We are offering
to exchange our 5.500% Senior Notes due 2020 and related guarantees, which were issued on July 20, 2015 in a private offering (the private notes), for a like aggregate amount of our registered 5.500% Senior Notes due 2020 and related
guarantees (the exchange notes and, together with the private notes, the notes). The exchange notes are substantially identical to the private notes, except that the exchange notes have been registered under the federal
securities laws and will not bear any legend restricting their transfer. The exchange notes will represent the same debt as the private notes, and we will issue the exchange notes under the same indenture as the private notes.
Broker-dealers receiving exchange notes in exchange for private notes acquired for their own account through market-making or other trading
activities must deliver a prospectus in any resale of the exchange notes.
EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the sale of the private notes on July 20, 2015, we, Sunoco Finance and the guarantors entered into a registration rights
agreement with the initial purchasers of the private notes (the registration rights agreement), which requires us to file a registration statement under the Securities Act with respect to the exchange notes and, upon the effectiveness of
the registration statement, offer to the holders of the private notes the opportunity to exchange their private notes for a like principle amount of exchange notes. The exchange notes will be issued without a restrictive legend and generally may be
reoffered and resold without registration under the Securities Act.
The registration rights agreement provides that we must use our
reasonable efforts to consummate the exchange offer not later than 365 days after the original issuance of the private notes. The registration rights agreement further provides that, under certain circumstances, we must file a shelf registration
statement for the resale of the private notes and use reasonable best efforts to cause such registration statement to become effective under the Securities Act and to keep such registration statement effective for a period of one year, or such
shorter period that will terminate when all private notes covered by the shelf registration statement have been sold.
For each private
note surrendered to us pursuant to the exchange offer, the holder of such private note will receive an exchange note having a principal amount equal to that of the surrendered private note. Interest payments on the exchange notes will be made
semi-annually in cash, on February 1 and August 1 of each year. The registration rights agreement also provides an agreement to include in the prospectus for the exchange offer certain information necessary to allow a broker-dealer
who holds private notes that were acquired for its own account as a result of market-making activities or other trading activities (other than private notes acquired directly from us or one of our affiliates) to exchange such private notes pursuant
to the exchange offer and to satisfy the prospectus delivery requirements in connection with resales of exchange notes received by such broker-dealer in the exchange offer. We agreed to use reasonable efforts to maintain the effectiveness of the
exchange offer registration statement for these purposes for a period of 180 days after the completion of the exchange offer, which period may be extended under certain circumstances.
The preceding agreement is needed because any broker-dealer who acquires private notes for its own account as a result of market-making
activities or other trading activities is required to deliver a prospectus meeting the requirements of the Securities Act. This prospectus covers the offer and sale of the exchange notes pursuant to the exchange offer and the resale of exchange
notes received in the exchange offer by any broker-dealer who held private notes acquired for its own account as a result of market-making activities or other trading activities (other than private notes acquired directly from us or one of our
affiliates).
Holders that are broker-dealers may be deemed underwriters within the meaning of the Securities Act in
connection with any resale of exchange notes acquired in the exchange offer. Holders that are broker-dealers must acknowledge that they acquired their private notes in market-making activities or other trading activities and must deliver a
prospectus when they resell the exchange notes they acquire in the exchange offer in order not to be deemed an underwriter.
Based on
interpretations by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued in exchange for private notes may be offered for resale, resold and otherwise transferred by any exchange
noteholder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:
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such holder is not an affiliate of ours within the meaning of Rule 405 under the Securities Act;
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such exchange notes are acquired in the ordinary course of the holders business; and
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the holder does not intend to participate in the distribution of such exchange notes.
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Any holder who tenders notes in the exchange offer with the intention of participating in any
manner in a distribution of the exchange notes:
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cannot rely on the position of the staff of the SEC set forth in Exxon Capital Holdings Corp., SEC No- Action Letter (April 13, 1988); Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991); Shearman &
Sterling, SEC No-Action Letter (July 2, 1993) or similar interpretive letters; and
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must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.
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If, as stated above, a holder cannot rely on the position of the staff of the SEC set forth in Exxon Capital Holdings Corporation
or similar interpretive letters, any effective registration statement used in connection with a secondary resale transaction must contain the selling security holder information required by Item 507 of Regulation S-K under the Securities Act.
Each holder of the private notes (other than certain specified holders) who desires to exchange private notes for the exchange notes in the
exchange offer will be required to make the representations described below under Procedures for TenderingYour Representations to Us.
In the event that (i) we determine that the exchange offer registration provided for in the registration rights agreement is not available or
that the exchange offer may not be completed as soon as practicable after the last exchange date because it would violate any applicable law or applicable interpretations of the SEC; (ii) the exchange offer is not for any other reason completed by
the Target Registration Date (as defined below) or (iii) upon receipt of a written request (a Shelf Request) from any initial purchaser representing that it holds registrable securities (as defined in the registration rights agreement)
that are or were ineligible to be exchanged in the exchange offer, we will use our reasonable best efforts to cause to be filed as soon as practicable after such determination, date or Shelf Request, as the case may be, a shelf registration
statement providing for the sale of all the registrable securities by the holders thereof and to have such shelf registration statement become effective.
If (i) on or prior to the time the exchange offer is completed, existing law or SEC interpretations are changed such that the exchange notes
would not generally be freely transferable after the exchange offer without further registration under the Securities Act; (ii) the exchange offer registration statement is not declared effective by 365 days after the issue date of the private notes
or (iii) the exchange offer has not been completed within 20 business days of the exchange offer registration statement being declared effective, then we will use our reasonable best efforts to file and to have become effective a shelf registration
statement relating to resales of the exchange notes and to keep that shelf registration statement effective until the date that the exchange notes cease to be registrable securities (as defined in the registration rights agreement),
including when all exchange notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement. We will, in the event of such a shelf registration, provide to each participating holder of exchange notes
copies of a prospectus, notify each participating holder of exchange notes when the shelf registration statement has become effective and take certain other actions to permit resales of the exchange notes. A holder of exchange notes that sells
exchange notes under the shelf registration statement generally will be required to make certain representations to us (as described in the registration rights agreement), to be named as a selling security holder in the related prospectus and to
deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with those sales and will be bound by the provisions of the registration rights agreement that are applicable to
such a holder of exchange notes (including certain indemnification obligations). Holders of exchange notes will also be required to suspend their use of the prospectus included in the shelf registration statement under specified circumstances upon
receipt of notice from us. Under applicable interpretations of the staff of the SEC, our affiliates will not be permitted to exchange their private notes for registered notes in the exchange offer.
If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before the date
that is 365 days after the issue date of the private notes (the Target Registration
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Date), then we agree to pay each holder of private notes liquidated damages in the form of additional interest in an amount equal to 0.25% per annum of the principal amount of notes held by
such holder, with respect to the first 90 days after the Target Registration Date (which rate shall be increased by an additional 0.25% per annum for each subsequent 90-day period that such liquidated damages continue to accrue), in each case until
the exchange offer is completed or the shelf registration statement is declared effective;
provided
,
however
, that at no time will the amount of liquidated damages accruing with respect to the private notes exceed in the aggregate 1.0%
per annum. Upon the completion of the exchange offer (or, if required, the effectiveness of the shelf registration statement) liquidated damages described in this paragraph with respect to the private notes will cease to accrue.
If we effect the registered exchange offer, we will be entitled to close the registered exchange offer 20 business days after their
commencement as long as we have accepted all private notes validly tendered in accordance with the terms of the exchange offer and no brokers or dealers continue to hold any private notes.
This summary of the material provisions of the registration rights agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the registration rights agreement, a copy of which is incorporated by reference into this prospectus.
Except as set forth above, after consummation of the exchange offer, holders of private notes that are the subject of the exchange offer have
no registration or exchange rights under the registration rights agreement. See Consequences of Failure to Exchange.
Terms of the
Exchange Offer
Subject to the terms and conditions described in this prospectus and in the letter of transmittal, we will accept for
exchange any private notes properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. We will issue exchange notes in principal amount equal to the principal amount of private notes surrendered in the
exchange offer. Private notes may be tendered only for exchange notes and only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The exchange offer is not conditioned upon any minimum aggregate principal amount of private notes being tendered for exchange.
As of the date of this prospectus, $600.0 million in aggregate principal amount of the private notes are outstanding. This prospectus and the
letter of transmittal are being sent to all registered holders of private notes. There will be no fixed record date for determining registered holders of private notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of
the Securities Act and the Exchange Act and the rules and regulations of the SEC. Private notes that the holders thereof do not tender for exchange in the exchange offer will remain outstanding and continue to accrue interest. These private notes
will continue to be entitled to the rights and benefits such holders have under the indenture relating to the private notes.
We will be
deemed to have accepted for exchange properly tendered private notes when we have given oral (promptly followed in writing) or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration
rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us.
If you tender private notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the letter of
transmittal, transfer taxes with respect to the exchange of private notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section
entitled Fees and Expenses for more details regarding fees and expenses incurred in the exchange offer.
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We will return any private notes that we do not accept for exchange for any reason without
expense to their tendering holder promptly after the expiration or termination of the exchange offer.
Expiration Date
The exchange offer will expire at 5:00 p.m., New York City time, on October 3, 2016, unless extended, in which case the expiration date
will mean the latest date and time to which we extend the exchange offer.
Delays in Acceptance, Extensions, Termination or Amendment
We expressly reserve the right, at any time or various times, to extend the period of time during which the exchange offer is open. We may
delay acceptance of any private notes by giving oral (promptly followed in writing) or written notice of such delay to their holders. During any such extensions, any private notes previously tendered will remain subject to the exchange offer, and we
may accept them for exchange.
In order to extend an exchange offer, we will notify the exchange agent by giving oral (promptly followed
in writing) or written notice of such extension. We will notify the registered holders of the private notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.
If any of the conditions described below under Conditions to the Exchange Offer have not been satisfied with respect to the
exchange offer, we reserve the right, in our sole discretion:
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to delay accepting for exchange any private notes in the exchange offer;
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to extend the exchange offer; or
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to terminate the exchange offer,
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by giving oral (promptly followed in writing) or written notice of such
delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be followed promptly by oral (promptly followed in writing) or written
notice thereof to the registered holders of the private notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement. The supplement
will be distributed to the registered holders of the private notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we may extend the exchange offer. In the event of a material change in the
exchange offer, including the waiver by us of a material condition, we will extend the exchange offer period if necessary so that at least five business days remain in the exchange offer following notice of the material change.
Conditions to the Exchange Offer
We will
not be required to accept for exchange, or exchange any exchange notes for, any private notes if the exchange offer, or the making of any exchange by a holder of private notes, would violate applicable law or any applicable interpretation of the
staff of the SEC. Similarly, we may terminate the exchange offer as provided in this prospectus before accepting private notes for exchange in the event of such a potential violation.
In addition, we will not be obligated to accept for exchange the private notes of any holder that has not made to us the representations
described under Purpose and Effect of the Exchange Offer, Procedures for Tendering and Plan of Distribution and such other representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to allow us to use an appropriate form to register the exchange notes under the Securities Act.
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We expressly reserve the right to amend or terminate the exchange offer, and to reject for
exchange any private notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give prompt oral (promptly followed in writing) or written notice of any extension,
amendment, non-acceptance or termination to the holders of the private notes as promptly as practicable.
These conditions are for our
sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each
such right will be deemed an ongoing right that we may assert at any time or at various times.
In addition, we will not accept for
exchange any private notes tendered, and will not issue exchange notes in exchange for any such private notes, if at such time any stop order has been threatened or is in effect with respect to the exchange offer registration statement of which this
prospectus constitutes a part or the qualification of the indenture governing the exchange notes under the Trust Indenture Act of 1939.
Procedures for
Tendering
In order to participate in the exchange offer, you must properly tender your private notes to the exchange agent as
described below. It is your responsibility to properly tender your private notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your tender.
If you have any questions or need help in exchanging your private notes, please call the exchange agent, whose address and phone number are
set forth in Prospectus SummaryThe Exchange OfferExchange Agent.
