DEFEASANCE TRUST AGREEMENT
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THIS DEFEASANCE TRUST AGREEMENT, dated as of December 16, 1997 (this
"Agreement"), between and among Buckeye Pipe Line Company, L.P., a Delaware
limited partnership (the "Company"), and PNC Bank, National Association, a
national banking association (the "Trustee" or the "Escrow Trustee"), and
Douglas A. Wilson, an individual (as "Individual Trustee" and together with the
Trustee, the "Trustees").
WITNESSETH:
WHEREAS, the Company, PNC Bank, National Association (formerly Pittsburgh
National Bank), as Trustee, and Douglas A. Wilson (successor to J.G. Routh), as
Individual Trustee, are parties to that certain Indenture of Mortgage and Deed
of Trust and Security Agreement, dated as of December 15, 1986, as amended by
that certain First Supplemental Indenture of Mortgage and Deed of Trust and
Security Agreement, dated as of December 1, 1987, that certain Second
Supplemental Indenture of Mortgage and Deed of Trust and Security Agreement,
dated as of November 30, 1992, that certain Third Supplemental Indenture of
Mortgage and Deed of Trust and Security Agreement, dated as of December 31,
1993, that certain Fourth Supplemental Indenture of Mortgage and Deed of Trust
and Security Agreement, dated as of March 15, 1994, that certain Fifth
Supplemental Indenture of Mortgage and Deed of Trust and Security Agreement,
dated as of March 30, 1994 (as so amended, the "Original Indenture"; capitalized
terms used herein without definition shall have the meanings assigned to such
terms in the Original Indenture);
WHEREAS, the Company issued and sold under the Original Indenture the
Company's First Mortgage Notes, of which as of the date hereof there presently
remains outstanding the following: (i) $152,100,000 aggregate principal amount
of the Company's 11.18% Series J First Mortgage Notes due 2006 (the "Series J
Notes"), (ii) $11,000,000 aggregate principal amount of the Company's 7.11%
Series K First Mortgage Notes due 2007, (iii) $11,000,000 aggregate principal
amount of the Company's 7.15% Series L First Mortgage Notes due 2008, (iv)
$13,000,000 aggregate principal amount of the Company's 7.19% Series M First
Mortgage Notes due 2009, and (v) $15,000,000 aggregate principal amount of the
Company's 7.93% Series N First Mortgage Notes due 2010 (collectively, the
"Outstanding First Mortgage Notes");
WHEREAS, prior to the date hereof, the Company offered to purchase or
called for redemption, as applicable, all of the Outstanding First Mortgage
Notes from the holders thereof, and all holders of the Outstanding First
Mortgage Notes have accepted such offer to purchase or consented to such
redemption, except those parties (the "Non-Accepting Holders") identified on
Exhibit A, which Non-Accepting Holders hold collectively $10,805,000 of the
aggregate principal amount of the Series J Notes;
WHEREAS, on the date hereof, the Company desires to defease the Series J
Notes held by the Non-Accepting Holders (such Series J Notes are referred to
herein as the "Defeased Notes") in accordance with the provisions of Article
Fourteen of the Original Indenture and, in
connection therewith, to enter into this Agreement with the Trustees to
establish a special trust fund from which the holders of Defeased Notes are to
receive scheduled payments of principal (including, without limitation, payments
of principal in connection with sinking fund payments required by the terms of
the Defeased Notes and the Original Indenture) and interest, in accordance with
the terms of the Defeased Notes.
NOW, THEREFORE, in consideration for the mutual covenants contained herein
and intending to be legally bound hereby, the parties hereto covenant and agree
as follows:
Section 1. Creation of Trust and Defeasance Trust. There is hereby
created and established a special trust fund (the "Defeasance Trust") with the
Escrow Trustee designated "Buckeye Pipe Line Company Series J Notes 1997
Defeasance", which shall be held in trust for the benefit of the holders of the
Defeased Notes, until disbursed in accordance with the provisions hereof. The
Defeasance Trust shall be held by the Escrow Trustee separate and apart from
other funds of the Escrow Trustee and the Company.
Section 2. Escrow Deposit. The Company has deposited in the Defeasance
Trust, and the Escrow Trustee hereby acknowledges receipt of $13,286,450 in
cash in the Defeasance Trust, which amount is to be used to provide for
scheduled payments of principal (including, without limitation, payments of
principal in connection with sinking fund payments required by the terms of the
Defeased Notes and the Original Indenture) and interest on the Defeased Notes in
accordance with the terms thereof. The Escrow Trustee shall invest the
Defeasance Trust solely in obligations of the United States Treasury in the
principal amounts and maturities set forth in Exhibit B attached hereto (such
United States Treasury obligations are referred to herein as the "Escrow
Obligations") and the Escrow Trustee shall hold the Escrow Obligations as part
of the Defeasance Trust to be held in trust for the benefit of the holders of
the Defeased Notes for the purposes described in this Agreement.
Section 3. Application of Escrow Obligations. As shown on Exhibit C
and based upon the verification of Deloitte & Touche LLP, the Escrow Obligations
by their terms mature and bear interest payable in such amounts and at such
times as are required to make scheduled payments from the Defeasance Trust of
principal (including, without limitation, payments of principal in connection
with sinking fund payments required by the terms of the Defeased Notes and the
Original Indenture) and interest in accordance with the terms of the Defeased
Notes as the same shall become due and payable on the due dates set forth in the
Defeased Notes.
