at the time Outstanding of all series to be affected
(voting as one class). The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Partnership or the Guarantor with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security 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 Security.
A-5
As provided in and subject to the provisions of the Indenture, the
Holder of this Security 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
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series 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
Securities of this series 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 Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Partnership,
which is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place(s) and rate, and in the coin or
currency, herein prescribed.
[This Global Security or portion hereof may not be exchanged for
Definitive Securities of this series 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 hereof for any
purpose under the Indenture.](4)
[As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Partnership in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Partnership and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
a like aggregate principal amount, will be issued to the designated transferee
or transferees.](5)
The Securities of this series 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 Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series 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 Partnership may require payment of a sum sufficient to
cover any transfer tax or other similar governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, regardless of whether this Security be overdue, and neither
the Partnership, the Trustee nor any such agent shall be affected by notice to
the contrary.
Obligations of the Partnership under the Indenture and the Securities
thereunder, including this Security, are non-recourse to Valero GP, Inc. (the
"General Partner") and the general partner of the Guarantor, as applicable, and
their Affiliates (other than the Partnership and the Guarantor), and payable
only out of cash flow and assets of the Partnership or the Guarantor, as the
case may be. The Trustee, and each Holder of a Security by its acceptance
hereof, will be deemed to have agreed in the Indenture that (1) neither the
General Partner, the general partner of the Guarantor nor their respective
assets (nor any of its Affiliates other than the Partnership and the Guarantor,
nor their respective assets) shall be liable for any of the obligations of the
Partnership or the Guarantor under the Indenture or
- ----------
(4) Insert in Global Securities only.
(5) Insert in Definitive Securities only.
A-6
such Securities, including this Security, and (2) no director, officer,
employee, stockholder or unitholder, as such, of the Partnership, the Guarantor,
the Trustee, the General Partner, the general partner of the Guarantor or any
Affiliate of any of the foregoing entities shall have any personal liability in
respect of the obligations of the Partnership or the Guarantor under the
Indenture or such Securities by reason of his, her or its status.
The Indenture provides that the Partnership and the Guarantor (a) will
be discharged from any and all obligations in respect of the Securities (except
for certain obligations described in the Indenture), or (b) need not comply with
certain restrictive covenants of the Indenture, in each case if the Partnership
deposits, in trust, with the Trustee money or U.S. Government Obligations (or a
combination thereof) which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, in an amount
sufficient to pay all the principal of and interest of the Securities, but such
money need not be segregated from other funds except to the extent required by
law.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the 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 VALERO LOGISTICS OPERATIONS, L.P. and does hereby
irrevocably constitute and appoint ________________________ Attorney to transfer
said instrument on the books of the within-named Partnership, with full power of
substitution in the premises.
Please Insert Social Security or
Other Identifying Number of Assignee:
- ------------------------------------- -------------------------------------
Dated:
------------------------------- -------------------------------------
(Signature)
Signature Guarantee:
------------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
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.](6)
- ----------
(6) Insert this assignment form as a separate page in Definitive Securities
only.
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Partnership
pursuant to Section 1013 of the Indenture, check the box below:
[ ] Section 1013
If you want to elect to have only part of the Security purchased by the
Partnership pursuant to Section 1013 of the Indenture, state the amount you
elect to have purchased.
$ Your Signature:
---------------- --------------------------------------------
(sign exactly as your name appears on the
face of the Note)
Date: Tax Identification No.:
------------ ------------------------------------
Signature Guarantee:
---------------------------------------
GUARANTEE
The Guarantor (which term includes any successor Person in such
capacity under the Indenture), has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, the due and punctual payment of the principal of,
and premium, if any, and interest on the Securities and all other amounts due
and payable under the Indenture and the Securities by the Partnership.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantees and the Indenture are expressly set forth
in Article XIV of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee.
Guarantor:
VALERO L.P.
By: Riverwalk Logistics, L.P.
Its General Partner
By: Valero GP, LLC,
Its General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
A-8
EXHIBIT B
[FORM OF SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE, dated as of __________ __, _____ (the
"Supplemental Indenture"), among (i) VALERO LOGISTICS OPERATIONS, L.P., a
Delaware limited partnership (the "Partnership"), (ii) VALERO L.P., a Delaware
limited partnership (the "Guarantor"), (iii) [Name of Subsidiary Guarantor], a
____________________________ and a subsidiary of the Partnership (the
"Subsidiary Guarantor") and (iv) [Name of Trustee], a
___________________________, as trustee (the "Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership and the Guarantor have heretofore executed and
delivered to the Trustee the Indenture dated as of July 15, 2002 (the
"Original Indenture"), providing for the issuance from time to time of one or
more series of the Partnership's unsecured senior debentures, notes or other
evidences of indebtedness (the "Securities"), to be guaranteed by the Guarantor,
and the terms of which are to be determined as set forth in Section 301 of the
Original Indenture.
Pursuant to the provisions of Sections 201, 301 and 901 of the Original
Indenture, as the same has been and may from time to time hereafter be amended
and supplemented (as at any time so amended and supplemented, the "Indenture"),
the Partnership has established one or more series of Securities (herein called
"Securities of the Affected Series") to which the amendments of the Original
Indenture contained in Article II of the First Supplemental Indenture thereto
dated July 15, 2002 (the "First Supplemental Indenture") have been made
applicable, and Section 1011 of the Indenture provides that under certain
circumstances the Partnership is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Subsidiary Guarantor shall guarantee the payment of the Securities of the
Affected Series pursuant to a guarantee on the terms and conditions set forth
herein.
Pursuant to Section 901 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.
Now, Therefore, This Supplemental Indenture Witnesseth:
That in consideration of the premises and the issuance of the
Securities of the Affected Series, the Partnership, the Guarantor, the
Subsidiary Guarantor and the Trustee mutually covenant and agree, for the equal
and proportionate benefit of all Holders of the Securities of the Affected
Series, as follows:
ARTICLE I
AMENDMENTS TO THE INDENTURE
The amendments and supplements contained herein shall apply to the
Securities of the Affected Series only and not to any other series of Securities
issued under the Indenture, and any covenants provided herein are expressly
being included solely for the benefit of the Securities of the Affected Series
and the Holders thereof. These amendments and supplements shall be effective
only for so long as there remains any Securities of the Affected Series
Outstanding.
SECTION 1.01 Definitions. Section 101 of the Indenture is amended and
supplemented by inserting in the appropriate alphabetical position, the
following definition:
"Securities of the Affected Series" means the Notes due 2012 and
Securities of each other series to which the amendments of the Original
Indenture contained in Article II of the First Supplemental Indenture have been
made applicable.
SECTION 1.02 Unconditional Guarantee. Unless such amendment shall have
been effected by a previous supplemental indenture, the Indenture shall be
amended and supplemented by inserting the following new Article XV immediately
after Article XIV of the Indenture:
"ARTICLE XV
SECTION 1501. Unconditional Guarantee.
For value received, each Subsidiary Guarantor hereby fully,
irrevocably, unconditionally and absolutely guarantees to the Holders
and to the Trustee the due and punctual payment of the principal of,
and premium, if any, and interest on the Securities of the Affected
Series and all other amounts due and payable under this Indenture and
the Securities of the Affected Series by the Partnership (including,
without limitation, all costs and expenses (including reasonable legal
fees and disbursements) incurred by the Trustee or the Holders in
connection with the enforcement of this Indenture and the Subsidiary
Guarantees) (collectively, the "Indenture Obligations"), when and as
such principal, premium, if any, and interest and such other amounts
shall become due and payable, whether at the Stated Maturity, upon
redemption or by declaration of acceleration or otherwise, according to
the terms of the Securities of the Affected Series and this Indenture.
The guarantees by the Subsidiary Guarantors set forth in this Article
XV are referred to herein as the "Subsidiary Guarantees." Without
limiting the generality of the foregoing, the Subsidiary Guarantors'
liability shall extend to all amounts that constitute part of the
Indenture Obligations and would be owed by the Partnership under this
Indenture and the Securities of the Affected Series but for the fact
that they are unenforceable, reduced, limited, impaired, suspended or
not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving the Partnership.
Failing payment when due of any amount guaranteed pursuant to the
Subsidiary Guarantees, for whatever reason, each Subsidiary Guarantor
will be obligated (to the fullest extent permitted by applicable law)
to pay the same immediately to the Trustee,
B-2
without set-off or counterclaim or other reduction whatsoever (whether
for taxes, withholding or otherwise). Each Subsidiary Guarantee
hereunder is intended to be a general, unsecured, senior obligation of
each Subsidiary Guarantor and will rank pari passu in right of payment
with all indebtedness of such Subsidiary Guarantor that is not, by its
terms, expressly subordinated in right of payment to the Subsidiary
Guarantee of such Subsidiary Guarantor. Each Subsidiary Guarantor
hereby agrees that to the fullest extent permitted by applicable law,
its obligations hereunder shall be full, irrevocable, unconditional and
absolute, irrespective of the validity, regularity or enforceability of
the Securities of the Affected Series, the Subsidiary Guarantees or
this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any provisions hereof
or thereof, any release of any other Subsidiary Guarantor the recovery
of any judgment against the Partnership, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of such Subsidiary Guarantor. Each
Subsidiary Guarantor hereby agrees that in the event of a default in
payment of the principal of, or premium, if any, or interest on any
Securities of the Affected Series or any other amounts payable under
this Indenture and the Securities of the Affected Series by the
Partnership, whether at the Stated Maturity, upon redemption or by
declaration of acceleration or otherwise, legal proceedings may be
instituted by the Trustee on behalf of the Holders or, subject to
Section 507 hereof, by the Holders, on the terms and conditions set
forth in this Indenture, directly against each Subsidiary Guarantor to
enforce its Subsidiary Guarantees without first proceeding against the
Partnership.