All of the private notes were issued in
book-entry form, and all of the private notes are currently represented by global certificates held for the account of DTC. We have confirmed with DTC that the private notes may be tendered using the ATOP instituted by DTC. The exchange agent will
establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer and DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their private
notes to the exchange agent using the ATOP procedures. In connection with the transfer, DTC will send an agents message to the exchange agent. The agents message will be deemed to state that DTC has received instructions from
the participant to tender such private notes and that the participant agrees to be bound by the terms of the letter of transmittal.
By
using the ATOP procedures to exchange private notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms just as if you had signed it.
There is no procedure for guaranteed late delivery of the private notes.
Determinations Under the Exchange Offer
We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered private
notes and withdrawal of tendered private notes. Our determination will be final and binding. We reserve the absolute right to reject any private notes not properly tendered or any private notes our acceptance of which would, in the opinion of our
counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular private notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the
letter of transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of private notes must be cured within such time as we shall determine. Although we intend to notify holders of
defects or irregularities
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with respect to tenders of private notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of private notes will not be
deemed made until such defects or irregularities have been cured or waived. Any private notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned
to the tendering holder, unless otherwise provided in the letter of transmittal, promptly following the expiration date of the exchange offer.
When We
Will Issue Exchange Notes
In all cases, we will issue exchange notes for private notes that we have accepted for exchange under the
exchange offer only after the exchange agent timely receives:
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a book-entry confirmation of such private notes into the exchange agents account at DTC; and
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a properly transmitted agents message.
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Return of Private Notes Not Accepted or Exchanged
If we do not accept any tendered private notes for exchange or if private notes are submitted for a greater principal amount than the holder
desires to exchange, the unaccepted or non-exchanged private notes will be returned without expense to their tendering holder. Such non-exchanged private notes will be credited to an account maintained with DTC. These actions will occur promptly
after the expiration or termination of the exchange offer.
Your Representations to Us
By agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
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any exchange notes that you receive will be acquired in the ordinary course of your business;
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you have no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;
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you are not our affiliate, as defined in Rule 405 of the Securities Act; and
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if you are a broker-dealer that will receive exchange notes for your own account in exchange for private notes, you acquired those private notes as a result of market-making activities or other trading activities and
you will deliver a prospectus (or to the extent permitted by law, make available a prospectus) in connection with any resale of such exchange notes.
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Withdrawal of Tenders
Except as
otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective you must comply with the appropriate procedures of DTCs ATOP
system. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn private notes and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal. Our determination shall be
final and binding on all parties. We will deem any private notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.
Any private notes that have been tendered for exchange but are not exchanged for any reason will be credited to an account maintained with DTC
for the private notes. This crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may re-tender properly withdrawn private notes by following the procedures described under
Procedures for Tendering above at any time prior to 5:00 p.m., New York City time, on the expiration date.
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Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation
by facsimile, telephone, electronic mail or in person by our officers and regular employees and those of our affiliates.
We have not
retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its
services and reimburse it for its related reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection
with the exchange offer. They include:
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all registration and filing fees and expenses;
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all fees and expenses of compliance with federal securities and state blue sky or securities laws;
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accounting fees, legal fees incurred by us, disbursements and printing, messenger and delivery services, and telephone costs; and
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related fees and expenses.
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Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of private notes under the exchange offer. The tendering holder, however,
will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if a transfer tax is imposed for any reason other than the exchange of private notes under the exchange offer.
Consequences of Failure to Exchange
If
you do not exchange your private notes for exchange notes under the exchange offer, you will remain subject to the existing restrictions on transfer of the private notes. In general, you may not offer or sell the private notes unless the offer or
sale is either registered under the Securities Act or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the
private notes under the Securities Act.
Accounting Treatment
We will record the exchange notes in our accounting records at the same carrying value as the private notes. This carrying value is the
aggregate principal amount of the private notes plus or minus any bond premium or discount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection
with the exchange offer.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial
and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered private notes in
open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any private notes that are not tendered in the exchange offer or to file a registration statement to permit
resales of any untendered private notes.
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DESCRIPTION OF THE EXCHANGE NOTES
You can find the definitions of certain terms used in this description under the subheading Certain Definitions. In this
description, the term Sunoco LP refers only to Sunoco LP and not to any of its subsidiaries, the term Finance Corp. refers to Sunoco Finance Corp. and the term Issuers refers to Sunoco LP and
Finance Corp.
The Issuers issued the private notes, and will issue the exchange notes, under an indenture dated as of July 20, 2015 among
themselves, the Guarantors and U.S. Bank National Association, as trustee (as amended, the Indenture). The terms of the private notes include, and the exchange notes will include, those stated in the Indenture and those made part thereof
by reference to the Trust Indenture Act of 1939, as amended (the Trust Indenture Act).
The following description is a summary
of the material provisions of the Indenture. It does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, defines your rights as holders of notes. Copies of the Indenture are available as
set forth below under Additional Information. Certain defined terms used in this description but not defined below under Certain Definitions have the meanings assigned to them in the Indenture.
The registered holder of a note will be treated as its owner for all purposes. Only registered holders will have rights under the Indenture.
Unless the context otherwise requires for all purposes of the Indenture, and for this Description of the Exchange Notes, all references to the notes include the private notes, the exchange notes and any additional notes
actually issued under the Indenture.
General
The Notes
The notes:
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are general unsecured obligations of the Issuers;
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are
pari passu
in right of payment with all existing and future senior Indebtedness of the Issuers;
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are senior in right of payment to any future subordinated Indebtedness of the Issuers; and
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are unconditionally guaranteed by the Guarantors.
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The notes, however, are effectively
subordinated to all secured Indebtedness under the Credit Agreement and Sunoco LPs $1.4 billion term loan (the Term Loan), which are secured by substantially all of the assets of Sunoco LP and the Guarantors, to the extent of
the value of the collateral securing that Indebtedness. The notes will also be structurally subordinated to any Indebtedness of our Subsidiaries that do not guarantee the notes. See Risk FactorsRisks Relating to Our Indebtedness and the
NotesThe notes and the guarantees will be unsecured and effectively subordinated to our and the guarantors existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and
The notes are structurally subordinated to all liabilities of any non-guarantor subsidiaries.
The Note Guarantees
Each guarantee of the notes:
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is a general unsecured obligation of the Guarantor;
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is
pari passu
in right of payment with all existing and future senior Indebtedness of that Guarantor; and
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is senior in right of payment to any future subordinated Indebtedness of that Guarantor.
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The Note Guarantees, however, are effectively subordinated to all secured Indebtedness of the
Guarantors, including their guarantees of Indebtedness under the Credit Agreement and the Term Loan, to the extent of the value of the collateral securing those guarantees.
All of Sunoco LPs current significant Subsidiaries, with the exception of Finance Corp., guarantee the notes. The notes will also be
guaranteed by any of Sunoco LPs future Domestic Subsidiaries that incurs Indebtedness under a Credit Facility and by any Restricted Subsidiaries that guarantee Indebtedness of an Issuer or a Guarantor under a Credit Facility. In the event of a
bankruptcy, liquidation or reorganization of any of our non-guaranteeing Subsidiaries, such non-guaranteeing Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us
and, as a result, the obligations of our non-guaranteeing subsidiaries will be structurally senior to the notes and Note Guarantees. See Risk FactorsRisks Relating to Our Indebtedness and the NotesThe notes and the guarantees will
be unsecured and effectively subordinated to our and the guarantors existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and The notes are structurally subordinated to
all liabilities of any non-guarantor subsidiaries.
All of our Subsidiaries are Restricted Subsidiaries. Under the
circumstances described below under the caption Certain CovenantsDesignation of Restricted and Unrestricted Subsidiaries, however, we are permitted to designate certain of our existing and future Subsidiaries as
Unrestricted Subsidiaries. Our Unrestricted Subsidiaries are not subject to the restrictive covenants in the Indenture. Our Unrestricted Subsidiaries do not guarantee the notes.
Principal, Maturity and Interest
The Issuers will issue $600 million in aggregate principal amount of the exchange notes in the exchange offer. The Issuers may issue additional
notes under the Indenture from time to time after this offering. Any issuance of additional notes is subject to all the covenants in the Indenture, including the covenant described below under the caption Certain
CovenantsIncurrence of Indebtedness and Issuance of Disqualified Equity. The exchange notes and any additional notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture,
including waivers, amendments, redemptions and offers to purchase. The Issuers have issued the notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The notes will mature on August 1, 2020.
Interest on the notes will accrue at the rate of 5.500% per annum and will be payable semi-annually in arrears on February 1 and August 1
of each year. Interest on overdue principal and interest accrues at the interest rate on the notes. The Issuers will make each interest payment on the notes to the holders of record on January 15 and July 15 immediately preceding each
payment date. Additional interest will accrue as liquidated damages in certain circumstances described in the registration rights agreement. All references in this Description of the Exchange Notes include any such additional interest to
the extent payable.
Interest on the notes accrues from the date of original issuance or, if interest has already been paid, from the date
it was most recently paid. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months.
Methods of Receiving
Payments on the Notes
Interest on global notes will be paid in accordance with the procedures of the applicable depositary. If a
holder of $5.0 million or more in principal amount of notes held in certificated form has given wire transfer instructions to Sunoco LP, to an account in the United States, the Issuers will pay all principal of, and interest and premium,
if any, on, that holders notes in accordance with those instructions. All other payments on certificated notes will be made at the office or agency of the paying agent and registrar unless the Issuers elect to make interest payments by check
mailed to the holders of notes at their addresses set forth in the register of holders.
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Paying Agent and Registrar for the Notes
The trustee acts as paying agent and registrar. The Issuers may change the paying agent or registrar without prior notice to the holders of
notes, and Sunoco LP, Finance Corp. or any of Sunoco LPs other Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
A
holder may transfer or exchange notes in accordance with the provisions of the Indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a
transfer of notes. No service charge will be imposed by the Issuers or the trustee or registrar for any transfer or exchange of notes, except that holders will be required to pay all taxes due on transfer. The Issuers will not be required to
transfer or exchange any note selected for redemption. Also, the Issuers will not be required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.
Note Guarantees
The notes
are guaranteed by each of Sunoco LPs current significant Subsidiaries, with the exception of Finance Corp. The notes may also be guaranteed by certain of Sunoco LPs future Restricted Subsidiaries under the circumstances described
under Certain CovenantsAdditional Guarantees. These Note Guarantees are joint and several obligations of the Guarantors. The obligations of each Guarantor under its Note Guarantee are limited as necessary to prevent that Note
Guarantee from constituting a fraudulent conveyance under applicable law. See Risk FactorsRisks Relating to Our Indebtedness and the NotesFederal and state statutes allow courts, under specific circumstances, to void subsidiary
guarantees and require noteholders to return payments received from subsidiary guarantors.
A Guarantor may not sell or otherwise
dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Issuers or another Guarantor, unless:
|
(1)
|
immediately after giving effect to that transaction, no Default or Event of Default exists; and
|
|
(a)
|
the Person acquiring the assets in any such sale or other disposition or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) assumes all the obligations of that Guarantor
under the Indenture and its Note Guarantee pursuant to a supplemental indenture substantially in the form specified in the Indenture; or
|
|
(b)
|
the Net Proceeds of such sale or other disposition are applied in accordance with the Asset Sales provisions of the Indenture.
|
The Note Guarantee of a Guarantor will be released:
|
(1)
|
in connection with any sale or other disposition of all or substantially all of the properties or assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) Sunoco LP or a Restricted Subsidiary of Sunoco LP, if (for the avoidance of doubt, at the time thereof) the sale or other disposition does not violate the Asset Sales provisions of the
Indenture;
|
|
(2)
|
in connection with any sale or other disposition of all the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) Sunoco LP or a Restricted Subsidiary of
Sunoco LP, if (for the avoidance of doubt, at the time thereof) the sale or other disposition does not violate the Asset Sales provisions of the Indenture;
|
28
|
(3)
|
if Sunoco LP designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture;
|
|
(4)
|
at such time as the Guarantor ceases to guarantee any other Indebtedness of an Issuer or another Guarantor,
provided
that, if it is also a Domestic Subsidiary, it is then no longer an obligor with respect to any
Indebtedness under any Credit Facility;
provided
,
however
, that if, at any time following such release, that Guarantor incurs a guarantee under a Credit Facility, then such Guarantor shall be required to provide a Note Guarantee at
such time;
|
|
(5)
|
upon legal or covenant defeasance or satisfaction and discharge of the Indenture as provided below under the captions Legal Defeasance and Covenant Defeasance and Satisfaction and
Discharge; or
|
|
(6)
|
the first day on which the notes achieve an Investment Grade Rating.
|
See
Repurchase at the Option of HoldersAsset Sales.