Section 4. Irrevocable Instruction to Pay to Holders of Defeased Notes.
The Company hereby irrevocably directs the Escrow Trustee to apply the amounts
received as principal, interest and maturity value of the Escrow Obligations to
the scheduled payments of principal (including, without limitation, payments of
principal in connection with sinking fund payments required by the terms of the
Defeased Notes and the Original Indenture) and interest on the Defeased Notes,
in the amounts and on the respective sinking fund payment, interest payment and
maturity dates set forth therein. The foregoing direction shall include,
without limitation, the
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irrevocable direction and authorization by the Company to the Escrow Trustee to
provide the requisite notice of scheduled sinking fund redemption payments in
accordance with the terms of the Defeased Notes and the Original Indenture.
Section 5. Final Disposition. Within three Business Days after payment
of all of the outstanding principal of and interest on all of the Defeased Notes
(the final payments of which are scheduled to occur on December 15, 2006), all
and any moneys and funds remaining in the Defeasance Trust shall be transferred
and paid over by the Escrow Trustee to the Company and the obligations of the
Escrow Trustee shall then terminate.
Section 6. Defeasance Trust Irrevocable. The establishment of and
deposit into the Defeasance Trust, the directions of the Company to the Escrow
Trustee to pay the principal and premium, as applicable, of and interest on the
Defeased Notes and to give notice of redemption, and the trusts contained or
created in or by this Agreement, shall be irrevocable. The Escrow Trustee
agrees to hold the Defeasance Trust in trust for the holders of the Defeased
Notes
Section 7. Continuing Application of Certain Provisions of Original
Indenture. Notwithstanding any amendment or modification to the terms of the
Original Indenture, the Trustees shall continue to comply with, and agree
hereunder to be bound by, the provisions of Articles One, Five, Nine, Ten, and
Fifteen, and Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.10, 2.12(a),
2.12(c), 11.01, 11.02, 11.04, 11.05, 11.06, 11.07, 11.08, 11.11 and 11.12 of the
Original Indenture, until such time as the Escrow Trustee's obligations
hereunder shall have terminated.
Section 8. Indemnification. The Company hereby agrees to indemnify,
protect and hold harmless the Escrow Trustee from any and all actions, claims or
other rights asserted against it in the course of performing its duties
hereunder, including all reasonable costs, expenses and legal fees and expenses
incurred in defending such actions, provided, however, that the Company shall
not indemnify the Escrow Agent for any act constituting its own gross negligence
or willful misconduct.
Section 9. Payments to Escrow Trustee. The Company shall cause all
reasonable costs, fees and expenses of the Escrow Trustee in connection with
this Agreement to be paid and the Escrow Trustee shall look only to the Company
for payment of such costs, fees and expenses. The Escrow Trustee further agrees
that it will not use any portion of the Defeasance Trust or any income derived
therefrom for payment of such costs, fees and expenses and that it has no lien
on, security interest in or claim on the Defeasance Trust or any income derived
therefrom for payment of such costs, fees or expenses.
Section 10. No Third Party Beneficiaries Except Holders of Defeased
Notes. Nothing herein, expressed or implied, is intended or shall be construed
to confer upon or give to any person other than the parties hereto and the
holders of Defeased Notes, any right, remedy or claim hereunder or under any
covenant, condition or stipulation hereof; and the covenants,
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stipulations and agreements contained herein are and shall be enforceable only
by the parties hereto, their successors and assigns.
Section 11. Effect of Illegality. In case any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof, and this Agreement shall be
construed and enforced as if such invalid or illegal or unenforceable provision
had never been contained herein.
Section 12. Notices to Parties. Any notice to or demand upon the Escrow
Trustee or the Company under this Agreement shall be in writing and may be
served, presented, or made at the following addresses or at such other address
as shall last have been filed in writing with the parties for such purposes:
To the Company:
3900 Hamilton Boulevard
Allentown, Pennsylvania 18103
Attn: Senior Vice President - Finance
To the Escrow Trustee:
One Oliver Plaza
Pittsburgh, Pennsylvania 15265
Section 13. Modification and Amendment; Assignment. Modification or
amendment of this Agreement shall not be permitted except to clarify ambiguities
in this Agreement and any such modification or amendment shall only be made with
the prior written consent of the Company and the Escrow Trustee. This Agreement
shall be binding upon and shall inure to the benefit of the successors and
permitted assigns of each of the parties hereto; provided however, that this
Agreement may not be assigned by any party hereto without the prior written
consent of each of the other parties.
Section 14. Governing Law. The laws of the State of New York, without
regard to principles of conflicts of laws, shall govern the construction of this
Agreement.
Section 15. Counterpart Execution. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
BUCKEYE PIPE LINE COMPANY, L.P.
Attest: By: Buckeye Pipe Line Company, General
Partner
______________________________ By:___________________________
Name: Name:
Title: Title:
PNC BANK, NATIONAL ASSOCIATION
Attest: as Trustee and as Escrow Trustee
______________________________ By:___________________________
Name: Name: R.E. Ernst
Title: Title: Vice President
Witness:
______________________________ _______________________
Name: Douglas A. Wilson, as Individual Trustee
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