To the fullest extent permitted by applicable law, the obligations of
each Subsidiary Guarantor under this Article XV shall be as aforesaid
full, irrevocable, unconditional and absolute and shall not be
impaired, modified, discharged, released or limited by any occurrence
or condition whatsoever, including, without limitation, (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence
or modification of, or any change in, any of the obligations and
liabilities of the Partnership, the Guarantor or any Subsidiary
Guarantor contained in any of the Securities of the Affected Series or
this Indenture, (ii) any impairment, modification, release or
limitation of the liability of the Partnership, the Guarantor, any
Subsidiary Guarantor or any of their estates in bankruptcy, or any
remedy for the enforcement thereof, resulting from the operation of any
present or future provision of any applicable Bankruptcy Law, as
amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the Partnership, the Guarantor, any Subsidiary
Guarantor or the Trustee of any rights or remedies under any of the
Securities or this Indenture or their delay in or failure to assert or
exercise any such rights or remedies, (iv) the assignment or the
purported assignment of any property as security for any of the
Securities, including all or any part of the rights of the Partnership,
the Guarantor or any Subsidiary Guarantor under this Indenture, (v) the
extension of the time for payment by the Partnership, the Guarantor or
any Subsidiary Guarantor of any payments or other sums or any part
thereof owing or payable under any of the terms and provisions of any
of the Securities or this Indenture or of the time for performance by
the Partnership, the Guarantor or any Subsidiary Guarantor of any other
obligations under or arising out of any such terms and provisions or
the extension or the renewal of any thereof, (vi) the modification or
amendment (whether material or otherwise) of any duty, agreement or
obligation of the
B-3
Partnership, the Guarantor or any Subsidiary Guarantor set forth in
this Indenture, (vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of
the assets, marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting, the Partnership, the Guarantor or any
Subsidiary Guarantor or any of their respective assets, or the
disaffirmance of any of the Securities, any of the Subsidiary
Guarantees, the Guarantee or this Indenture in any such proceeding,
(viii) the release or discharge of the Partnership, the Guarantor or
any Subsidiary Guarantor from the performance or observance of any
agreement, covenant, term or condition contained in any of such
instruments by operation of law, (ix) the unenforceability of any of
the Securities, the Subsidiary Guarantees, the Guarantee or this
Indenture, (x) any change in the name, business, capital structure,
corporate existence, or ownership of the Partnership, the Guarantor or
any Subsidiary Guarantor, or (xi) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable
discharge of, a surety or any Subsidiary Guarantor.
To the fullest extent permitted by applicable law, each Subsidiary
Guarantor hereby (i) waives diligence, presentment, demand of payment,
notice of acceptance, filing of claims with a court in the event of the
merger, insolvency or bankruptcy of the Partnership, the Guarantor or
any Subsidiary Guarantor, and all demands and notices whatsoever, (ii)
acknowledges that any agreement, instrument or document evidencing its
Subsidiary Guarantee may be transferred and that the benefit of its
obligations hereunder shall extend to each Holder of the Securities of
the Affected Series without notice to them and (iii) covenants that its
Subsidiary Guarantee will not be discharged except by complete
performance of the Subsidiary Guarantees. Each Subsidiary Guarantor
further agrees that to the fullest extent permitted by applicable law,
if at any time all or any part of any payment theretofore applied by
any Person to each Subsidiary Guarantee is, or must be, rescinded or
returned for any reason whatsoever, including without limitation, the
insolvency, bankruptcy or reorganization of such Subsidiary Guarantor,
such Subsidiary Guarantee shall, to the extent that such payment is or
must be rescinded or returned, be deemed to have continued in existence
notwithstanding such application, and such Subsidiary Guarantee shall
continue to be effective or be reinstated, as the case may be, as
though such application had not been made.
Each Subsidiary Guarantor shall be subrogated to all rights of the
Holders and the Trustee against the Partnership in respect of any
amounts paid by the Subsidiary Guarantor pursuant to the provisions of
this Indenture; provided, however, that such Subsidiary Guarantor shall
not be entitled to enforce or to receive any payments arising out of,
or based upon, such right of subrogation with respect to any of the
Securities of the Affected Series until all of the Securities of the
Affected Series and the Subsidiary Guarantees thereof shall have been
indefeasibly paid in full or discharged.
A director, officer, employee or stockholder, as such, of a Subsidiary
Guarantor shall not have any liability for any obligations of such
Subsidiary Guarantor under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.
B-4
No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under
this Article XV and the Subsidiary Guarantees shall operate as a waiver
thereof, nor shall any single or partial exercise of any rights, power,
privilege or remedy preclude any other or further exercise thereof, or
the exercise of any other rights, powers, privileges or remedies. The
rights and remedies herein provided for are cumulative and not
exclusive of any rights or remedies provided in law or equity. Nothing
contained in this Article XV shall limit the right of the Trustee or
the Holders to take any action to accelerate the maturity of the
Securities of the Affected Series pursuant to Article V or to pursue
any rights or remedies hereunder or under applicable law.
SECTION 1502. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and, by its acceptance of any Securities of
the Affected Series, each Holder, hereby confirms that it is their
intention that the Subsidiary Guarantee by such Subsidiary Guarantor
not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to the Subsidiary Guarantees. To effectuate the
foregoing intention, each such Person hereby irrevocably agrees that
the obligation of such Subsidiary Guarantor under its Subsidiary
Guarantee shall be limited to the maximum amount as shall, after giving
effect to such maximum amount and all other (contingent or otherwise)
liabilities of such Subsidiary Guarantor that are relevant under such
laws, and after giving effect to any rights to contribution of such
Subsidiary Guarantor pursuant to any agreement providing for an
equitable contribution among such Subsidiary Guarantor and other
Affiliates of the Partnership of payments made on account of guarantees
by such parties, result in the obligations of such Subsidiary Guarantor
in respect of such maximum amount not constituting a fraudulent
conveyance. Each Holder of Securities of the Affected Series, by
accepting the benefits hereof, confirms its intention that, in the
event of bankruptcy, reorganization or other similar proceeding of
either of the Partnership or any Subsidiary Guarantor in which
concurrent claims are made upon such Subsidiary Guarantor hereunder, to
the extent such claims shall not be fully satisfied, each such claimant
with a valid claim against the Partnership shall be entitled to a
ratable share of all payments by such Subsidiary Guarantor in respect
of such concurrent claims.
SECTION 1503. Execution and Delivery of Notation of Subsidiary
Guarantees.
To further evidence the Subsidiary Guarantees, the Subsidiary Guarantor
hereby agrees that a notation of such Subsidiary Guarantees in
substantially the form set forth below in Section 1505 shall be
endorsed on each of the Securities of the Affected Series authenticated
and delivered by the Trustee and executed by either manual or facsimile
signature of an officer of the Subsidiary Guarantor; provided that
failure to include such notation on the any of the Securities of the
Affected Series shall not affect the validity of the Subsidiary
Guarantees.
B-5
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantees
shall remain in full force and effect notwithstanding any failure to
endorse on each of the Securities of the Affected Series a notation
relating to the Subsidiary Guarantee thereof.
If an officer of a Subsidiary Guarantor whose signature is on this
Indenture or any of the Securities of the Affected Series no longer
holds that office at the time the Trustee authenticates such Security
or at any time thereafter, the Subsidiary Guarantor's Subsidiary
Guarantee of such Security shall be valid nevertheless.
SECTION 1504. Form Of Notation On Security Relating To Subsidiary
Guarantee.
FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE
The undersigned Subsidiary Guarantor (which term includes any
successor Person in such capacity under the Indenture), has fully,
unconditionally and absolutely guaranteed, to the extent set forth in
the Indenture and subject to the provisions in the Indenture, the due
and punctual payment of the principal of, and premium, if any, and
interest on the Securities of this series and all other amounts due and
payable under the Indenture and the Securities of this series by the
Partnership.
The obligations of the Subsidiary Guarantor to the Holders of
Securities of this series and to the Trustee pursuant to the Subsidiary
Guarantees and the Indenture are expressly set forth in Article XV of
the Indenture and reference is hereby made to the Indenture for the
precise terms of the Subsidiary Guarantee.
Subsidiary Guarantor:
[NAME OF SUBSIDIARY GUARANTOR]
By:
-------------------------------------
Name:
-----------------------------------
Title: "
----------------------------------
ARTICLE II
MISCELLANEOUS
SECTION 2.01 Execution as Supplemental Indenture. By its execution and
delivery of this Supplemental Indenture, the undersigned Subsidiary Guarantor
agrees to be bound by the provisions of the Indenture, including those of
Article XV thereof, as the same relate to the Notes due 2012 and all other
Securities of the Affected Series. This Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Indenture and, as
provided in the Indenture, this Supplemental Indenture forms a part thereof.
Except as herein expressly otherwise defined, the use of the terms and
expressions herein is in accordance with the definitions, uses and constructions
contained in the Indenture.
SECTION 2.02 Responsibility for Recitals, Etc. The recitals herein and
in the Securities of the Affected Series (except in the Trustee's certificate of
authentication) shall be
B-6
taken as the statements of the Partnership, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee makes no representations
as to the validity or sufficiency of this Supplemental Indenture or of the
Securities of the Affected Series. The Trustee shall not be accountable for the
use or application by the Partnership of the Securities of the Affected Series
or of the proceeds thereof.
SECTION 2.03 Provisions Binding on Partnership's Guarantor's and
Subsidiary Guarantor's Successors. All the covenants, stipulations, promises and
agreements in this Supplemental Indenture contained by the Partnership with the
Guarantor or the undersigned Subsidiary Guarantor shall bind its successors and
assigns whether so expressed or not.