Optional Redemption
Except pursuant to this section relating to optional redemption, or as described below in the last paragraph under Repurchase at
the Option of HoldersChange of Control, the notes are not redeemable at the Issuers option.
At any time prior to August
1, 2017, the Issuers may, on one or more occasions, redeem up to 35% of the aggregate principal amount of the notes issued under the Indenture at a redemption price of 105.500% of the principal amount of the notes redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), in an amount not greater
than the net cash proceeds of one or more Equity Offerings,
provided
that:
|
(1)
|
at least 65% of the aggregate principal amount of the notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding notes held by Sunoco LP and its
Subsidiaries); and
|
|
(2)
|
the redemption occurs within 180 days of the date of the closing of each such Equity Offering.
|
On and after August 1, 2017, the Issuers may, on one or more occasions, redeem all or a part of the notes at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive
interest due on an interest payment date that is on or prior to the redemption date), if redeemed during the twelve-month period beginning on August 1 of the years indicated below:
|
|
|
|
|
Year
|
|
Percentages
|
|
2017
|
|
|
102.750
|
%
|
2018
|
|
|
101.375
|
%
|
2019
|
|
|
100.000
|
%
|
Prior to August 1, 2017, the Issuers may, on one or more occasions, redeem all or part of the notes at a
redemption price equal to the sum of the principal amount thereof, plus the Applicable Premium at the redemption date, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).
Unless the Issuers
default in the payment of the redemption price, interest will cease to accrue on the notes or portions thereof called for redemption on the applicable redemption date.
29
Selection and Notice
If less than all the notes is to be redeemed at any time, the trustee will select the applicable notes for redemption as follows:
|
(1)
|
if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or
|
|
(2)
|
if the notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such other method as the trustee deems fair (except that any notes represented by a note in global form will be selected
by such method as The Depository Trust Company (DTC) or its nominee or successor may require or, where such nominee or successor is the trustee, a method that most nearly approximates pro rata selection as the trustee deems fair and
appropriate unless otherwise required by law).
|
No notes of $2,000 or less can be redeemed in part. Notices of redemption
will be sent at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be sent more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the Indenture. Any such redemption may, at Sunoco LPs discretion, be subject to one or more conditions precedent.
If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount
of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption become due
on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of notes called for redemption.
Mandatory Redemption
The
Issuers are not required to make mandatory redemption or sinking fund payments with respect to the notes.
Repurchase at the Option of
Holders
Change of Control
If a
Change of Control occurs, Sunoco LP will make an offer to each holder of notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holders notes pursuant to the offer described below
(the Change of Control Offer) on the terms set forth in the Indenture. In the Change of Control Offer, Sunoco LP will offer a payment in cash (the Change of Control Payment) equal to 101% of the aggregate principal
amount of the notes repurchased, plus accrued and unpaid interest on such notes repurchased to, but excluding, the date of purchase (the Change of Control Payment Date), subject to the rights of holders of notes on the relevant record
date to receive interest due on an interest payment date that is on or prior to the Change of Control Payment Date. Within 30 days following any Change of Control, Sunoco LP will send a notice to each holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase the notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such
notice is sent, pursuant to the procedures required by the Indenture and described in such notice. In making the Change of Control Offer, Sunoco LP will comply with all applicable requirements of Rule 14e-1 under the Exchange Act and other
securities laws and regulations. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, Sunoco LP will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such compliance.
30
Promptly following the expiration of the Change of Control Offer, Sunoco LP will, to the
extent lawful, accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer. Promptly thereafter on the Change of Control Payment Date, Sunoco LP will:
|
(1)
|
deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
|
|
(2)
|
deliver or cause to be delivered to the trustee the notes properly accepted together with an officers certificate stating the aggregate principal amount of notes or portions of notes being purchased by
Sunoco LP.
|
The paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment
for such notes (or, to the extent the notes are in global form, make such payment through the facilities of DTC), and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in
principal amount to any unpurchased portion of the notes surrendered;
provided
, that each new note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Sunoco LP will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
These provisions relating to a
Change of Control Offer will be applicable whether or not any other provisions of the Indenture are applicable. Except with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of notes to require that
either of the Issuers repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
Sunoco LP
will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture
applicable to a Change of Control Offer made by Sunoco LP and purchases all notes properly tendered and not withdrawn under the Change of Control Offer; (2) notice of redemption with respect to all outstanding notes has been given pursuant
to the Indenture as described above under the caption Optional Redemption, unless and until there is a default in payment of the applicable redemption price; or (3) in connection with, or in contemplation of, any publicly
announced Change of Control, Sunoco LP has made an offer to purchase (an Alternate Offer) any and all notes properly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all notes properly
tendered in accordance with the terms of such Alternate Offer. Notwithstanding anything to the contrary contained in the Indenture, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such
Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
The
definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of all or substantially all of the properties or assets of Sunoco LP and its Subsidiaries
taken as a whole. Although there is a limited body of case law interpreting the phrase substantially all, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to
require Sunoco LP to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Sunoco LP and its Subsidiaries taken as a whole to another Person or group may be
uncertain.
In the event that holders of not less than 90% of the aggregate principal amount of the notes accept a Change of Control Offer
or Alternate Offer and Sunoco LP purchases all of such notes held by such holders, Sunoco LP will have the right, upon not less than 15 nor more than 60 days prior notice, given not more than 30 days following the purchase
pursuant to the Change of Control Offer or Alternate Offer described above, to redeem all of the notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment or Alternate Offer price, as
applicable, plus, to the extent not included in the Change of Control Payment or Alternate Offer price, as applicable, accrued and unpaid interest thereon to, but excluding,
31
the redemption date (subject to the right of the holders of such notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).
The agreements governing Sunoco LPs other Indebtedness contain, and future agreements governing Sunoco LPs
Indebtedness may contain, prohibitions of certain events, including events that would constitute a Change of Control and including repurchases of or other prepayments in respect of the notes. The exercise by the holders of notes of their right to
require Sunoco LP to repurchase the notes upon a Change of Control could cause a default under these other agreements, even if the Change of Control itself does not, due to the financial effect of such repurchases on Sunoco LP or other
circumstances. If a Change of Control occurs at a time when Sunoco LP is prohibited from purchasing notes, Sunoco LP could seek the consent of the lenders or counterparties under those agreements or could attempt to repay or refinance such
borrowings. If Sunoco LP does not obtain an appropriate consent or repay those borrowings, Sunoco LP will remain prohibited from purchasing notes. In that case, Sunoco LPs failure to purchase tendered notes would constitute an
Event of Default under the Indenture which could, in all likelihood, constitute a default under the other indebtedness. Finally, Sunoco LPs ability to pay cash to the holders of notes upon a repurchase may be limited by
Sunoco LPs then existing financial resources. See Risk FactorsRisks Relating to Our Indebtedness and the NotesWe may not have the funds necessary to finance the repurchase of the notes in connection with a change of
control offer required by the indenture.
Asset Sales
Sunoco LP will not consummate, and will not permit any of its Restricted Subsidiaries to consummate, an Asset Sale unless:
|
(1)
|
Sunoco LP (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of;
|
|
(2)
|
such fair market value is determined by the Board of Directors of the General Partner if the value is $50.0 million or more, as evidenced by a resolution of such Board of Directors of the General Partner; and
|
|
(3)
|
at least 75% of the aggregate consideration received by Sunoco LP and its Restricted Subsidiaries in the Asset Sale and all other Asset Sales since the 2023 Notes Issue Date is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following will be deemed to be cash:
|
|
(a)
|
any liabilities, as shown on Sunoco LPs most recent consolidated balance sheet, of Sunoco LP or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms
subordinated to the notes or any Note Guarantees) that are assumed by the transferee of any such assets pursuant to a customary novation or indemnity agreement that releases Sunoco LP or such Restricted Subsidiary from or indemnifies against
further liability;
|
|
(b)
|
any securities, notes or other obligations received by Sunoco LP or any such Restricted Subsidiary from such transferee that are within 180 days after the Asset Sale (subject to ordinary settlement periods),
converted by Sunoco LP or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion;
|
|
(c)
|
any Capital Stock or assets of the kind referenced in clause (2) or (4) of the next paragraph; and
|
|
(d)
|
any Designated Non-cash Consideration received by Sunoco LP or any of its Restricted Subsidiaries in such Asset Sale having an aggregate fair market value (as determined in good faith by Sunoco LP), taken
together with all other Designated Non-cash Consideration received pursuant to this clause (d), not to exceed the greater of (i) $30.0 million and (ii) 2.5% of Sunoco LPs Consolidated Net Tangible Assets (with the fair
market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
|
32
Within 365 days after the receipt of any Net Proceeds from an Asset Sale (or within
180 days after such 365-day period in the event Sunoco LP or any Restricted Subsidiary enters into a binding commitment with respect to such application), Sunoco LP (or any Restricted Subsidiary) may apply an amount equal to such Net
Proceeds:
|
(1)
|
to repay Senior Indebtedness of Sunoco LP and/or its Restricted Subsidiaries (or to make an offer to repurchase or redeem such Indebtedness;
provided
that such repurchase or redemption closes within
45 days after the end of such 365-day period or any permitted extension thereof as contemplated by the first sentence of this paragraph);
|
|
(2)
|
to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business becomes a Restricted
Subsidiary of Sunoco LP;
|
|
(3)
|
to make a capital expenditure; or
|
|
(4)
|
to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business.
|
Pending the final application of any Net Proceeds, Sunoco LP or any Restricted Subsidiary may temporarily reduce revolving credit
borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales
that are not applied or invested as provided in the second paragraph of this covenant will constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $30.0 million, within five business days thereof,
Sunoco LP will make an offer (an Asset Sale Offer) to all holders of notes and all holders of other Indebtedness that is
pari passu
with the notes containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other
pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of the principal amount of the notes plus accrued and unpaid interest to, but excluding, the date of purchase, subject to the rights of holders of notes on the relevant record date to receive interest due on an interest
payment date that is on or prior to the purchase date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Sunoco LP may use those Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of notes and other
pari pass
u Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, then notes and such other
pari passu
Indebtedness will be purchased on a
pro rata basis (except that any notes represented by a note in global form will be selected by such method as DTC or its nominee or successor may require or, where such nominee or successor is the trustee, a method that most nearly approximates pro
rata selection as the trustee deems fair and appropriate unless otherwise required by law). Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
In making an Asset Sale Offer, Sunoco LP will comply with the applicable requirements of Rule 14e-1 under the Exchange Act and other
securities laws and regulations. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of the Indenture, Sunoco LP will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the Asset Sales provisions of the Indenture by virtue of such compliance.
33
Certain Covenants
Termination of Covenants
If at any time
following the date of the Indenture, the notes achieve an Investment Grade Rating and no Default or Event of Default has occurred and is then continuing under the Indenture, Sunoco LP and its Restricted Subsidiaries will no longer be subject to
the following provisions of the Indenture (Termination Event):
|
(1)
|
Repurchase at the Option of HoldersAsset Sales;
|
|
(2)
|
Restricted Payments;
|
|
(3)
|
Incurrence of Indebtedness and Issuance of Disqualified Equity;
|
|
(4)
|
Dividend and Other Payment Restrictions Affecting Subsidiaries;
|
|
(5)
|
Designation of Restricted and Unrestricted Subsidiaries;
|
|
(6)
|
Transactions with Affiliates;
|
|
(7)
|
Business Activities;
|
|
(8)
|
clause (4) of the covenant described below under the caption Merger, Consolidation or Sale of Assets;
|
|
(9)
|
Limitation on Sale and Leaseback Transactions; and
|
|
(10)
|
Additional Guarantees.
|
There can be no assurance that the notes will ever
achieve or maintain an Investment Grade Rating. Following a Termination Event, the foregoing covenants will continue to be terminated even if the Notes fall below Investment Grade Rating and a Default or Event of Default has occurred and is then
continuing under the Indenture.