SECTION 2.04 Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 2.05 Execution and Counterparts. This Supplemental Indenture
may be executed with counterpart signature pages or in any number of
counterparts, each of which shall be an original but such counterparts shall
together constitute but one and the same instrument.
SECTION 2.06 Capitalized Terms. Capitalized terms not otherwise defined
in this Supplemental Indenture shall have the respective meanings assigned to
them in the Indenture.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
B-7
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Partnership:
VALERO LOGISTICS OPERATIONS, L.P.
By: Valero GP, Inc.,
Its General Partner
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Guarantor:
VALERO L.P.
By: Riverwalk Logistics, L.P.
Its General Partner
By: Valero GP, LLC,
Its General Partner
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Subsidiary Guarantor:
[NAME OF SUBSIDIARY GUARANTOR]
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
B-8
Trustee:
[NAME OF TRUSTEE], AS TRUSTEE
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
B-9
EXHIBIT 5.1
Andrews & Kurth
Mayor, Day & Caldwell L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
July 15, 2002
Board of Directors
Valero GP, LLC
Valero GP, Inc.
One Valero Place
San Antonio, Texas 78212
Ladies and Gentlemen:
We have acted as special counsel to Valero Logistics Operations, L.P.
(the "Partnership"), a Delaware limited partnership and a 100%-owned direct and
indirect subsidiary of Valero L.P., a Delaware limited partnership ("the
Guarantor"), in connection with (i) the preparation and filing with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), of the Registration Statement on Form S-3 filed
by the Guarantor and the Partnership with the Commission on June 6, 2002 (the
"Registration Statement"), for the purpose of registering under the Act, among
other securities, senior debt securities of the Partnership and the related
guarantees of such senior debt securities by the Guarantor; and (ii) the
preparation of a prospectus supplement dated July 10, 2002 (the "Prospectus
Supplement") in connection with the issuance of $100,000,000 aggregate principal
amount of 6 7/8% Senior Notes Due 2012 of the Partnership (the "Senior Notes")
to be issued under an Indenture dated as of July 15, 2002, among the
Partnership, the Guarantor and The Bank of New York, as trustee, as amended and
supplemented by the First Supplemental Indenture thereto, dated as of July 15,
2002 (as so amended and supplemented, the "Indenture"). The Senior Notes will be
fully and unconditionally guaranteed pursuant to the guarantees by the Guarantor
contained in the Indenture (the "Guarantees") and are being offered, issued and
sold (together with the Guarantees) in an underwritten public offering pursuant
to an underwriting agreement dated July 10, 2002 (the "Underwriting Agreement")
between the Partnership, the Guarantor, Valero GP, Inc., Valero GP, LLC,
Riverwalk Logistics, L.P. (the "Partnership Parties") and the underwriters named
therein.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement, including the form of prospectus included therein (the "Base
Prospectus") and the documents incorporated by reference therein, and the
Prospectus Supplement, (ii) each of the Partnership's and the Guarantor's
agreement of limited partnership, as applicable, each as amended to date, as
well as the governance documents of the other Partnership Parties (iii) the
Indenture, (iv) the Underwriting Agreement and (v) the form of Senior Notes. We
have also examined originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate, and we have made such investigations of law, as
we have deemed appropriate as a basis for the opinions expressed below.
In rendering the opinions expressed below, we have assumed and have not
verified (i) the genuineness of the signatures on all documents that we have
examined, (ii) the legal capacity of all natural persons, (iii) the
Board of Directors
Valero GP, LLC
Valero GP, Inc.
July 15, 2002
Page 2
authenticity of all documents supplied to us as originals, (iv) the conformity
to the originals of all documents supplied to us as certified or photostatic or
faxed copies, and (v) as to the forms of all documents in respect of which forms
were filed with the Commission or incorporated by reference as exhibits to the
Registration Statement, the conformity in all material respects of such
documents to the forms thereof that we have examined. In conducting our
examination, we have assumed that all parties to documents examined by us (other
than the Partnership Parties) had the power, corporate, partnership, limited
liability company or other, to enter into and perform their respective
obligations under such documents and have also assumed the due authorization by
all requisite action, corporate, partnership, limited liability company or
other, and the due execution and delivery by or on behalf of such parties, of
such documents and that, to the extent such documents purport to constitute
agreements, such documents constitute valid and binding obligations of such
parties.
Based upon and subject to the foregoing and subject also to the
limitations, qualifications, exceptions and assumptions set forth herein, we are
of the opinion that when the Senior Notes have been duly executed,
authenticated, issued and delivered in accordance with the provisions of the
Indenture and upon payment of the consideration therefore as provided in the
Underwriting Agreement, the Senior Notes and the Guarantees will constitute
legal, valid and binding obligations of the Partnership and the Guarantor,
respectively, enforceable against the Partnership and the Guarantor in
accordance with their terms, except as may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfer or
conveyance), reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law), including, without limitation (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing, as we express no
opinion herein with respect to provisions relating to severability and
separability.
We express no opinion other than as to the federal laws of the United
States of America and the laws of the State of New York. We hereby consent to
the filing of this opinion as an exhibit to a Current Report of a Form 8-K of
the Partnership, the incorporation by reference of this opinion in the
Registration Statement and the reference to this firm under the caption
"Validity of the notes" in the Prospectus Supplement and under the caption
"Validity of the Securities" in the Base Prospectus, which form a part of the
Registration Statement. In giving this consent, we do not admit that we are
"experts" under the Act or under the rules and regulations of the Commission
relating thereto, with respect to any part of the Registration Statement,
including this exhibit to the Current Report on Form 8-K. This opinion speaks as
of its date, and we undertake no, and hereby disclaim any, duty to advise as to
changes of fact or law coming to our attention after the delivery hereof on such
date.
Very truly yours,
/s/
Andrews & Kurth
Mayor, Day & Caldwell L.L.P.
EXHIBIT 8.1
Andrews & Kurth
Mayor, Day & Caldwell L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
July 15, 2002
Board of Directors
Valero GP, LLC
Valero GP, Inc.
One Valero Place
San Antonio, Texas 78212
RE: $100 MILLION AGGREGATE PRINCIPAL AMOUNT OF 6 7/8% SENIOR NOTES DUE
2012 OF VALERO LOGISTICS OPERATIONS, L.P.
Ladies and Gentlemen:
We have acted as special counsel in connection with the Registration
Statement on Form S-3 (the "Registration Statement") of Valero L.P., a Delaware
limited partnership, and Valero Logistics Operations, L.P. ("Valero Logistics"),
a Delaware limited partnership, relating to the registration of the offering and
sale (the "Offering") of common units ("Common Units") of Valero L.P., debt
securities of Valero Logistics and the related guarantees of the Debt Securities
by Valero L.P. to be issued and sold by each of Valero L.P. and Valero Logistics
as applicable from time to time pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Act"), for an aggregate offering price not to exceed
$500,000,000. In connection therewith, we have participated in the preparation
of the discussion set forth under the caption "Tax Considerations" (the
"Discussion") in the prospectus supplement dated July 10, 2002 (the "Prospectus
Supplement") filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933 relating to the issuance and sale of
$100,000,000 aggregate principal amount of 6 7/8% Senior Notes due 2012 of
Valero Logistics ("Debt Securities"). Capitalized terms used and not otherwise
defined herein are used as defined in the Registration Statement.
The Discussion, subject to the qualifications and assumptions stated
in the Discussion and the limitations and qualifications set forth herein,
constitutes our opinion as to the material United States federal income and
estate tax consequences for purchasers of the Debt Securities pursuant to the
Offering.
This opinion letter is limited to the matters set forth herein, and
no opinions are intended to be implied or may be inferred beyond those expressly
stated herein. Our opinion is rendered as of the date hereof and we assume no
obligation to update or supplement this opinion or any matter related to this
opinion to reflect any change of fact, circumstances, or law after the date
hereof. In addition, our opinion is based on the assumption that the matter will
be properly presented to the applicable court.
Furthermore, our opinion is not binding on the Internal Revenue
Service or a court. In addition, we must note that our opinion represents merely
our best legal judgment on the matters presented and that others may disagree
with our conclusion. There can be no assurance that the Internal Revenue Service
will not take a contrary position or that a court would agree with our opinion
if litigated.
We hereby consent to the filing of this opinion as an exhibit to a
Current Report on Form 8-K of Valero Logistics, the incorporation by reference
of this opinion in the Registration Statement and the references to our firm and
this opinion contained in the Prospectus Supplement forming a part of the
Registration Statement. In giving this consent, however, we do not hereby admit
that we are within the category of persons whose consent is required under
section 7 of the Act, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ ANDREWS & KURTH
MAYOR, DAY & CALDWELL L.L.P.
EXHIBIT 10.1
$100,000,000
VALERO LOGISTICS OPERATIONS, L.P.
6-7/8% SENIOR NOTES DUE 2012
GUARANTEED BY
VALERO L.P.
Underwriting Agreement
July 10, 2002
J.P. Morgan Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Valero Logistics Operations, L.P., a Delaware limited partnership (the
"Operating Partnership"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the Underwriters listed in Schedule 1 hereto (the
"Underwriters"), $100.0 million in aggregate principal amount of its 6-7/8%
Senior Notes due 2012 (the "Securities") to be issued pursuant to the terms of
an Indenture (the "Base Indenture") among the Operating Partnership, Valero
L.P., a Delaware limited partnership (the "Partnership") and The Bank of New
York, as trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture thereto relating to the Securities (the "Supplemental Indenture"). The
Base Indenture, as amended and supplemented by the Supplemental Indenture, is
herein referred to as the "Indenture." The Securities will be guaranteed on a
senior unsecured basis (the "Guarantee") by the Partnership (in its capacity as
such, the "Guarantor").