Restricted Payments
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
|
(1)
|
declare or pay any dividend or make any other payment or distribution on account of its outstanding Equity Interests (including any payment in connection with any merger or consolidation involving Sunoco LP or any
of its Restricted Subsidiaries) or to the direct or indirect holders of Sunoco LPs or any of its Restricted Subsidiaries Equity Interests in their capacity as such (other than distributions or dividends payable in Equity Interests,
excluding Disqualified Equity, of Sunoco LP and other than distributions or dividends payable to Sunoco LP or a Restricted Subsidiary of Sunoco LP);
|
|
(2)
|
purchase, redeem or otherwise acquire or retire for value (including in connection with any merger or consolidation involving Sunoco LP) any Equity Interests of Sunoco LP or any direct or indirect parent of
Sunoco LP;
|
|
(3)
|
make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of Sunoco LP or any Guarantor that is contractually subordinated to the notes or to any
Note Guarantee (excluding intercompany Indebtedness between or among Sunoco LP and any of its Restricted Subsidiaries), except a payment of interest or principal within one month of its Stated Maturity; or
|
|
(4)
|
make any Restricted Investment,
|
34
(all such payments and other actions set forth in these clauses (1) through (4) above being
collectively referred to as Restricted Payments), unless, at the time of and after giving effect to such Restricted Payment, no Default (except a Reporting Default) or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment and either:
|
(1)
|
if the Fixed Charge Coverage Ratio for Sunoco LPs most recently ended four full fiscal quarters for which internal financial statements are available at the time of such Restricted Payment is not less than
1.75 to 1.0, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Sunoco LP and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7),
(8), (9) and (10) of the next succeeding paragraph) during the quarter in which such Restricted Payment is made, is less than the sum, without duplication, of:
|
|
(a)
|
Available Cash from Operating Surplus as of the end of the immediately preceding quarter; plus
|
|
(b)
|
100% of the aggregate net proceeds received by Sunoco LP (including the Fair Market Value of any Permitted Business or long-term assets that are used or useful in a Permitted Business to the extent acquired in
consideration of Equity Interests of Sunoco LP (other than Disqualified Equity)) since the 2023 Notes Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of Sunoco LP (other than
Disqualified Equity) or from the issue or sale of convertible or exchangeable Disqualified Equity or convertible or exchangeable debt securities of Sunoco LP that have been converted into or exchanged for such Equity Interests (other than
Equity Interests (or Disqualified Equity or debt securities) sold to a Subsidiary of Sunoco LP); plus
|
|
(c)
|
to the extent that any Restricted Investment that was made after the 2023 Notes Issue Date is sold for cash or Cash Equivalents or otherwise liquidated or repaid for cash or Cash Equivalents, the return of capital with
respect to such Restricted Investment (less the cost of disposition, if any); plus
|
|
(d)
|
the net reduction in Restricted Investments resulting from dividends, repayments of loans or advances, or other transfers of assets in each case to Sunoco LP or any of its Restricted Subsidiaries from any Person
(including Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not been included in Available Cash from Operating Surplus for any period commencing on or after
the 2023 Notes Issue Date (items (b), (c) and (d) being referred to as Incremental Funds); minus
|
|
(e)
|
the aggregate amount of Incremental Funds previously expended pursuant to this clause (1) and clause (2) below; or
|
|
(2)
|
if the Fixed Charge Coverage Ratio for Sunoco LPs most recently ended four full fiscal quarters for which internal financial statements are available at the time of such Restricted Payment is less than 1.75
to 1.0, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Sunoco LP and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8),
(9) and (10) of the next succeeding paragraph) during the quarter in which such Restricted Payment is made (such Restricted Payments for purposes of this clause (2) meaning only distributions on common units and subordinated units of
Sunoco LP, plus the related distribution on the general partner interest and any incentive distribution rights), is less than the sum, without duplication, of:
|
|
(a)
|
$200.0 million less the aggregate amount of all prior Restricted Payments made by Sunoco LP and its Restricted Subsidiaries pursuant to this clause 2(a) since the 2023 Notes Issue Date; plus
|
|
(b)
|
Incremental Funds to the extent not previously expended pursuant to this clause (2) or clause (1) above.
|
The preceding provisions will not prohibit:
|
(1)
|
the payment of any dividend or distribution within 60 days after the date of its declaration, if at the date of declaration the payment would have complied with the provisions of the Indenture;
|
35
|
(2)
|
the redemption, repurchase, retirement, defeasance or other acquisition of subordinated Indebtedness of Sunoco LP or any Guarantor or of any Equity Interests of Sunoco LP in exchange for, or out of the net
cash proceeds of, a substantially concurrent (a) capital contribution to Sunoco LP from any Person (other than a Restricted Subsidiary of Sunoco LP) or (b) sale (other than to a Restricted Subsidiary of Sunoco LP) of Equity
Interests of Sunoco LP, with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or other acquisition occurs not more than 120 days after such sale;
provided
that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded or deducted from the calculation of Available Cash from Operating Surplus and Incremental Funds;
|
|
(3)
|
the defeasance, redemption, repurchase or other acquisition or retirement of any subordinated Indebtedness of Sunoco LP or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for,
Permitted Refinancing Indebtedness;
|
|
(4)
|
the payment of any distribution or dividend by a Restricted Subsidiary of Sunoco LP to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis;
|
|
(5)
|
so long as no Default (except a Reporting Default) has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of
Sunoco LP or any Restricted Subsidiary of Sunoco LP held by any current or former officer, director or employee of the General Partner, Sunoco LP or any of Sunoco LPs Restricted Subsidiaries pursuant to any equity
subscription agreement or plan, stock or unit option agreement, shareholders agreement or similar agreement;
provided
that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed
$2.0 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years);
provided
further
that such amount in any calendar year may be increased by an amount not to exceed
(a) the cash proceeds received by Sunoco LP from the sale of Equity Interests of Sunoco LP to members of management or directors of the General Partner, Sunoco LP or its Restricted Subsidiaries that occurs after the 2023 Notes
Issue Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of sections 1(b) or 2(b) of the preceding paragraph), plus (b) the cash
proceeds of key man life insurance policies received by Sunoco LP after the 2023 Notes Issue Date;
|
|
(6)
|
so long as no Default (except a Reporting Default) has occurred and is continuing or would be caused thereby, payments of dividends on Disqualified Equity issued pursuant to the covenant described under
Incurrence of Indebtedness and Issuance of Disqualified Equity;
|
|
(7)
|
repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price of such options, warrants or other
convertible securities;
|
|
(8)
|
cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of Sunoco LP;
|
|
(9)
|
any purchases, redemptions or other acquisitions or retirements for value of Equity Interests made in lieu of withholding taxes in connection with any exercise or exchange of warrants, options or rights to acquire
Equity Interests;
|
|
(10)
|
the repurchase, redemption or other acquisition or redemption or other acquisition or retirement for value of any subordinated Indebtedness pursuant to provisions similar to those described under Repurchase
at the Option of HoldersChange of Control and Repurchase at the Option of HoldersAsset Sales;
provided
that prior to such repurchase, redemption or other acquisition Sunoco LP (or a third party to the
extent permitted by the Indenture) shall have made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the notes and shall have repurchased all notes properly tendered and not withdrawn in connection with such Change
of Control or Asset Sale Offer; or
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36
|
(11)
|
in connection with an acquisition by Sunoco LP or any of its Restricted Subsidiaries, the return to Sunoco LP or any of its Restricted Subsidiaries of Equity Interests of Sunoco LP or its Restricted
Subsidiaries constituting a portion of the purchase consideration in settlement of indemnification claims.
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The amount of
all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Sunoco LP or such Restricted Subsidiary, as the case may be,
pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts $50.0 million or more, by the Board of Directors of the General
Partner, whose resolution with respect thereto shall be delivered to the trustee. For the purposes of determining compliance with this Restricted Payments covenant, if a Restricted Payment meets the criteria of more than one of the
categories of Restricted Payments described in the preceding clauses (1)(11), Sunoco LP will be permitted to classify (or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with
this covenant.
Incurrence of Indebtedness and Issuance of Disqualified Equity
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur) any Indebtedness (including Acquired Debt), and Sunoco LP will not, and will not permit any of its
Restricted Subsidiaries to, issue any Disqualified Equity;
provided
,
however
, that Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Sunoco LP and the Restricted Subsidiaries may
issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Sunoco LPs most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively,
Permitted Debt) or the issuance of any Disqualified Equity described in clause (11) below:
|
(1)
|
the incurrence by Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities,
provided
that, after giving effect to such incurrence,
the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Sunoco LP and its Restricted Subsidiaries
thereunder) and then outstanding does not exceed the greater of (a) $1,500.0 million and (b) the sum of $1,200.0 million and 25.0% of Sunoco LPs Consolidated Net Tangible Assets;
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|
(2)
|
the incurrence by Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness;
|
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(3)
|
the incurrence by Sunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the notes issued on the date of the Indenture, any notes issued in exchange for other notes pursuant to the terms of a
registration rights agreement, and the Note Guarantees;
|
|
(4)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital
Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the
business of Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4),
provided
that after giving effect to
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37
|
such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $45.0 million and
(b) 3.5% of Sunoco LPs Consolidated Net Tangible Assets;
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|
(5)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or
discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (2) or (3) of this paragraph or this clause (5);
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|
(6)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Sunoco LP and any of its Restricted Subsidiaries;
provided
,
however
, that:
|
|
(a)
|
if Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all
Obligations then due with respect to the notes, in the case of Sunoco LP, or the Note Guarantee, in the case of a Guarantor; and
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|
(b)
|
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Sunoco LP or a Restricted Subsidiary of Sunoco LP and (ii) any sale
or other transfer of any such Indebtedness to a Person that is not either Sunoco LP or a Restricted Subsidiary of Sunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Sunoco LP or such
Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
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|
(7)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of Hedging Obligations incurred in the ordinary course of business and not for speculative purposes;
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|
(8)
|
the guarantee by Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Sunoco LP or a Restricted Subsidiary of Sunoco LP that was permitted to be incurred by another provision of this
covenant;
provided
that if the Indebtedness being guaranteed is subordinated to or
pari passu
with the notes, then the guarantee shall be subordinated or
pari passu
, as applicable, to the same extent as the Indebtedness
guaranteed;
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|
(9)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice;
|
|
(10)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under the caption
Merger, Consolidation or Sale of Assets;
|
|
(11)
|
the issuance by any of Sunoco LPs Restricted Subsidiaries to Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity;
provided
,
however
, that:
|
|
(a)
|
any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Sunoco LP or a Restricted Subsidiary of Sunoco LP; and
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|
(b)
|
any sale or other transfer of any such Disqualified Equity to a Person that is not either Sunoco LP or a Restricted Subsidiary of Sunoco LP
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will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by
this clause (11);
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(12)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture but only to the extent that such
liability is the result of Sunoco LPs or any such Restricted Subsidiarys being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and
provided
that, after giving
effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and
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38
|
(13)
|
the incurrence by Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness;
provided
that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness
incurred under this clause (13) and then outstanding does not exceed the greater of (a) $60.0 million and (b) 5.0% of Sunoco LPs Consolidated Net Tangible Assets.
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Sunoco LP will not incur, and will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that
is contractually subordinated in right of payment to any other Indebtedness of Sunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the notes and the applicable Note
Guarantee on substantially identical terms;
provided
,
however
, that no Indebtedness of a Person will be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being
unsecured or by virtue of being secured on a first or junior Lien basis.
For purposes of determining compliance with this
Incurrence of Indebtedness and Issuance of Disqualified Equity covenant, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through
(13) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item
of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the Indenture will initially be deemed to have been incurred on
such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of
Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this covenant;
provided
,
however
, in each such case, that the amount of any such accrual, accretion or
payment is included in Fixed Charges of Sunoco LP as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that Sunoco LP or any Restricted Subsidiary may incur pursuant to this covenant shall
not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Liens
Sunoco LP will not and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause to exist or become
effective any Lien of any kind (other than Permitted Liens) securing Indebtedness (including any Attributable Debt) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under the notes and the Note
Guarantees are secured on an equal and ratable basis or on a senior basis with the obligations so secured until such time as such obligations are no longer secured by a Lien (other than Permitted Liens).