Riverwalk Logistics, L.P., a Delaware limited partnership, is the
general partner of the Partnership (the "General Partner"). Valero GP, LLC, a
Delaware limited liability company ("Valero GP") and an indirect wholly owned
subsidiary of Valero Energy Corporation, a Delaware corporation ("Valero
Energy"), is the general partner of the General Partner. Valero GP, Inc., a
Delaware corporation and a direct wholly owned subsidiary of the Partnership, is
the general partner of the Operating Partnership (the "OLP General Partner").
UDS Logistics, LLC, a Delaware limited liability company and an indirect wholly
owned
subsidiary of Valero Energy, is the sole limited partner of the General Partner
and a limited partner of the Partnership ("UDS Logistics"). The Partnership, the
Operating Partnership, the General Partner, Valero GP and the OLP General
Partner are hereinafter referred to collectively as the "Partnership Parties."
The Partnership Parties and Skelly-Belvieu Pipeline Company, L.L.C., a Delaware
limited liability company ("Skelly-Belvieu LLC"), are hereinafter referred to
collectively as the "Partnership Entities." Valero Energy, UDS Logistics and the
Partnership Entities are hereinafter referred to collectively as the "Valero
Entities."
The term "Operative Agreement" when used herein shall mean and include
any of (i) the Partnership Agreement, the Operating Partnership Agreement, the
General Partner Partnership Agreement, the Skelly-Belvieu Agreement, the Valero
GP LLC Agreement, the UDS Logistics LLC Agreement (as such terms are defined
below), the certificate of incorporation of the OLP General Partner, as amended
or restated at or prior to the Closing Date (as defined below), and the bylaws
of the OLP General Partner, as amended or restated at or prior to the Closing
Date, (ii) the Credit Agreement dated as of December 15, 2000 among the
Operating Partnership, the Lenders party thereto, The Chase Manhattan Bank, as
Administrative Agent, Royal Bank of Canada, as Syndication Agent, Suntrust Bank,
as Documentation Agent and Chase Securities Inc., as Arranger, as amended or
restated at or prior to the Closing Date, (iii) the Omnibus Agreement dated as
of April 16, 2001 among the Partnership, the Operating Partnership, the General
Partner, Valero GP and Valero Energy (successor thereunder to Ultramar Diamond
Shamrock Corporation), as amended or restated at or prior to the Closing Date;
(v) the Pipelines and Terminals Usage Agreement dated as of April 16, 2001 among
Valero Energy (successor thereunder to Ultramar Diamond Shamrock Corporation),
the Partnership, the Operating Partnership, the General Partner and Valero GP,
as amended or restated at or prior to the Closing Date, (vi) the Services
Agreement dated as of July 1, 2000 among Diamond Shamrock Refining and Marketing
Company, the Partnership, the Operating Partnership, the General Partner and
Valero GP, as amended or restated at or prior to the Closing Date and (vii) the
Reorganization Agreement dated as of May 30, 2002, among the Partnership, the
Operating Partnership, the General Partner and the OLP General Partner, as
amended or restated at or prior to the Closing Date.
1. The Partnership Parties, jointly and severally, represent and
warrant to, and agree with, each of the Underwriters that:
(a) The Partnership and the Operating Partnership have prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (Commission File No.
333-89978) (the "registration statement"), including a prospectus subject to
completion relating to the Securities. Such registration statement has been
declared effective by the Commission. The term "Registration Statement" as used
in this Agreement means the registration statement (including all financial
schedules and exhibits), as supplemented or amended prior to the execution of
this Agreement. If it is
2
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If it is contemplated, at
the time this Agreement is executed, that a registration statement or a
post-effective amendment will be filed pursuant to Rule 462(b) or Rule 462(d)
under the Act before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement includes such registration
statement. The term "Basic Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement at the time that
the Registration Statement was declared effective or in the form in which it has
been most recently filed with the Commission on or prior to the date of this
Agreement. "Prospectus" shall mean the prospectus supplement relating to the
Securities and the offering thereof that is first filed pursuant to Rule 424(b)
under the Act ("Rule 424(b)") after the date and time this Agreement is executed
and delivered by the parties hereto, together with the Basic Prospectus. The
term "Preliminary Prospectus" as used in this Agreement means any prospectus
relating to the Securities that omitted information to be included upon pricing
in a form of prospectus filed with the Commission pursuant to Rule 424(b) under
the Act and was used after such effectiveness and prior to the initial delivery
of the Prospectus to the Underwriters.
(b) All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, the Basic Prospectus, a Preliminary Prospectus or
the Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, the Basic
Prospectus, a Preliminary Prospectus or the Prospectus, as the case may be; any
reference in this Agreement to the Registration Statement, the Basic Prospectus,
a Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus or the Prospectus, as the case may be;
and any reference to any amendment or supplement to the Registration Statement,
the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") which, upon filing,
are incorporated by reference therein, as required by paragraph (b) of Item 12
of Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto.
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
3
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Operating Partnership or the Partnership by an Underwriter
through J.P. Morgan Securities Inc. expressly for use therein.
(d) No stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of the Partnership Parties, no
proceeding for that purpose has been initiated or threatened by the Commission.
The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date and on the
Closing Date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to (i) that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act, and (ii) any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Operating
Partnership or the Partnership by an Underwriter through JP Morgan Securities
Inc. expressly for use therein; and each of the statements made by the
Partnership or the Operating Partnership in the Registration Statement, and to
be made in the Prospectus and any further amendments or supplements to the
Registration Statement or Prospectus within the coverage of Rule 175(b) of the
rules and regulations under the Act, including (but not limited to) any
statements with respect to future available cash or future cash distributions of
the Partnership or the Operating Partnership or the anticipated ratio of taxable
income to distributions was made or will be made with a reasonable basis and in
good faith.
(e) As of the applicable effective date of the Registration Statement
and on the Closing Date, the Indenture did or will conform in all material
respects with the applicable requirements of the Trust Indenture Act.
(f) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act; any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act; no such document when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact
4
or will omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(g) None of the Partnership Entities has sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capitalization or long-term debt of any of the
Partnership Entities or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, consolidated financial position, partners' capital,
members' equity, or results of operations of any of the Partnership Entities,
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Partnership Entities has
entered into any transaction or agreement (whether or not in the ordinary course
of business) material to the Partnership Entities, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(h) The Operating Partnership and Skelly-Belvieu LLC have good and
indefeasible title to all real property and good title to all personal property
described in the Prospectus owned by the Partnership Entities, free and clear of
all liens, claims, security interests or other encumbrances except (i) as
described in the Prospectus and (ii) such as do not materially interfere with
the use of such properties taken as a whole as they have been used in the past
and as they are to be used in the future as described in the Prospectus;
provided, that, with respect to title to pipeline rights-of-way, the Partnership
Parties represent only that (A) the Operating Partnership and Skelly-Belvieu LLC
have sufficient title to enable them to use and occupy the pipeline
rights-of-way as they have been used and occupied in the past and are to be used
and occupied in the future as described in the Prospectus and (B) any lack of
title to the pipeline rights-of-way will not have a material adverse effect on
the ability of the Operating Partnership and Skelly-Belvieu LLC to use and
occupy the pipeline rights-of-way as they have been used and occupied in the
past and are to be used and occupied in the future as described in the
Prospectus and will not materially increase the cost of such use and occupation.
All real property and buildings held under lease or license by the Partnership
Entities are held by the Operating Partnership and Skelly-Belvieu LLC under
valid and subsisting and enforceable leases or licenses with such exceptions as
do not materially interfere with the use of such properties taken as a whole as
they have been used in the past and are to be used in the future as described in
the Prospectus.
(i) Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing in good standing as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Delaware LP Act")
with power and authority (partnership and other) to own or lease its properties
and to conduct its business, in each case in all respects as described in the
Registration Statement and the Prospectus. Each of
5
the Partnership and the Operating Partnership is duly registered or qualified as
a foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, partners' equity, members' equity or results of operations of the
Partnership, the Operating Partnership and Skelly-Belvieu LLC, taken as a whole
(a "Material Adverse Effect") or (ii) subject the limited partners of the
Partnership or the Operating Partnership to any material liability or
disability.
(j) Each of Valero GP and Skelly-Belvieu LLC has been duly formed and
is validly existing in good standing as a limited liability company under the
Delaware Limited Liability Company Act (the "Delaware LLC Act") with the limited
liability company power and authority to own or lease its properties and to
conduct its business, in each case in all respects as described in the
Registration Statement and the Prospectus. Each of Valero GP and Skelly-Belvieu
LLC is duly registered or qualified as a foreign limited liability company for
the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership or the Operating Partnership to any material liability or
disability.
(k) The General Partner has been duly formed and is validly existing in
good standing as a limited partnership under the Delaware LP Act with power and
authority (partnership and other) to own or lease its properties, to conduct its
business and to act as general partner of the Partnership, in each case in all
respects as described in the Registration Statement and the Prospectus. The
General Partner is duly registered or qualified as a foreign limited partnership
for the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(l) The OLP General Partner has been duly incorporated and is validly
existing in good standing under the Delaware General Corporation Law (the
"DGCL") with power and authority (corporate and other) to own or lease its
properties, to conduct its business and to act as general partner of the
Operating Partnership, in each case in all respects as described in the
Registration Statement and the Prospectus. The OLP General Partner is duly
registered or qualified as a foreign corporation for the transaction of business
under the laws of each jurisdiction in which the character of the business
conducted by it or the nature or location of the properties owned or leased by
it makes such registration or qualification necessary, except where the failure
so to register or qualify would not (i) have a Material
6
Adverse Effect or (ii) subject the limited partners of the Operating Partnership
to any material liability or disability.
(m) The General Partner is the sole general partner of the Partnership
with a 2.0% general partner interest in the Partnership; such general partner
interest has been duly authorized and validly issued in accordance with the
Partnership Agreement of the Partnership (as the same may be amended or restated
at or prior to the Closing Date, the "Partnership Agreement"); and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(n) As of the date hereof, the issued and outstanding limited partner
interests of the Partnership consist of 9,654,572 Common Units, 9,599,322
Subordinated Units and the Incentive Distribution Rights, as such term is
defined in the Partnership Agreement. UDS Logistics owns 4,424,322 Common Units
and 9,599,322 Subordinated Units (the "Sponsor Units") and the General Partner
owns all of the Incentive Distribution Rights. All outstanding Common Units,
Subordinated Units and Incentive Distribution Rights and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement, and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Partnership's
registration statement on Form S-1 (No. 333-43668) under the caption "The
Partnership Agreement--Limited Liability," which is incorporated by reference
into the Partnership's registration statement on Form 8-A (File No. 1-16417)
(the "Form 8-A")). UDS Logistics owns the Sponsor Units, and the General Partner
owns the Incentive Distribution Rights, in each case, free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(o) The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and validly
issued in accordance with the Partnership Agreement of the Operating Partnership
(as the same may be amended or restated at or prior to the Closing Date, the
"Operating Partnership Agreement"); and the OLP General Partner owns such
general partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(p) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described or
incorporated by reference into the Form 8-A); and the Partnership owns such
limited partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(q) The Operating Partnership owns a 50% profits interest and a 49%
capital interest in Skelly-Belvieu LLC (the "Skelly-Belvieu Interests"); such
interests are duly
7
authorized and validly issued in accordance with the Members Agreement of
Skelly-Belvieu LLC (as the same may be amended at or prior to the Closing Date,
the "Skelly-Belvieu Agreement"), and are fully paid (to the extent required
under the Skelly-Belvieu Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and
the Operating Partnership owns such interests free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(r) Valero GP is the sole general partner of the General Partner with a
0.1% general partner interest in the General Partner; such general partner
interest has been duly authorized and validly issued in accordance with the
Partnership Agreement of the General Partner (as the same may be amended or
restated at or prior to the Closing Date, the "General Partner Partnership
Agreement"), and Valero GP owns such general partner interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims.
(s) UDS Logistics is the sole limited partner of the General Partner
with a 99.9% limited partner interest in the General Partner; such limited
partner interest has been duly authorized and validly issued in accordance with
the General Partner Partnership Agreement and will be fully paid (to the extent
required under the General Partner Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware LP Act) and UDS Logistics owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(t) Valero Energy indirectly, through one or more direct or indirect
wholly owned subsidiaries, owns a 100% member interest in each of Valero GP and
UDS Logistics; such member interests are duly authorized and validly issued in
accordance with the respective limited liability company agreements of Valero GP
and UDS Logistics (in each case, as the same may be amended or restated at or
prior to the Closing Date, the "Valero GP LLC Agreement" and the "UDS Logistics
LLC Agreement", respectively), and are fully paid (to the extent required under
the Valero GP LLC Agreement and the UDS Logistics LLC Agreement, as applicable)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and such member interests are owned free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(u) Other than (i) the Partnership's ownership of its limited partner
interest in the Operating Partnership and the stock of the OLP General Partner
and (ii) the Operating Partnership's ownership of the Skelly-Belvieu Interests,
neither the Partnership nor the Operating Partnership owns, and at the Closing
Date, neither will own, directly or indirectly, any equity or long-term debt
securities of any corporation, partnership, limited liability company, joint
venture, association or other entity. Other than (i) the General Partner's
ownership of its partnership interests in the Partnership and (ii) the OLP
General Partner's ownership of its partnership interests in the Operating
Partnership, neither the General Partner nor the OLP General Partner owns, and
at the Closing Date neither will own, directly
8
or indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity.
(v) Neither the filing of the Registration Statement nor the offering
or sale of the Securities (including the related Guarantee) as contemplated by
this Agreement gives rise to any rights for or relating to the registration of
any Securities or other securities of any of the Partnership Entities other than
as have been waived.
(w) The Operating Partnership has all requisite power and authority to
execute and deliver this Agreement and the Indenture and to execute, deliver,
issue and sell the Securities and to perform its obligations hereunder and
thereunder; the Guarantor has all requisite power and authority to execute and
deliver this Agreement, the Indenture and the Guarantee and to perform its
obligations hereunder and thereunder (this Agreement, the Indenture, the
Securities and the Guarantee collectively, the "Transaction Documents"). All
corporate, partnership and limited liability company action, as the case may be,
required to be taken by the Partnership Parties or any of their stockholders,
members or partners for the authorization, execution and delivery of the
Transaction Documents (and in the case of the Securities, for their issuance and
sale) to which any of them is a party and the consummation of the transactions
contemplated hereby and thereby have been validly taken.
(x) This Agreement has been duly authorized, executed and delivered by
each of the Partnership Parties, and constitutes the valid and legally binding
agreement of each of the Partnership Parties, enforceable against each of the
Partnership Parties in accordance with its terms, provided that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(y) The Indenture has been duly qualified under the Trust Indenture
Act, and assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Operating Partnership and the
Guarantor, will constitute the valid and legally binding agreement of each of
the Operating Partnership and the Guarantor, enforceable against each of them in
accordance with its terms; the Securities have been duly and validly authorized
by the Operating Partnership and the Guarantee has been duly and validly
authorized by the Partnership, and, when duly executed, authenticated, issued
and delivered in accordance with the provisions of the Indenture and, in the
case of the Securities, paid for as provided herein, will be duly and validly
issued and outstanding and will constitute the valid and legally binding
obligations of the Operating Partnership and the Guarantor, as the case may be,
enforceable against each of the Operating Partnership and the Guarantor, as the
case may be, in accordance with their terms and entitled to the benefits of the
Indenture; provided that, with respect to each of the Indenture, the Securities
and the Guarantee, the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting
9
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(z) None of (i) the execution, delivery and performance by each of the
Partnership Parties of each of the Transaction Documents to which it is a party,
(ii) the offering, issuance, authentication, sale and delivery of the
Securities, (iii) the issuance of the Guarantee or (iv) the consummation of the
transactions contemplated hereby and thereby (A) conflicted, conflicts or will
conflict with or constituted, constitutes or will constitute a violation of the
certificate of limited partnership, agreement of limited partnership,
certificate of formation, limited liability company agreement, certificate or
articles of incorporation or bylaws or other organizational documents of any of
the Valero Entities, (B) conflicted, conflicts or will conflict with or
constituted, constitutes or will constitute a breach or violation of, or a
default under (or an event which, with notice or lapse of time or both, would
constitute such a default), any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Valero
Entities is a party or by which any of them or any of their respective
properties may be bound, (C) violated, violates or will violate any statute, law
or regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Valero Entities or any of
their properties in a proceeding to which any of them or their property is a
party or (D) resulted, results or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of the Valero
Entities, which conflicts, breaches, violations or defaults, in the case of
clauses (B), (C) or (D), would, individually or in the aggregate, have a
Material Adverse Effect.
(aa) No permit, consent, approval, authorization, order, registration,
filing or qualification ("consent") of or with any court, governmental agency or
body is required for the execution, delivery and performance by each of the
Partnership Parties of each of the Transaction Documents to which it is a party,
the offering, issuance, authentication, sale and delivery of the Securities, the
issuance of the Guarantee, or the consummation of the transactions contemplated
hereby and thereby, except (i) for such consents required under the Act, the
Exchange Act, the Trust Indenture Act and state securities or "Blue Sky" laws,
(ii) for such consents which have been, or prior to the Closing Date will be,
obtained, and (iii) for such consents which, if not obtained, would not,
individually or in the aggregate, have a Material Adverse Effect.
(bb) None of the Partnership Parties is in (i) violation of its
certificate or agreement of limited partnership, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents, (ii) violation in any material respect of any law,
statute, ordinance, administrative or governmental rule or regulation applicable
to it or of any decree of any court or governmental agency or body having
jurisdiction over it or (iii) breach, default (or an event which, with notice or
lapse of time or both, would constitute such a default) or violation in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party
10
or by which it or any of its properties may be bound, which breach, default or
violation, in the case of clause (iii), would, if continued, have a Material
Adverse Effect, or could materially impair the ability of any of the Partnership
Parties to perform their obligations under the Transaction Documents. To the
knowledge of the Partnership Parties, no third party to any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any of
the Partnership Parties is a party or by which any of them is bound or to which
any of their properties is subject, is in default under any such agreement,
which breach, default or violation would, if continued, have a Material Adverse
Effect.
(cc) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes," insofar as they
purport to constitute a summary of the terms of the Securities, the Guarantee
and the Indenture, are fair summaries in all material respects. The Guarantor
has an authorized capitalization as set forth in the Prospectus under the
caption "Capitalization."
(dd) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which any of the Partnership Entities is a
party or of which any property of any of the Partnership Entities is the subject
which, if determined adversely to the Partnership Entities, could reasonably be
expected to, individually or in the aggregate have a Material Adverse Effect
and, to the best of the Partnership Parties' knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(ee) None of the Partnership Entities are, nor, after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof, will be (i) an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
(ii) a "public utility company," "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(ff) Arthur Andersen LLP, who have certified certain financial
statements of the Partnership, the General Partner, and the Operating
Partnership (successor to the Ultramar Diamond Shamrock Logistics Business) are
independent public accountants with respect to the Partnership Entities as
required by the Act and the rules and regulations of the Commission thereunder.
Ernst & Young LLP are independent public accountants with respect to the
Partnership Entities within the meaning of the Act and the rules and regulations
of the Commission thereunder.