Dividend and Other Payment Restrictions Affecting Subsidiaries
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
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(1)
|
pay dividends or make any other distributions on its Equity Interests to Sunoco LP or any of its Restricted Subsidiaries or to pay any indebtedness owed to Sunoco LP or any of its Restricted Subsidiaries;
|
|
(2)
|
make loans or advances to Sunoco LP or any of its Restricted Subsidiaries; or
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(3)
|
sell, lease or transfer any of its properties or assets to Sunoco LP or any of its Restricted Subsidiaries.
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39
The preceding restrictions will not, however, apply to encumbrances or restrictions existing
under or by reason of:
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(1)
|
agreements as in effect on the date of the Indenture and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements or the Indebtedness to which they
relate;
provided
that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and other
payment restrictions than those contained in those agreements on the date of the Indenture;
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(2)
|
the Indenture, the notes and the Note Guarantees;
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|
(3)
|
applicable law, rule, regulation, order, licenses, permits or similar governmental, judicial or regulatory restriction;
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(4)
|
any instrument governing Indebtedness or Equity Interests of a Person acquired by Sunoco LP or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness
or Equity Interests were incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired;
provided
,
however
, that, in the case of Indebtedness, the incurrence thereof was otherwise permitted by the terms of the Indenture;
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|
(5)
|
customary non-assignment provisions in contracts for purchase, gathering, processing, sale, transportation or exchange of crude oil, natural gas liquids, condensate and natural gas, natural gas storage agreements,
transportation agreements or purchase and sale or exchange agreements, pipeline or terminaling agreements, or similar operational agreements or in licenses or leases, in each case entered into in the ordinary course of business;
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|
(6)
|
purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3)
of the preceding paragraph;
|
|
(7)
|
any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;
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(8)
|
Permitted Refinancing Indebtedness;
provided
that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
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|
(9)
|
Liens permitted to be incurred under the provisions of the covenant described above under the caption Liens that limit the right of the debtor to dispose of the assets subject to such Liens;
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|
(10)
|
provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements, buy/sell agreements and other similar
agreements entered into in the ordinary course of business;
|
|
(11)
|
any agreement or instrument relating to any property or assets acquired after the date of the Indenture, so long as such encumbrance or restriction relates only to the property or assets so acquired and is not and was
not created in anticipation of such acquisitions;
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|
(12)
|
restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and
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|
(13)
|
Hedging Obligations incurred in the ordinary course of business and not for speculative purposes from time to time.
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40
Merger, Consolidation or Sale of Assets
Neither of the Issuers may, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not such Issuer is
the surviving entity); or (2) sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of Sunoco LP and its Subsidiaries, taken as a whole, in one or more related transactions, to
another Person, unless:
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(1)
|
either: (a) such Issuer is the surviving entity; or (b) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made is a Person organized or existing under the laws of the United States, any state of the United States or the District of Columbia;
provided
,
however
, that Finance Corp. may not consolidate
or merge with or into any Person other than a corporation satisfying such requirement so long as Sunoco LP is not a corporation;
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(2)
|
the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made assumes all the
obligations of such Issuer under the notes and the Indenture pursuant to agreements reasonably satisfactory to the trustee;
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(3)
|
immediately after such transaction, no Default or Event of Default exists;
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(4)
|
in the case of a transaction involving Sunoco LP and not Finance Corp., Sunoco LP or the Person formed by or surviving any such consolidation or merger (if other than Sunoco LP), or to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made will either:
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|
(a)
|
be, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption Incurrence of Indebtedness and Issuance of Disqualified
Equity; or
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(b)
|
have a Fixed Charge Coverage Ratio, on the date of such transaction and after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable
four-quarter period, not less than the Fixed Charge Coverage Ratio of Sunoco LP immediately prior to such transaction; and
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|
(5)
|
such Issuer has delivered to the trustee an officers certificate and an opinion of counsel, each stating that such consolidation, merger or disposition and such supplemental indenture (if any) comply with the
Indenture and all conditions precedent therein relating to such transaction have been satisfied;
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provided
that clauses (3) and
(4) shall not apply to any sale of assets of a Restricted Subsidiary to Sunoco LP or another Restricted Subsidiary or the merger or consolidation of a Restricted Subsidiary into any Restricted Subsidiary or Sunoco LP.
Notwithstanding the preceding paragraph, Sunoco LP is permitted to reorganize as any other form of entity in accordance with the
procedures established in the Indenture;
provided
that:
|
(1)
|
the reorganization involves the conversion (by merger, sale, legal conversion, contribution or exchange of assets or otherwise) of Sunoco LP into a form of entity other than a limited partnership formed under
Delaware law;
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|
(2)
|
the entity so formed by or resulting from such reorganization is an entity organized or existing under the laws of the United States, any state thereof or the District of Columbia;
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(3)
|
the entity so formed by or resulting from such reorganization assumes all the obligations of Sunoco LP under the notes and the Indenture pursuant to agreements reasonably satisfactory to the trustee;
|
|
(4)
|
immediately after such reorganization no Default or Event of Default exists; and
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41
|
(5)
|
such reorganization is not materially adverse to the holders of notes (for purposes of this clause (5) it is stipulated that such reorganization shall not be considered materially adverse to the holders of notes
solely because the successor or survivor of such reorganization (a) is subject to federal or state income taxation as an entity or (b) is considered to be an includible corporation of an affiliated group of corporations within
the meaning of Section 1504(b)(i) of the Code or any similar state or local law).
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Upon compliance with the foregoing
requirements with respect to any consolidation or merger or any sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the properties or assets of an Issuer in accordance with the foregoing in which such
Issuer is not the surviving entity, the surviving Person formed by such consolidation or into or with which such Issuer is merged or to which such sale, assignment, transfer, conveyance, lease or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, such Issuer under the indenture with the same effect as if such surviving Person had been named as such Issuer in the indenture, and thereafter (except in the case of a lease of all or
substantially all of such Issuers properties or assets), such Issuer will be relieved of all obligations and covenants under the indenture and the notes.
A Guarantor may not sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person), another Person, other than Sunoco LP or another Guarantor, unless it complies with the alternative conditions described above under Note Guarantees.
Although there is a limited body of case law interpreting the phrase substantially all, there is no precise established definition
of the phrase under applicable law. Accordingly, there may be uncertainty as to whether a particular transaction would involve all or substantially all of the properties or assets of a Person.
Transactions with Affiliates
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of
Sunoco LP (each, an Affiliate Transaction), unless:
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(1)
|
the Affiliate Transaction is on terms that are no less favorable to Sunoco LP or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Sunoco LP or such
Restricted Subsidiary with an unrelated Person; and
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|
(2)
|
with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50.0 million, Sunoco LP delivers to the trustee a resolution of the Board
of Directors of the General Partner set forth in an officers certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with clause (1) of this covenant and that such Affiliate Transaction
has been approved by a majority of the members of the Board of Directors of the General Partner meeting the independence standards prescribed by the exchange upon which Sunoco LPs common units representing limited partner interests in
Sunoco LP are listed for trading.
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The following items will not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of the prior paragraph:
|
(1)
|
any employment agreement, equity award, equity option or equity appreciation agreement or plan or any similar arrangement entered into by Sunoco LP or any of its Restricted Subsidiaries in the ordinary course of
business and payments pursuant thereto;
|
|
(2)
|
transactions between or among Sunoco LP and/or its Restricted Subsidiaries;
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|
(3)
|
transactions with a Person (other than an Unrestricted Subsidiary of Sunoco LP) that is an Affiliate of Sunoco LP solely because Sunoco LP owns, directly or through a Restricted Subsidiary, an Equity
Interest in, or controls, such Person;
|
42
|
(4)
|
any issuance of Equity Interests (other than Disqualified Equity) of Sunoco LP to Affiliates of Sunoco LP;
|
|
(5)
|
Restricted Payments or Permitted Investments that do not violate the provisions of the Indenture described above under the caption Restricted Payments;
|
|
(6)
|
customary compensation, indemnification and other benefits made available to officers, directors or employees of Sunoco LP, a Restricted Subsidiary of Sunoco LP or the General Partner, including reimbursement
or advancement of out-of-pocket expenses and provisions of officers and directors liability insurance;
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(7)
|
in the case of contracts for purchase, sale, transportation and marketing of crude oil, natural gas, condensate and natural gas liquids, hedging agreements, and handling, storage, or other operational contracts, any
such contracts are entered into in the ordinary course of business on terms substantially similar to those contained in similar contracts entered into by Sunoco LP or any of its Restricted Subsidiaries and third parties, or if neither
Sunoco LP nor any of its Restricted Subsidiaries has entered into a similar contract with a third party, that the terms are no less favorable than those available from third parties on an arms length basis, as determined by the Board of
Directors of the General Partner;
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|
(8)
|
loans or advances to employees in the ordinary course of business not to exceed $2.5 million in the aggregate at any one time outstanding;
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(9)
|
transactions effected in accordance with the terms of (a) the Partnership Agreement, (b) the Contribution Agreement, dated September 25, 2012, by and among Susser Petroleum Partners LP, Susser Petroleum Partners GP LLC,
Susser Holdings Corporation, Susser Holdings, L.L.C., Stripes LLC and Susser Petroleum Company LLC, (c) the Omnibus Agreement, dated September 25, 2012, by and among Susser Petroleum Partners LP, Susser Petroleum Partners GP LLC and Susser Holdings
Corporation, (d) the Transportation Agreement, dated September 25, 2012, between Susser Petroleum Operating Company LLC and Susser Petroleum Company LLC, (e) the Fuel Distribution Agreement, dated September 25, 2012, by and among Susser Petroleum
Operating Company LLC, Susser Holdings Corporation, Stripes LLC and Susser Petroleum Company LLC, and (f) each other agreement in effect on the date of the Indenture that is described in the final Offering Memorandum of the Issuers dated July 15,
2015 (the Offering Memorandum), as each such agreement is in effect on the date of the Indenture, and any amendment or extension of such agreement so long as the terms of such amendment or extension, taken as a whole, are not less
advantageous to Sunoco LP or the relevant Restricted Subsidiary (as determined by the Board of Directors of the General Partner in its reasonable good faith judgment) in any material respect than the agreement so amended or extended; and
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(10)
|
any transaction with respect to which Sunoco LP has obtained an opinion from an independent accounting, appraisal or investment banking firm of national standing to the effect that such transaction is fair from a
financial point of view to Sunoco LP and its Restricted Subsidiaries, as applicable.
|
Business Activities
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses,
except to such extent as would not be material to Sunoco LP and its Restricted Subsidiaries taken as a whole.
Finance Corp. will not
hold any material assets, become liable for any material obligations or engage in any significant business activities;
provided
that Finance Corp. may be a co-obligor or guarantor with respect to Indebtedness if Sunoco LP is an obligor
on such Indebtedness and the net proceeds of such Indebtedness are received by Sunoco LP, Finance Corp. or one or more Guarantors. At any time after Sunoco LP is a corporation, Finance Corp. may consolidate or merge with or into
Sunoco LP or any Restricted Subsidiary.