(gg) At March 31, 2002, the Partnership would have had, on the
consolidated as adjusted basis indicated in the Prospectus (and any amendment or
supplement thereto), a capitalization as set forth therein. The historical
financial statements (including the related notes and supporting schedules)
included in the Registration Statement, any Preliminary Prospectus and the
Prospectus (and any amendment or supplement thereto) present fairly in all
material respects the financial position, results of operations and cash flows
of the entities purported to be shown thereby on the basis stated therein at the
respective dates or for the
11
respective periods to which they apply and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except to the extent disclosed therein. The selected
historical information included in the Registration Statement, any Preliminary
Prospectus and the Prospectus (and any amendment or supplement thereto) under
the captions "Capitalization," "Selected Financial Data," "Ratio of Earnings to
Fixed Charges" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited historical
consolidated financial statements from which they have been derived. The pro
forma financial statements included in the Registration Statement, any
Preliminary Prospectus and the Prospectus (and any amendment or supplement
thereto) have been prepared in all material respects in accordance with the
applicable accounting requirements of Article 11 of Regulation S-X of the
Commission; the assumptions used in the preparation of such pro forma financial
statements are, in the opinion of the management of the Partnership Entities,
reasonable; and the pro forma adjustments reflected in such pro forma financial
statements, if any, have been properly applied to the historical amounts in
compilation of such pro forma financial statements.
(hh) There are no legal or governmental proceedings pending or, to the
knowledge of the Partnership Parties, threatened, against any of the Partnership
Entities, or to which any of the Partnership Entities is a party, or to which
any of their respective properties is subject, that are required to be described
in the Registration Statement or the Prospectus but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required by the Act.
(ii) Each of the Partnership Entities has such permits, consents,
licenses, franchises, certificates and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own its properties and to
conduct its business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except for such permits
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Partnership Entities has fulfilled and
performed all its material obligations with respect to such permits which are
due to have been fulfilled and performed by such date and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of the holder of
any such permit, except for such revocations, terminations and impairments that
would not, individually or in the aggregate, have a Material Adverse Effect
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Partnership, the
Operating Partnership and Skelly-Belvieu, taken as a whole.
12
(jj) Each of the Operating Partnership and the Partnership (i) makes
and keeps books, records and accounts, which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of assets and (ii)
maintains systems of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(kk) Each of the Partnership Entities has filed (or has obtained
extensions with respect to) all material federal, state and foreign income and
franchise tax returns required to be filed through the date hereof, which
returns are complete and correct in all material respects, and has timely paid
all taxes shown to be due pursuant to such returns, other than those (i) which,
if not paid, would not have a Material Adverse Effect, or (ii) which are being
contested in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles.
(ll) The Partnership Entities (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety and the environment or imposing
liability or standards of conduct concerning any Hazardous Material (as
hereinafter defined) ("Environmental Laws"), (ii) have received all permits
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, except where such noncompliance with Environmental Laws, failure to
receive required permits, or failure to comply with the terms and conditions of
such permits would not, individually or in the aggregate, have a Material
Adverse Effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined in
the Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental Law.
(mm) The Partnership Entities maintain, or are entitled to the benefits
of, insurance covering their properties, operations, personnel and businesses
against such losses and risks as are reasonably adequate to protect them and
their businesses in a manner consistent with other businesses similarly
situated. None of the Partnership Entities has received notice from any insurer
or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance, and all
such insurance is outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date.
13
2. Subject to the terms and conditions herein set forth, (a) the
Operating Partnership agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Operating Partnership the principal amount of Securities set forth opposite the
name of such Underwriter in Schedule 1 hereto, at a purchase price of 99.036% of
the principal amount thereof, plus accrued interest, if any, from July 15, 2002
to the Closing Date.
3. (a) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Operating
Partnership to the Underwriters on July 15, 2002, or at such other time on the
same or such other date, not later than the fifth New York Business Day
thereafter, as the Underwriters and the Operating Partnership may agree upon in
writing. The time and date of such payment is referred to herein as the "Closing
Date". "New York Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
(b) Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes
(collectively, the "Global Note") representing the Securities, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Securities duly paid by the Operating Partnership. The Global Note will be made
available for inspection by the Underwriters at the office of Andrews & Kurth,
Mayor, Day & Caldwell L.L.P., not later than 1:00 p.m., New York City time, on
the New York Business Day prior to the Closing Date.
(c) The documents to be delivered on the Closing Date by or on behalf
of the parties hereto pursuant to Section 6 hereof, including the cross receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 6(i) hereof, will be delivered at the offices of Andrews &
Kurth, Mayor, Day & Caldwell L.L.P., 600 Travis, Suite 4200, Houston, Texas
77002 (the "Closing Location"), and the Securities will be delivered at the
office of The Depository Trust Company or its designated custodian, all at such
time of delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
Houston time, on the New York Business Day next preceding the Closing Date, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto.
4. Each of the Partnership Parties agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or Prospectus (including an amendment
or supplement to any of the documents constituting Incorporated Documents
beginning on the date of this Agreement and for so long as delivery of a
prospectus is required in connection with the offering of the Securities) which
shall be
14
disapproved by you promptly after reasonable notice thereof, unless, in the
judgment of counsel to the Partnership Parties, such amendment is required by
law; to advise you, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Operating
Partnership nor the Guarantor shall be required to qualify as a foreign limited
partnership or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus or the Registration Statement (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated Document)
in order to comply with the Act, the Exchange Act or the Trust Indenture Act to
notify you and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus, supplement to the
Prospectus or other amendment or supplement to the Registration Statement (or to
such document) which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such
15
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to the Partnership's securityholders
and to the Underwriters as soon as practicable an earnings statement of the
Partnership and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations thereunder (including, at
the option of the Partnership, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date seven days after the date of the Prospectus, not to
offer, sell, hedge, contract to sell or otherwise dispose of, except as provided
hereunder, any Securities or any securities of or guaranteed by the Partnership
or the Operating Partnership that are substantially similar to the Securities,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Securities or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement or
pursuant to a bank credit agreement with commercial banks), without your prior
written consent;
(f) To furnish to you, upon request, for a period of three years from
the date of this Agreement, copies of all reports or other communications
(financial or other) furnished to holders of the Securities, provided such
documents are not otherwise publicly available via the Commission's Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR") and to deliver to you,
provided such documents are not otherwise publicly available via EDGAR (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Operating Partnership or the Partnership is
listed; and (ii) such additional information concerning the business and
financial condition of the Operating Partnership or the Partnership as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent they are consolidated in reports furnished to
the holders of the Securities or to the Commission);
(g) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(h) To file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities; and
(i) If the Operating Partnership elects to rely upon Rule 462(b) under
the Act, the Operating Partnership and the Partnership shall file a Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 a.m.,
Washington D.C. time, on the
16
business day following the date of this Agreement, and the Operating Partnership
shall at the time of filing either pay to the Commission the filing fee for such
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
5. Each of the Partnership Parties covenants and agrees with one
another and with the several Underwriters that the Operating Partnership will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Partnership Parties' counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this Agreement,
the Indenture, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses of the Trustee and any paying agent (including fees and expenses of any
counsel to such parties); (v) the fees of any agency that rates the Securities;
(vi) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing, printing, packaging and delivering the
Securities; (viii) the cost and charges of any transfer agent or registrar and
any costs or charges payable in connection with the acceptance of the Securities
for clearance and settlement through the facilities of The Depository Trust
Company; and (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, the Operating Partnership shall
bear the cost of any other matters not directly relating to the sale and
purchase of the Securities pursuant to this Agreement, and that, except as
provided in this Section, and Sections 7 and 10 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
6. The obligations of the Underwriters hereunder, as to the Securities
to be delivered at the Closing Date, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Partnership Parties herein are, at and as of such Closing Date, true and
correct, the condition that the Partnership Parties shall have performed all of
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations
17
under the Act and in accordance with Section 4(a) hereof; if the Operating
Partnership has elected to rely upon Rule 462(b), such Registration Statement
shall have become effective by 10:00 a.m., Washington, D.C. time, on the
business day following the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Baker Botts L.L.P., counsel for the Underwriters, shall have
furnished to you such written opinion or opinions, dated as of the Closing Date,
with respect to the validity of the Indenture and the Securities, the
Registration Statement, the Prospectus and other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Andrews & Kurth, Mayor, Day & Caldwell L.L.P., counsel for the
Partnership Parties, shall have furnished to you their written opinion, dated as
of the Closing Date, in form and substance satisfactory to you, to the effect
that:
(i) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing in good standing as a limited partnership
under the Delaware LP Act with all necessary limited partnership power and
authority to own or lease its properties and to conduct its business, in each
case in all material respects as described in the Registration Statement and the
Prospectus.
(ii) Valero GP has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with all
necessary limited liability company power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(iii) The General Partner has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware LP Act
with all necessary partnership power and authority to own or lease its
properties, to conduct its business and to act as general partner of the
Partnership, in each case in all material respects as described in the
Registration Statement and the Prospectus.
(iv) The OLP General Partner has been duly incorporated and is
validly existing in good standing as a corporation under the DGCL with all
necessary corporate power and authority to own or lease its properties, to
conduct its business and to act as general partner of the Operating Partnership,
in each case in all material respects as described in the Registration Statement
and the Prospectus.
18
(v) The General Partner is the sole general partner of the
Partnership with a 2.0% general partner interest in the Partnership; and such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement.
(vi) The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership; and such general partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement.
(vii) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
and such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described or
incorporated by reference into the Form 8-A under the caption "The Partnership
Agreement -- Limited Liability").
(viii) Valero GP is the sole general partner of the General Partner
with a 0.1% general partner interest in the General Partner; and such general
partner interest has been duly authorized and validly issued in accordance with
the General Partner Partnership Agreement.