43
Additional Guarantees
If, after the date of the Indenture, any Restricted Subsidiary of Sunoco LP that is not already a Guarantor guarantees any Indebtedness of
either of the Issuers or any Guarantor under a Credit Facility, or any Domestic Subsidiary, if not then a Guarantor, incurs any Indebtedness under any Credit Facility, then in either case that Subsidiary will become a Guarantor by executing a
supplemental indenture and delivering it to the trustee within 20 business days of the date on which it guaranteed or incurred such Indebtedness, as the case may be;
provided
,
however
, that the preceding shall not apply to Subsidiaries
of Sunoco LP that have been properly designated as Unrestricted Subsidiaries in accordance with the Indenture for so long as they continue to constitute Unrestricted Subsidiaries. Notwithstanding the preceding, any Note Guarantee of a
Restricted Subsidiary that was incurred pursuant to this paragraph as a result of its guarantee of any Indebtedness shall provide by its terms that it shall be automatically and unconditionally released upon the release or discharge of the guarantee
that resulted in the creation of such Restricted Subsidiarys Note Guarantee, except a discharge or release by, or as a result of payment under, such guarantee.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of the General Partner may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation
would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Sunoco LP and its Restricted Subsidiaries in the Subsidiary designated as
an Unrestricted Subsidiary will be deemed to be either an Investment made as of the time of the designation that will reduce the amount available for Restricted Payments under the covenant described above under the caption Restricted
Payments or a Permitted Investment under one or more clauses of the definition of Permitted Investments, as determined by Sunoco LP;
provided
that any designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any designation of a Subsidiary of
Sunoco LP as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a copy of a resolution of the Board of Directors of the General Partner giving effect to such designation and an officers certificate
certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption Restricted Payments. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of
Sunoco LP as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption Incurrence of Indebtedness and Issuance of Disqualified Equity, Sunoco LP
will be in default of such covenant.
The Board of Directors of the General Partner may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary of Sunoco LP;
provided
that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Sunoco LP of any outstanding Indebtedness of such Unrestricted Subsidiary,
and such designation will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption Incurrence of Indebtedness and Issuance of Disqualified Equity, calculated on a pro forma basis
as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.
Limitation on Sale and Leaseback Transactions
Sunoco LP will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided
that Sunoco LP or any Restricted Subsidiary may enter into a sale and leaseback transaction if the transfer of assets in that sale and leaseback transaction is permitted by, and Sunoco LP or such Restricted Subsidiary
applies the proceeds of such transaction in compliance with, the covenant described above under the caption Repurchase at the Option of HoldersAsset Sales.
44
Reports
Whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, Sunoco LP will furnish (whether
through hard copy or internet access) to the holders of notes or cause the trustee to furnish to the holders of notes, within the time periods specified in the SECs rules and regulations:
|
(1)
|
all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and
10-K
if Sunoco LP were required to file such reports as a
non-accelerated filer; and
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|
(2)
|
all current reports that would be required to be filed with the SEC on Form 8-K if Sunoco LP were required to file such reports.
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All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports,
including Section 3-10 of Regulation S-X. Each annual report on Form 10-K will include a report on Sunoco LPs consolidated financial statements by Sunoco LPs independent registered public accounting firm. In
addition, Sunoco LP will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.
If, at any time
Sunoco LP is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Sunoco LP will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with the SEC within
the time periods specified above unless the SEC will not accept such a filing;
provided
that, for so long as Sunoco LP is not subject to the periodic reporting requirements of the Exchange Act for any reason, the time period for filing
reports on Form 8-K shall be 5 business days after the event giving rise to the obligation to file such report. Sunoco LP will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the
foregoing, the SEC will not accept Sunoco LPs filings for any reason, Sunoco LP will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if Sunoco LP were required to
file those reports with the SEC.
Sunoco LP will be deemed to have furnished such reports to the trustee and the holders of notes if
it has filed such reports with the SEC using the EDGAR filing system and such reports are publicly available.
Events of Default and
Remedies
Each of the following is an Event of Default:
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(1)
|
default for 30 days in the payment when due of interest on the notes;
|
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(2)
|
default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the notes;
|
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(3)
|
failure by Sunoco LP or any Guarantor to (a) make a Change of Control Offer within the time periods set forth, or to consummate a purchase of the notes when required pursuant to the terms described, under the
caption Repurchase at the Option of HoldersChange of Control, (b) make an Asset Sale Offer within the time periods set forth, or to consummate a purchase of the notes when required pursuant to the terms described, under
the caption Repurchase at the Option of HoldersAsset Sales or (c) comply with the provisions described under the caption Certain CovenantsMerger, Consolidation or Sale of Assets;
provided
that, with respect to (b) and (c), such failure will not constitute an Event of Default for 30 days if such failure is capable of cure;
|
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(4)
|
failure by Sunoco LP for 180 days after notice by the trustee or holders of 25% in aggregate principal amount of notes outstanding to comply with the provisions described under Reports;
|
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(5)
|
failure by Sunoco LP or any Guarantor for 60 days after written notice by the trustee or holders of 25% in aggregate principal amount of notes outstanding to comply with any of its other agreements in the
Indenture;
|
45
|
(6)
|
default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Sunoco LP or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by Sunoco LP or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, if that default:
|
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(a)
|
is caused by a failure to pay principal of, or interest or premium, if any, on Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a Payment
Default); or
|
|
(b)
|
results in the acceleration of such Indebtedness prior to its express maturity, and
|
in each
case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or
more,
provided
,
however
, that if, prior to any acceleration of notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded, or (iii) such Indebtedness is repaid during the 10 business
day period commencing upon the end of any applicable grace period for such Payment Default or the occurrence of such acceleration, as applicable, any Default or Event of Default (but not any acceleration of notes) caused by such Payment Default or
acceleration shall automatically be rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;
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(7)
|
failure by an Issuer or any of Sunoco LPs Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days;
|
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(8)
|
except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting
on behalf of any Guarantor, denies or disaffirms its Obligations under its Note Guarantee; and
|
|
(9)
|
certain events of bankruptcy or insolvency described in the Indenture with respect to Finance Corp., Sunoco LP or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of its Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary.
|
In the case of an Event of Default arising
from certain events of bankruptcy or insolvency, with respect to Finance Corp., Sunoco LP or any Restricted Subsidiary of Sunoco LP that is a Significant Subsidiary or any group of Restricted Subsidiaries of Sunoco LP that, taken
together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25%
in aggregate principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.
Subject to
certain limitations, holders of a majority in aggregate principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of notes notice of any continuing Default or
Event of Default known to it if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest or premium, if any.
Subject to the provisions of the Indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing, the
trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any holders of notes unless such holders have offered to the trustee indemnity or security satisfactory to the trustee in
its sole discretion against any loss, liability or expense. No holder of a note may pursue any remedy with respect to the Indenture unless:
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(1)
|
such holder has previously given the trustee notice that an Event of Default is continuing;
|
|
(2)
|
holders of at least 25% in aggregate principal amount of the then outstanding notes have requested the trustee to pursue the remedy;
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46
|
(3)
|
such holders have offered the trustee security or indemnity satisfactory to the trustee in its sole discretion against any loss, liability or expense;
|
|
(4)
|
the trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and
|
|
(5)
|
holders of a majority in aggregate principal amount of the then outstanding notes have not given the trustee a direction inconsistent with such request within such 60-day period.
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The holders of a majority in aggregate principal amount of the then outstanding notes by notice to the trustee may, on behalf of the holders
of all of the notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the
principal of, notes.
The Issuers and the Guarantors are required to deliver to the trustee annually a statement regarding compliance with
the Indenture. Within ten business days of becoming aware of any Default or Event of Default, the Issuers and the Guarantors are required to deliver to the trustee a statement specifying such Default or Event of Default.
No Recourse to Trustee, General Partner or Personal Liability of Directors, Officers, Employees and Stockholders
None of the trustee, the General Partner or any director, officer, partner, member, employee, incorporator, manager or unit holder or other
owner of any Equity Interest of the trustee, General Partner, the Issuers or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under the notes, the Indenture, the Note Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes and the
Note Guarantees. The waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
The Issuers may, at their option and at any time, elect to have all of the Issuers obligations discharged with respect to the
outstanding notes and all Obligations of the Guarantors discharged with respect to their Note Guarantees (Legal Defeasance) except for:
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(1)
|
the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium, if any, on, such notes when such payments are due from the trust referred to below;
|
|
(2)
|
the Issuers obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
|
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(3)
|
the rights, powers, trusts, duties and immunities of the trustee, and the Issuers and the Guarantors Obligations in connection therewith; and
|
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(4)
|
the Legal Defeasance and Covenant Defeasance provisions of the Indenture.
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In
addition, Sunoco LP may, at its option and at any time, elect to have the obligations of the Issuers released with respect to certain covenants (including Sunoco LPs obligation to make Change of Control Offers and Asset Sale Offers)
that are described in the Indenture (Covenant Defeasance) and all Obligations of the Guarantors with respect to their Note Guarantees discharged, and thereafter any omission to comply with those covenants or Note Guarantees will not
constitute a Default or Event of Default. If Covenant Defeasance occurs, certain events (not including non-payment and bankruptcy, receivership, rehabilitation and insolvency events relating to Sunoco LP) described under Events of
Default and Remedies will no longer constitute an Event of Default.
47
In order to exercise either Legal Defeasance or Covenant Defeasance:
|
(1)
|
the Issuers must irrevocably deposit with the trustee, in trust, for the benefit of the holders of notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on
the outstanding notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Issuers must specify whether the notes are being defeased to such stated date for payment or to a particular redemption
date;
|
|
(2)
|
in the case of Legal Defeasance, the Issuers must deliver to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) the Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that,
the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
|
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(3)
|
in the case of Covenant Defeasance, the Issuers must deliver to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not
occurred;
|
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(4)
|
no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);
|
|
(5)
|
such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which Sunoco LP or any of
its Subsidiaries is a party or by which Sunoco LP or any of its Subsidiaries is bound;
|
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(6)
|
the Issuers must deliver to the trustee an officers certificate stating that the deposit was not made by the Issuers with the intent of preferring the holders of notes over the other creditors of the Issuers with
the intent of defeating, hindering, delaying or defrauding any creditors of the Issuers or others; and
|
|
(7)
|
the Issuers must deliver to the trustee an officers certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied
with.
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Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the Indenture, the notes or the related Note Guarantees may be amended or
supplemented with the consent of the holders of at least a majority in aggregate principal amount of the notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any
existing Default or Event of Default or compliance with any provision of the Indenture or the notes or the Note Guarantees may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding notes
(including consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).
Without the consent of each
holder of notes affected, an amendment, supplement or waiver may not (with respect to any notes held by a non-consenting holder):
|
(1)
|
reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;
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48
|
(2)
|
reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption or repurchase of the notes (other than provisions relating to the covenants described above under
the caption Repurchase at the Option of Holders);
|
|
(3)
|
reduce the rate of or change the time for payment of interest, including default interest, on any note;
|
|
(4)
|
waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on, the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate
principal amount of the then outstanding notes and a waiver of the payment default that resulted from such acceleration);
|
|
(5)
|
make any note payable in money other than that stated in the notes;
|
|
(6)
|
make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of, or interest or premium, if any, on, the notes (other than as
permitted by clause (7) below);
|
|
(7)
|
waive a redemption or repurchase payment with respect to any note (other than a payment required by one of the covenants described above under the caption Repurchase at the Option of Holders);
|
|
(8)
|
release any Guarantor from any of its obligations under its Note Guarantee or the Indenture, except in accordance with the terms of the Indenture; or
|
|
(9)
|
make any change in the preceding amendment, supplement and waiver provisions.
|
Notwithstanding
the preceding, without the consent of any holder of notes, the Issuers, the Guarantors and the trustee may amend or supplement the Indenture, the notes or the Note Guarantees:
|
(1)
|
to cure any ambiguity, defect or inconsistency;
|
|
(2)
|
to provide for uncertificated notes in addition to or in place of certificated notes;
|
|
(3)
|
to provide for the assumption of an Issuers or a Guarantors obligations to holders of notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of such
Issuers or such Guarantors assets, as applicable;
|
|
(4)
|
to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the Indenture of any such holder;
|
|
(5)
|
to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
|
|
(6)
|
to conform the text of the Indenture or the Note Guarantees to any provision of the section entitled Description of Notes in the Offering Memorandum, to the extent that such text of the Indenture or Note
Guarantee was intended to reflect such provision of such section;
|
|
(7)
|
to provide for the issuance of additional notes in accordance with the limitations set forth in the Indenture;
|
|
(8)
|
to allow any Guarantor to execute a supplemental indenture and/or a notation of a Note Guarantee with respect to the notes or to reflect the addition or release of a Note Guarantee in accordance with the Indenture;
|
|
(9)
|
to secure the notes and/or the Note Guarantees; or
|
|
(10)
|
to provide for the reorganization of Sunoco LP as any other form of entity, in accordance with the provisions described under Certain CovenantsMerger, Consolidation or Sale of Assets.
|
49
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as to all notes issued thereunder (except as to surviving rights of
transfer or exchange of the notes and as otherwise specified in the Indenture), when:
|
(a)
|
all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to the Issuers, have
been delivered to the trustee for cancellation; or
|
|
(b)
|
all notes that have not been delivered to the trustee for cancellation have become due and payable or will become due and payable within one year by reason of the mailing of a notice of redemption or otherwise and the
Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public
accountants, to pay and discharge the entire Indebtedness on the notes not delivered to the trustee for cancellation for principal and premium, if any, and accrued interest to the date of fixed maturity or redemption;
|
|
(2)
|
no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit
will not result in a breach or violation of, or constitute a default under, any other instrument to which Sunoco LP or any Guarantor is a party or by which Sunoco LP or any Guarantor is bound;
|
|
(3)
|
the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and
|
|
(4)
|
the Issuers have delivered irrevocable instructions to the trustee under the Indenture to apply the deposited money toward the payment of the notes at fixed maturity or on the redemption date, as the case may be.
|
In addition, the Issuers must deliver an officers certificate and an opinion of counsel to the trustee stating that
all conditions precedent to satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of the Issuers or any Guarantor, the Indenture limits the right of the trustee to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Trust
Indenture Act) after a Default has occurred and is continuing, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign.