(ix) The Operating Partnership has all requisite limited
partnership power and authority to execute and deliver this Agreement and the
Indenture and to execute, deliver, issue and sell the Securities and to perform
its obligations hereunder and thereunder; the Guarantor has all requisite
limited partnership power and authority to execute and deliver this Agreement,
the Indenture and the Guarantee and to perform its obligations hereunder and
thereunder.
(x) This Agreement has been duly executed and delivered by each of
the Partnership Parties.
(xi) The Indenture has been duly qualified under the Trust
Indenture Act and complies as to form in all material respects with the Trust
Indenture Act.
(xii) The Indenture has been duly authorized, executed and
delivered by each of the Operating Partnership and the Guarantor and, assuming
due authorization, execution and delivery thereof by the Trustee, constitutes a
valid and legally binding agreement of each of the Operating Partnership and the
Guarantor, enforceable against each of them in accordance with its terms, except
to the extent that such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance,
19
injunctive relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
(xiii) The Securities have been duly authorized by the Operating
Partnership and the Guarantee has been duly authorized by the Guarantor and,
assuming due authentication thereof by the Trustee and upon payment and delivery
in accordance with this Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of each of
the Operating Partnership and the Guarantor, as the case may be, enforceable
against each of them, as the case may be, in accordance with their terms and
entitled to the benefits of the Indenture, except to the extent that such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally, and (ii) by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good faith and fair
dealing.
(xiv) None of the (i) execution, delivery and performance by each
of the Partnership Parties of each of the Transaction Documents to which it is a
party, (ii) the offering, issuance, authentication, sale and delivery of the
Securities or (iii) the issuance of the Guarantee (A) constituted, constitutes
or will constitute a violation of the certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company agreement, certificate or articles of incorporation or bylaws of any of
the Partnership Entities, (B) constituted, constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such a default), any Operative Agreement
or any other agreement filed as an exhibit to the Registration Statement or to
an Incorporated Document, (C) resulted, results or will result in any violation
of the Delaware LP Act, the Delaware LLC Act, the DGCL, the laws of the State of
Texas, or federal law, or (D) resulted, results or will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
any of the Partnership Entities, which, in the case of clauses (B), (C) or (D),
would reasonably be expected to have a material adverse effect on the financial
condition, business or results of operations of the Partnership, the Operating
Partnership and Skelly-Belvieu LLC, taken as a whole.
(xv) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any federal,
Delaware or Texas court, governmental agency or body is required for the
execution, delivery and performance by each of the Partnership Parties of each
of the Transaction Documents to which it is a party, the offering, issuance,
authentication, sale and delivery of the Securities or the issuance of the
Guarantee except (i) for such consents required under the Act, the Exchange Act,
the Trust Indenture Act and state securities or "Blue Sky" laws, as to which
such counsel need not express any opinion, (ii) for such consents which have
been obtained or made, (iii) for such consents which, if not obtained, would
not, individually or in the aggregate, have a Material Adverse Effect, or (iv)
as disclosed in the Prospectus.
20
(xvi) The statements in the Registration Statement and the
Prospectus under the captions "Tax Considerations," "Description of Debt
Securities" and "Description of Notes" insofar as they constitute descriptions
of agreements or refer to statements of law or legal conclusions, are accurate
in all material respects, and the Indenture, the Securities and the Guarantee
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus under the caption "Description of Debt
Securities."
(xvii) The opinion of Andrews & Kurth, Mayor, Day & Caldwell L.L.P.
that is filed as Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them.
(xviii) The Registration Statement was declared effective under the
Act on June 17, 2002; to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by such Rule.
(xix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Operating Partnership and the
Partnership prior to the Closing Date (other than the financial statements,
notes or schedules included in the Registration Statement or Prospectus or other
financial data included in the Registration Statement or the Prospectus, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations promulgated thereunder; and the Incorporated
Documents filed prior to the Closing Date (other than the financial statements,
notes or schedules or other financial data included in such documents, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder.
(xx) None of the Partnership Parties is an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended, or (ii)
a "public utility company" or "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(xxi) The Operating Partnership is entitled to exercise the power
of eminent domain in the State of Texas to secure rights-of-way necessary to
operate and maintain each of its common carrier pipelines.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Partnership Entities
and the independent public accountants of the Operating Partnership and the
Partnership and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and although
such counsel has not independently verified, is not passing on,
21
and is not assuming any responsibility for the accuracy, completeness or
fairness of the statements contained in, the Registration Statement and the
Prospectus (except to the extent specified in the foregoing opinion), no facts
have come to such counsel's attention that lead such counsel to believe that the
Registration Statement, including the Incorporated Documents (other than (i) the
financial statements and related schedules included therein, including the notes
thereto and auditor's report thereon, (ii) the other information of a financial
or statistical nature included in the Registration Statement and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, including the
Incorporated Documents (other than (i) the financial statements and related
schedules included therein, including the notes thereto and auditor's report
thereon, (ii) the other information of a financial or statistical nature
included in the Prospectus and (iii) the exhibits thereto, as to which such
counsel need not comment), as of its issue date and as of the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Valero
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the authentic originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that their
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL and the laws of the States of Texas and New York, (D) with respect to
the opinions expressed in paragraph (xix) above as to the effectiveness and
absence of stop orders state that such opinions are based upon telephone calls
to the Securities and Exchange Commission on the Closing Date and (E) state that
they express no opinion with respect to state or local taxes or tax statutes to
which any of the limited partners of the Partnership Entities may be subject.
(d) Todd Walker, counsel for the Operating Partnership and the
Partnership, shall have furnished to you his written opinion, dated as of the
Closing Date, in form and substance satisfactory to you, to the effect that:
(i) Skelly-Belvieu LLC has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware LLC Act with
all necessary limited liability company power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(ii) Valero Energy indirectly, through one or more direct or
indirect wholly owned subsidiaries, owns a 100% member interest in Valero GP;
such member interest has been duly authorized and validly issued in accordance
with the Valero GP LLC Agreement, and is fully paid (to the extent required
under the Valero GP LLC Agreement and
22
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act).
(iii) The Operating Partnership owns a 50% profits interest and a
49% capital interest in Skelly-Belvieu LLC; such interests have been duly
authorized and validly issued in accordance with the Skelly-Belvieu Agreement
and are fully paid (to the extent required under the Skelly-Belvieu Agreement)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and, to the knowledge of such counsel without
independent investigation, the Operating Partnership owns such member interest
free and clear of all liens, encumbrances, security interests, charges or
claims.
(iv) To the knowledge of such counsel without independent
investigation, the General Partner owns its general partner interest in the
Partnership free and clear of all liens, encumbrances, security interests,
charges or claims.
(v) To the knowledge of such counsel without independent
investigation, the OLP General Partner owns its general partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
(vi) To the knowledge of such counsel without independent
investigation, the Partnership owns its limited partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
(vii) To the knowledge of such counsel without independent
investigation, Valero GP owns its general partner interest in the General
Partner free and clear of all liens, encumbrances, security interests, charges
or claims.
(viii) To the knowledge of such counsel without independent
investigation, the member interest in Valero GP owned indirectly by Valero
Energy through one or more direct or indirect wholly owned subsidiaries is owned
free and clear of all liens, encumbrances, security interests, charges or
claims.
(ix) None of the (i) execution, delivery and performance by each of
the Partnership Parties of each of the Transaction Documents to which it is a
party, (ii) the offering, issuance, authentication, sale and delivery of the
Securities or (iii) the issuance of the Guarantee (A) constituted, constitutes
or will constitute a violation of the certificate of formation, limited
liability company agreement, certificate or articles of incorporation or bylaws
of UDS Logistics or Valero, (B) constituted, constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such a default), any agreement, lease or
other instrument known to such counsel (excluding any Operative Agreement and
any agreement filed as an exhibit to the Registration Statement or to an
Incorporated Document) to which any of the Partnership Entities or any of their
properties may be bound, (C) to the knowledge of such counsel, resulted, results
or will result in any violation of any order, judgment, decree or injunction of
23
any federal, Texas or Delaware court or government agency or body binding upon
any of the Partnership Entities or any of their properties in a proceeding to
which any of them or their property is a party, or (D) resulted, results or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of UDS Logistics, which in the case of clauses (B), (C) or
(D) would reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the Partnership and
the Operating Partnership, taken as a whole.
(x) To the knowledge of such counsel after due inquiry, none of the
Partnership Parties is in (i) violation of its certificate or agreement of
limited partnership, certificate of formation, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents, or (ii) violation of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it,
or in breach, default (or an event which, with notice or lapse of time or both,
would constitute such a default) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be
bound, which violation or breach, default or violation would, if continued, have
a material adverse effect on the financial condition, business or results of
operations of the Partnership, the Operating Partnership and Skelly-Belvieu LLC,
taken as a whole, or could materially impair the ability of any of the
Partnership Parties to perform their obligations under the Transaction
Documents.
(xi) To the knowledge of such counsel after due inquiry, each of
the Partnership Entities has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its business
in the manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus and except for such permits which, if not
obtained, would not, individually or in the aggregate, have a material adverse
effect upon the ability of the Partnership, the Operating Partnership and
Skelly-Belvieu LLC, taken as a whole, to conduct their businesses in all
material respects as currently conducted or as contemplated by the Prospectus to
be conducted; and, to the knowledge of such counsel after due inquiry, none of
the Partnership Entities has received any notice of proceedings relating to the
revocation or modification of any such permits which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a material adverse effect upon the ability of the
Partnership, the Operating Partnership and Skelly-Belvieu LLC, taken as a whole,
to conduct their businesses in all material respects as currently conducted or
as contemplated by the Prospectus to be conducted.