The Indenture provides that in case an Event of Default occurs and is continuing, the trustee will exercise such of the rights and powers
vested in it by the Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
Governing Law
The
Indenture, the notes and the Note Guarantees are governed by, and construed in accordance with, the laws of the State of New York.
50
Additional Information
Anyone who receives this prospectus may obtain a copy of the Indenture and the Partnership Agreement without charge by writing to
Sunoco LP at 8020 Park Lane, Suite 200, Dallas, Texas 75231, Attention: Chief Financial Officer.
Book-Entry, Delivery and Form
The notes will be issued in registered global form (the Global Notes). The Global Notes will be deposited upon issuance
with the trustee as custodian for DTC and registered in the name of DTCs nominee, Cede & Co., in each case for credit to an account of a direct or indirect participant in DTC as described below. Beneficial interests in the Global
Notes may be held through the Euroclear System (Euroclear) and Clearstream Banking, S.A. (Clearstream) (as indirect participants in DTC).
The Global Notes may be transferred, in whole but not in part, only to another nominee of DTC or to a successor of DTC or its nominee.
Beneficial interests in the Global Notes may not be exchanged for notes in registered, certificated form (Certificated Notes) except in the limited circumstances described below. Read Exchange of Global Notes for Certificated
Notes.
In addition, transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of
DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.
Depository Procedures
The
following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are
subject to changes by them. The Issuers take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.
DTC has advised the Issuers that DTC is a limited-purpose trust company created to hold securities for its participating organizations
(collectively, the Participants) and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTCs system is also available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the Indirect Participants). Persons who are not Participants may beneficially own securities held by
or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Issuers that, pursuant to procedures established by it:
|
(1)
|
upon deposit of the Global Notes, DTC will credit the accounts of the Participants by or through whom purchases are made with portions of the principal amount of the Global Notes; and
|
|
(2)
|
ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).
|
Investors in the Global Notes who are Participants in DTCs system may hold their interests therein directly through DTC. Investors in
the Global Notes who are not Participants may hold their interests therein indirectly
51
through organizations (including Euroclear and Clearstream) which are Participants in such system. Euroclear and Clearstream may hold interests in the Global Notes on behalf of their participants
through customers securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./N.V., as operator of Euroclear, and Citibank, N.A., as operator of Clearstream. All interests in a
Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such
systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that
extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not
participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
Except as described below, owners of interests in the Global Notes will not have notes registered in their names, will not receive physical
delivery of notes in certificated form and will not be considered the registered owners or holders thereof under the Indenture for any purpose.
Payments in respect of the principal of, and interest and premium, if any, on, a Global Note registered in the name of DTC or its nominee will
be payable to DTC in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Issuers and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners
of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Issuers, the trustee nor any agent of the Issuers or the trustee has or will have any responsibility or liability for:
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(1)
|
any aspect of DTCs records or any Participants or Indirect Participants records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining,
supervising or reviewing any of DTCs records or any Participants or Indirect Participants records relating to the beneficial ownership interests in the Global Notes; or
|
|
(2)
|
any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
|
DTC has advised the Issuers that its current practice, at the due date of any payment in respect of securities such as the notes (including
principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment on such payment date. Each relevant Participant is credited with
an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be
governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or the Issuers. Neither the Issuers nor the trustee will
be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the beneficial owners of the notes, and the Issuers and the trustee may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
Transfers between the Participants in DTC will be effected in accordance with DTCs procedures,
and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions
applicable to the notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTCs rules on
behalf of Euroclear or Clearstream, as the case may be, by its depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the
52
established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its
depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable
to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised the Issuers that it will take any action permitted to be taken by a holder of notes only at the direction of one or more
Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for notes in certificated form, and to distribute such notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither the Issuers nor the trustee nor any of their respective
agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
|
(1)
|
DTC (a) notifies the Issuers that it is unwilling or unable to continue as depositary for the Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the
Issuers fail to appoint a successor depositary within 90 days; or
|
|
(2)
|
there has occurred and is continuing an Event of Default and DTC notifies the trustee of its decision to exchange the Global Note for Certificated Notes.
|
Beneficial interests in a Global Note may also be exchanged for Certificated Notes in the other limited circumstances permitted by the
indenture, including if an affiliate of ours acquires such interests. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Exchange of Certificated
Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any Global Note.
Certain Definitions
Set
forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all defined terms used therein, as well as any other capitalized terms used herein for which no definition is provided.
2023 Notes Issue Date
means April 1, 2015, the date of original issue of the Issuers 6.375% Senior Notes due
2023.
Acquired Debt
means, with respect to any specified Person:
|
(1)
|
Indebtedness of any other Person existing at the time such other Person is merged with or into or becomes a
Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a
|
53
|
Subsidiary of, such specified Person, but excluding Indebtedness which is extinguished, retired or repaid in connection with such Person merging with or becoming a Subsidiary of such specified
Person; and
|
|
(2)
|
Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
|
Affiliate
of any specified Person means any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of this definition, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of
the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;
provided
that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For
purposes of this definition, the terms controlling, controlled by and under common control with have correlative meanings.
Applicable Premium
means with respect to any note on any redemption date, an amount equal to the greater of:
|
(1)
|
1.0% of the principal amount of the note; or
|
|
(a)
|
the present value at such redemption date of (i) the redemption price of the note at August 1, 2017 (such redemption price being set forth in the table under the caption Optional Redemption)
plus (ii) all required interest payments due on the note through August 1, 2017 (in each case excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption
date plus 50 basis points; over
|
|
(b)
|
the principal amount of the note.
|
Asset Sale
means:
|
(1)
|
the sale, lease, conveyance or other disposition of any properties or assets;
provided
,
however
, that the sale, lease, conveyance or other disposition of all or substantially all of the properties or
assets of Sunoco LP and its Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption Repurchase at the Option of HoldersChange of Control and/or the provisions
described above under the caption Certain CovenantsMerger, Consolidation or Sale of Assets and not by the provisions of the Asset Sale covenant; and
|
|
(2)
|
the issuance of Equity Interests in any of Sunoco LPs Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries.
|
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
|
(1)
|
any single transaction or series of related transactions that involves properties or assets having a Fair Market Value of less than $25.0 million;
|
|
(2)
|
a transfer of properties or assets between or among Sunoco LP and its Restricted Subsidiaries;
|
|
(3)
|
an issuance or sale of Equity Interests by a Restricted Subsidiary of Sunoco LP to Sunoco LP or to a Restricted Subsidiary of Sunoco LP;
|
|
(4)
|
the sale or lease of products, services or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete properties or assets in the ordinary course of
business;
|
|
(5)
|
the sale or other disposition of cash or Cash Equivalents, Hedging Obligations or other financial instruments in the ordinary course of business;
|
54
|
(6)
|
a Restricted Payment that does not violate the covenant described above under the caption Certain CovenantsRestricted Payments or a Permitted Investment;
|
|
(7)
|
any trade or exchange by Sunoco LP or any Restricted Subsidiary of Sunoco LP of properties or assets of any type for properties or assets of any type owned or held by another Person, including any disposition
of some but not all of the Equity Interests of a Restricted Subsidiary of Sunoco LP in exchange for assets or properties and after which the Person whose Equity Interests have been so disposed of continues to be a Restricted Subsidiary,
provided
that the Fair Market Value of the properties or assets traded or exchanged by Sunoco LP or such Restricted Subsidiary (together with any cash or Cash Equivalents and liabilities assumed) is reasonably equivalent to the Fair
Market Value of the properties or assets (together with any cash or Cash Equivalents and liabilities assumed) to be received by Sunoco LP or such Restricted Subsidiary; and
provided further
that any cash received must be applied in
accordance with the provisions described above under the caption Repurchase at the Option of HoldersAsset Sales; and
|
|
(8)
|
the creation or perfection of a Lien that is not prohibited by the covenant described above under the caption Certain CovenantsLiens, and any disposition in connection with a Permitted Lien.
|
Asset Sale Offer
has the meaning assigned to that term under Repurchase at the Option of
HoldersAsset Sales.
Attributable Debt
in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at
the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP;
provided
,
however
, that, if such sale
and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capital Lease Obligation.
Available Cash
has the meaning assigned to such term in the Partnership Agreement, as in effect on the date of the
Indenture.
Beneficial Owner
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that, in calculating the beneficial ownership of any particular person (as that term is used in Section 13(d)(3) of the Exchange Act), such person will be deemed to have beneficial ownership of all
securities that such person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms Beneficially Owns and
Beneficially Owned have a corresponding meaning.
Board of Directors
means:
|
(1)
|
with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
|
|
(2)
|
with respect to a partnership, the board of directors or board of managers of the general partner of the partnership or, if such general partner is itself a limited partnership, then the board of directors or board of
managers of its general partner;
|
|
(3)
|
with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and
|
|
(4)
|
with respect to any other Person, the board or committee of such Person serving a similar function.
|
Capital Lease Obligation
means, at the time any determination is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP.
55
Capital Stock
means:
|
(1)
|
in the case of a corporation, corporate stock;
|
|
(2)
|
in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
|
|
(3)
|
in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
|
|
(4)
|
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, the issuing Person,
|
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.
Cash Equivalents
means:
|
(1)
|
United States dollars or, in an amount up to the amount necessary or appropriate to fund local operating expenses, other currencies;
|
|
(2)
|
securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (
provided
that the full faith and credit of the
United States is pledged in support of those securities) having maturities of not more than one year from the date of acquisition;
|
|
(3)
|
certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers acceptances with maturities not exceeding six months and overnight bank deposits, in
each case, with any domestic commercial bank having capital and surplus in excess of $250.0 million and a Thomson Bank Watch Rating of B or better;
|
|
(4)
|
repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
|
|
(5)
|
commercial paper having one of the two highest ratings obtainable from Moodys or S&P and, in each case, maturing within six months after the date of acquisition; and
|
|
(6)
|
money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.
|
Change of Control
means the occurrence of any of the following:
|
(1)
|
the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or
assets of Sunoco LP and its Subsidiaries taken as a whole to any person (as that term is used in Section 13(d)(3) of the Exchange Act), other than a Qualified Owner, which occurrence is followed by a Ratings Decline within
90 days; or
|
|
(2)
|
the adoption of a plan relating to the liquidation or dissolution of Sunoco LP or the removal of the General Partner by the limited partners of Sunoco LP; or
|
|
(3)
|
the consummation of any transaction (including any merger or consolidation), the result of which is that any person (as that term is used in Section 13(d)(3) of the Exchange Act), other than a Qualified
Owner, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the General Partner or of Sunoco LP, measured by voting power rather than number of shares, which occurrence is followed by a Ratings Decline
within 90 days.
|
56
Notwithstanding the preceding, a conversion of Sunoco LP from a limited partnership to a
corporation, limited liability company or other form of entity or an exchange of all of the outstanding limited partnership interests for capital stock in a corporation, for member interests in a limited liability company or for Equity Interests in
such other form of entity shall not constitute a Change of Control, so long as immediately following such conversion or exchange either (i) the persons (as that term is used in Section 13(d)(3) of the Exchange Act) who
Beneficially Owned the Capital Stock of Sunoco LP immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests
in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity, and, in either case no person (as that term is used in Section 13(d)(3) of the Exchange Act),
excluding any Qualified Owner, Beneficially Owns more than 50% of the Voting Stock of such entity or (ii) one or more Qualified Owners in the aggregate own more than 50% of the Voting Stock of such entity.