(xii) (A) There are no legal or governmental proceedings pending
or, to the knowledge of such counsel, threatened against any of the Partnership
Entities or to which any of the Partnership Entities is a party or to which any
of their respective properties is
24
subject that are required to be described in the Prospectus but are not so
described as required and (B) there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required by the Act.
(xiii) Except as described in the Prospectus, there is no
litigation, proceeding or governmental investigation pending or, to the
knowledge of such counsel after due inquiry, threatened against any of the
Partnership Entities or to which any of the Partnership Entities is a party or
to which any of their respective properties is subject, which, if adversely
determined to such Partnership Entities, would reasonably be expected to have a
material adverse effect on the financial condition, business or results of
operations of the Partnership, the Operating Partnership and Skelly-Belvieu LLC,
taken as a whole.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Partnership Entities
and the independent public accountants of the Operating Partnership and the
Partnership and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and although
such counsel has not independently verified, is not passing on, and is not
assuming any responsibility for the accuracy, completeness or fairness of the
statements contained in, the Registration Statement and the Prospectus, no facts
have come to such counsel's attention that lead such counsel to believe that the
Registration Statement, including the Incorporated Documents (other than (i) the
financial statements and related schedules included therein, including the notes
thereto and auditor's report thereon, (ii) the other information of a financial
or statistical nature included in the Registration Statement, and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, including the
Incorporated Documents (other than (i) the financial statements and related
schedules included therein, including the notes thereto and auditor's report
thereon, (ii) the other information of a financial or statistical nature
included in the Prospectus, and (iii) the exhibits thereto, as to which such
counsel need not comment), as of its issue date and as of the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Valero
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to him as originals are authentic, that all copies
submitted to him conform to the originals thereof, and that the signatures on
all documents examined by him are genuine, (C) state that his opinion is limited
to federal laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and the
laws of the State of Texas and (D) state that he expresses no opinion with
respect to state or local
25
taxes or tax statutes to which any of the limited partners of the Partnership
Entities may be subject.
(e) On the date of this Agreement at a time prior to the execution of
this Agreement, and on the Closing Date, each of Arthur Andersen LLP and Ernst &
Young LLP shall have furnished to you letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you and agreed to by
Arthur Andersen LLP and Ernst & Young LLP.
(f) (i) None of the Partnership Entities or any of Valero's McKee,
Three Rivers or Ardmore refineries shall have sustained, since the date of the
latest audited financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus (exclusive of any amendment or supplement
thereto on or after the date of this Agreement) there shall not have been any
change in the capitalization or long-term debt of any of the Partnership
Entities or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity or partners' equity or results of operations of the Partnership, the
Operating Partnership and Skelly-Belvieu LLC, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is in the judgment of the Underwriters so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities of any
Partnership Entity by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any other debt securities of any
Partnership Entity;
(h) The Operating Partnership shall have complied with the provisions
of Section 4(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement;
(i) The Operating Partnership shall have furnished or caused to be
furnished to you on the Closing Date certificates of officers of the OLP General
Partner and Valero GP satisfactory to you as to the accuracy of the
representations and warranties of the Partnership Parties herein at and as of
the Closing Date, as to the performance by the Partnership Parties all of their
obligations hereunder to be performed at or prior to the Closing Date, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as you may reasonably request; and
26
(j) The Indenture shall have been duly executed and delivered by each
of the Operating Partnership, the Guarantor and the Trustee, and the Securities
(including the Guarantee endorsed thereon) shall have been duly executed and
delivered by each of the Operating Partnership and the Guarantor and duly
authenticated by the Trustee.
Notwithstanding anything herein contained, this Agreement may be terminated in
the absolute discretion of the Underwriters, by notice given to the Operating
Partnership or the Partnership, if after the execution and delivery of this
Agreement and prior to the Closing Date any of the following shall have
occurred: (i) a suspension or material limitation in trading in securities
generally on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange or the National Association of Securities Dealers, Inc.;
(ii) a suspension or material limitation in trading in any securities of or
guaranteed by the Partnership or the Operating Partnership on any exchange or in
the over-the-counter market; (iii) a suspension or material limitation in the
trading of the securities of the Partnership; (iv) a general moratorium on
commercial banking activities declared by either Federal or New York or Texas
State authorities; or (v) any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Underwriters, is material and adverse and which, in the judgment of the
Underwriters, makes it impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.
7. (a) The Partnership Parties, jointly and severally, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that each of
the Partnership Parties shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Operating Partnership or the Partnership by
any Underwriter through J.P. Morgan Securities Inc. expressly for use therein;
provided, however, the foregoing indemnity with respect to any untrue statement
contained in or omission from any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting such loss, liability,
claim or damages purchased any of the Securities which are the subject thereof
if the untrue statement contained in or omission from any Preliminary Prospectus
or any Preliminary Prospectus supplement was corrected in a Prospectus (or any
amendment or
27
supplement thereto) but such person was not sent or given a copy of such
Prospectus (or amendment or supplement thereto) at or prior to confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act, unless such failure to deliver such Prospectus (or
amendment or supplement thereto) was a result of non-compliance by the
Partnership Parties with the provisions of Section 4 hereof.
(b) Each Underwriter will severally indemnify and hold harmless the
Partnership Parties against any losses, claims, damages or liabilities to which
any of the Partnership Parties may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Operating
Partnership or the Partnership by such Underwriter through J.P. Morgan
Securities Inc. expressly for use therein; and will reimburse the Partnership
Parties for any legal or other expenses reasonably incurred by the Partnership
Parties in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include
28
a statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership Parties on the one hand and the
Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Partnership Parties on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Partnership Parties on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Operating Partnership bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Partnership Parties on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Each of the
Partnership Parties and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters'
29
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Partnership Parties under this Section 7
shall be in addition to any liability which they may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act or the Exchange Act; and the
obligations of the Underwriters under this Section 7 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of Valero GP
and of the OLP General Partner (including in each case any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of Valero GP or the OLP General Partner) and to each person, if any,
who controls the Partnership Parties within the meaning of the Act or the
Exchange Act.
8. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder on the Closing Date,
you may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the purchase
of such Securities, then the Operating Partnership shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Securities on such terms. In
the event that, within the respective prescribed periods, you notify the
Operating Partnership that you have so arranged for the purchase of such
Securities, or the Operating Partnership notifies you that it has so arranged
for the purchase of such Securities, you or the Operating Partnership shall have
the right to postpone the Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Operating Partnership and the Partnership agree to file
promptly any amendments to the Registration Statement or the Prospectus which in
your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Operating
Partnership as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one-tenth of the aggregate
number of all the Securities to be purchased on the Closing Date, then the
Operating Partnership shall have the right to require each non-defaulting
Underwriter to purchase the number of Securities which such Underwriter agreed
to purchase hereunder on the Closing Date, and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Securities which such Underwriter agreed to purchase hereunder) of the
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
30
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Operating
Partnership as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased exceeds one-tenth of the aggregate number
of all the Securities to be purchased on the Closing Date, or if the Operating
Partnership shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Operating
Partnership, except for the expenses to be borne by the Operating Partnership
and the Underwriters as provided in Section 5 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Partnership Parties and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Operating Partnership or the Partnership, or any officer or director or
controlling person of the OLP General Partner or Valero GP, and shall survive
delivery of and payment for the Securities.
10. If this Agreement shall be terminated pursuant to Section 8 hereof,
the Operating Partnership shall not then be under any liability to any
Underwriter except as provided in Sections 5 and 7 hereof; but, if for any other
reason, any Securities are not delivered by or on behalf of the Operating
Partnership as provided herein, the Operating Partnership will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Operating Partnership shall then be under
no further liability to any Underwriter except as provided in Sections 5 and 7
hereof.
11. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by J.P. Morgan Securities Inc. on behalf of you as the
representative of the several Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the several Underwriters
in care of J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York
10017 (fax: (212) 834-6702), Attention: Transaction Execution Group; and if to
the Operating Partnership and the Partnership shall be delivered or sent by mail
to the address thereof set forth in the Registration Statement, Attention:
Secretary. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
31
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Partnership Parties and, to the extent
provided in Sections 7 and 9 hereof, the officers and directors of the OLP
General Partner and Valero GP and each person who controls or any Underwriter,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
32
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
each of the Partnership Parties.
Very truly yours,
VALERO LOGISTICS OPERATIONS, L.P.
By: Valero GP, Inc., its
general partner
By:
------------------------------------
Curtis V. Anastasio
President and Chief Executive
Officer
VALERO L.P.
By: Riverwalk Logistics, L.P., its
general partner
By: Valero, GP, LLC, its
general partner
By:
--------------------------------
Curtis V. Anastasio
President and Chief Executive
Officer
33
VALERO GP, INC.
By:
----------------------------------------
Curtis V. Anastasio
President and Chief Executive Officer
RIVERWALK LOGISTICS, L.P.
By: Valero GP, LLC,
its general partner
By:
------------------------------------
Curtis V. Anastasio
President and Chief Executive
Officer
VALERO GP, LLC
By:
----------------------------------------
Curtis V. Anastasio
President and Chief Executive Officer
Accepted as of the date hereof:
J.P. Morgan Securities Inc.
- --------------------------------------
(J.P. Morgan Securities Inc.)
On behalf of each of the Underwriters
34
Schedule 1
----------
PRINCIPAL AMOUNT
OF SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
J.P. Morgan Securities Inc. .................................. $58,511,000
Lehman Brothers Inc........................................... 15,957,000
Mizuho International plc...................................... 6,383,000
RBC Dominion Securities Corporation........................... 6,383,000
SunTrust Capital Markets, Inc................................. 6,383,000
Tokyo-Mitsubishi International plc............................ 6,383,000
------------
TOTAL..................................... $100,000,000
============