Change of Control Offer
has the meaning assigned to that term under Repurchase at the Option of
HoldersChange of Control.
Consolidated Cash Flow
means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus, without duplication:
|
(1)
|
an amount equal to (i) any extraordinary loss plus (ii) any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale or the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries, in each case, to the extent such losses were deducted in computing such Consolidated Net Income; plus
|
|
(2)
|
provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
|
|
(3)
|
the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including amortization of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers acceptance financings, and net of all payments, if any, pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income;
plus
|
|
(4)
|
depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses, charges or losses (excluding any such
non-cash expense, charge or loss to the extent that it represents an accrual of or reserve for cash expenses, charges or losses in any future period or amortization of a prepaid cash expense, charge or loss that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses, charges or losses were deducted in computing such Consolidated Net Income; plus
|
|
(5)
|
unrealized non-cash losses resulting from foreign currency balance sheet adjustments required by GAAP to the extent such losses were deducted in computing such Consolidated Net Income; plus
|
|
(6)
|
all extraordinary or non-recurring items of gain or loss, or revenue or expense; minus
|
|
(7)
|
non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business,
|
in each case, on a consolidated basis and determined in accordance with GAAP.
57
Consolidated Net Income
means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP;
provided
that:
|
(1)
|
the aggregate Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or
similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;
|
|
(2)
|
the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, partners or members;
|
|
(3)
|
the cumulative effect of a change in accounting principles will be excluded;
|
|
(4)
|
unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including those resulting from the application of Financial Accounting Standards Board Accounting
Standards Codification (ASC) 815 will be excluded; and
|
|
(5)
|
any nonrecurring charges relating to any premium or penalty paid, write off of deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity will be
excluded.
|
Consolidated Net Tangible Assets
means, with respect to any Person at any date of
determination, the aggregate amount of total assets included in such Persons most recent quarterly or annual consolidated balance sheet prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after
(i) adding the aggregate incremental amount of total assets that would have resulted from an acquisition of assets from an Affiliate that is accounted for as a pooling had it been accounted for using purchase accounting and (ii) deducting
the following amounts: (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet.
Credit Agreement
means that certain Credit Agreement, dated as of September 25, 2014, by and among Sunoco LP
(f/k/a/ Susser Petroleum Partners LP), the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent for the lenders and collateral agent, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time (including increasing the amount of available borrowings
thereunder).
Credit Facilities
means, one or more debt facilities (including the Credit Agreement) or commercial paper
facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, accounts receivable financing (including through the sale of accounts receivable to such lenders or to special purpose entities
formed to borrow from such lenders against such accounts receivable) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time (including increasing the amount of available borrowings thereunder).
Default
means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
Designated Non-cash Consideration
means the fair market value (as determined in good faith by Sunoco LP) of
non-cash consideration received by Sunoco LP or a Restricted Subsidiary in connection with an
58
Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an officers certificate, less the amount of Cash Equivalents received in connection with a subsequent sale
of such Designated Non-cash Consideration.
Disqualified Equity
means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any
Equity Interest that would constitute Disqualified Equity solely because the holders of the Equity Interest have the right to require Sunoco LP to repurchase or redeem such Equity Interest upon the occurrence of a change of control or an asset
sale will not constitute Disqualified Equity if the terms of such Equity Interest provide that Sunoco LP may not repurchase or redeem any such Equity Interest pursuant to such provisions unless such repurchase or redemption complies with the
covenant described above under the caption Certain CovenantsRestricted Payments.
Domestic
Subsidiary
means any Restricted Subsidiary of Sunoco LP that was formed under the laws of the United States or any state of the United States or the District of Columbia.
Equity Interests
means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).
Equity Offering
means any public or
private sale of Equity Interests (other than Disqualified Equity and other than to a Subsidiary) made for cash on a primary basis by Sunoco LP after the date of the Indenture.
Existing Indebtedness
means the aggregate principal amount of Indebtedness of Sunoco LP and its Subsidiaries (other
than Indebtedness under the Credit Agreement) in existence on the date of the Indenture, until such amounts are repaid.
Fair
Market Value
means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the General
Partner (unless otherwise provided in the Indenture).
Fixed Charge Coverage Ratio
means with respect to any specified
Person for any four-quarter reference period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. If the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the applicable
four-quarter reference period and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date), then the Fixed Charge Coverage Ratio will be calculated giving pro
forma effect to such incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity, and the use of the proceeds therefrom, as if
the same had occurred at the beginning of such period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
|
(1)
|
acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred
on the first day of the four-quarter reference period, including any Consolidated Cash Flow and any pro forma expense and cost reductions that
|
59
|
have occurred or are reasonably expected to occur, in the reasonable judgment of the chief financial or accounting officer of Sunoco LP (regardless of whether those cost savings or operating
improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto);
|
|
(2)
|
the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will
be excluded;
|
|
(3)
|
the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be
excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
|
|
(4)
|
interest income reasonably anticipated by such Person to be received during the applicable four quarter period from cash or Cash Equivalents held by such Person or any Restricted Subsidiary of such Person, which cash or
Cash Equivalents exist on the Calculation Date or will exist as a result of the transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio, will be included;
|
|
(5)
|
if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate in effect from the beginning of the applicable period to the Calculation Date
had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and
|
|
(6)
|
if any Indebtedness is incurred under a revolving credit facility and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such Indebtedness for
the four fiscal quarters subject to the pro forma calculation.
|
Fixed Charges
means, with respect to any
specified Person for any period, (A) the sum, without duplication, of:
|
(1)
|
the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including amortization of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus
|
|
(2)
|
the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus
|
|
(3)
|
any interest on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not
such guarantee or Lien is called upon; plus
|
|
(4)
|
all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Equity of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in
Equity Interests of Sunoco LP (other than Disqualified Equity) or to Sunoco LP or a Restricted Subsidiary of Sunoco LP; minus
|
(B) to the extent included in (A) above, write-offs of deferred financing costs of such Person and its Restricted Subsidiaries during such period
and any charge related to, or any premium or penalty paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity.
60
GAAP
means generally accepted accounting principles in the United States, as
in effect on the date of the Indenture.
General Partner
means Sunoco GP LLC, a Delaware limited liability company, and
its successors and permitted assigns as general partner of Sunoco LP or as the business entity with the ultimate authority to manage the business and operations of Sunoco LP.
Government Securities
means direct obligations of, or obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of the United States of America is pledged.
guarantee
means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of
business, direct or indirect, in any manner including by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
Guarantors
means each of:
|
(1)
|
the Subsidiaries of Sunoco LP executing the Indenture as initial Guarantors; and
|
|
(2)
|
any other Subsidiary of Sunoco LP that becomes a Guarantor in accordance with the provisions of the Indenture,
|
and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the
Indenture.
Hedging Obligations
means, with respect to any specified Person, the obligations of such Person under:
|
(1)
|
interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements entered into with one or more financial institutions and
designed to reduce costs of borrowing or to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred;
|
|
(2)
|
other agreements or arrangements designed to manage interest rates or interest rate risk;
|
|
(3)
|
foreign exchange contracts and currency protection agreements entered into with one of more financial institutions and designed to protect the Person or any of its Restricted Subsidiaries entering into the agreement
against fluctuations in currency exchanges rates with respect to Indebtedness incurred;
|
|
(4)
|
any commodity futures contract, commodity option or other similar agreement or arrangement designed to protect against fluctuations in the price of Hydrocarbons used, produced, processed or sold by that Person or any of
its Restricted Subsidiaries at the time; and
|
|
(5)
|
other agreements or arrangements designed to protect such Person or any of its Restricted Subsidiaries against fluctuations in currency exchange rates or commodity prices.
|
Hydrocarbons
means crude oil, natural gas, natural gas liquids, casinghead gas, drip gasoline, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.
Indebtedness
means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:
|
(1)
|
in respect of borrowed money;
|
|
(2)
|
evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
|
61
|
(3)
|
in respect of bankers acceptances;
|
|
(4)
|
representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;
|
|
(5)
|
representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or
|
|
(6)
|
representing any Hedging Obligations,
|
if and to the extent any of the preceding items (other than letters of
credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term Indebtedness includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person.
Notwithstanding the foregoing, the following shall not constitute Indebtedness:
|
(1)
|
accrued expenses and trade accounts payable arising in the ordinary course of business;
|
|
(2)
|
any obligation of Sunoco LP or any of its Restricted Subsidiaries in respect of bid, performance, surety and similar bonds issued for the account of Sunoco LP and any of its Restricted Subsidiaries in the
ordinary course of business, including guarantees and obligations of Sunoco LP or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
|
|
(3)
|
any Indebtedness that has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or Government Securities (in an amount sufficient to satisfy all such Indebtedness at fixed maturity or
redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness and subject to no other Liens, and the other applicable terms of the
instrument governing such Indebtedness;
|
|
(4)
|
any obligation arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
provided
,
however
, that such obligation is extinguished within five business days of its incurrence; and
|
|
(5)
|
any obligation arising from any agreement providing for indemnities, guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or
similar obligations (other than guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets.
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Investment Grade Rating
means a rating equal to or higher than Baa3 by Moodys or BBB- by S&P (or, if either such
entity ceases to rate the notes for reasons outside of the control of Sunoco LP, the equivalent investment grade credit rating from any other nationally recognized statistical rating organization registered under Section 15E of
the Exchange Act selected by Sunoco LP as a replacement agency).
Investments
means, with respect to any Person, all
direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other obligations), advances or capital contributions (excluding (1) commission, travel and similar advances to
officers and employees made in the ordinary course of business and (2) advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Sunoco LP or any Restricted Subsidiary of
Sunoco LP sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Sunoco LP such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of
Sunoco LP, Sunoco LP will be deemed to have made an Investment on the date of any such sale or
62
disposition equal to the Fair Market Value of Sunoco LPs Investments in such Restricted Subsidiary that were not sold or disposed of in an amount determined as provided in the final
paragraph of the covenant described above under the caption Certain CovenantsRestricted Payments.
Joint
Venture
means any Person that is not a direct or indirect Subsidiary of Sunoco LP in which Sunoco LP or any of its Restricted Subsidiaries makes any Investment.
Lien
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than a precautionary financing statement respecting a lease not intended as a
security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.
Moodys
means
Moodys Investors Service, Inc., or any successor to the rating agency business thereof.
Net Income
means, with
respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:
|
(1)
|
any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or
the extinguishment of any Indebtedness of such Person; and
|
|
(2)
|
any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss).
|
Net Proceeds
means the aggregate cash proceeds received by Sunoco LP or any of its Restricted Subsidiaries in respect
of any Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:
|
(1)
|
the direct costs relating to such Asset Sale, including legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale,
|
|
(2)
|
taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,
|
|
(3)
|
amounts required to be applied to the repayment of Indebtedness, other than revolving credit Indebtedness except to the extent resulting a permanent reduction in availability of such Indebtedness under a Credit
Facility, secured by a Lien on the properties or assets that were the subject of such Asset Sale and all distributions and payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, and
|
|
(4)
|
any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities
associated with such Asset Sale and retained by Sunoco LP or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of
the reserve so reversed or the amount returned to Sunoco LP or its Restricted Subsidiaries from such escrow arrangement, as the case may be.
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Non-Recourse Debt
means Indebtedness:
|
(1)
|
as to which neither Sunoco LP nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise or (c) is the lender;
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63
|
(2)
|
no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness of Sunoco LP or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and
|
|
(3)
|
as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of Sunoco LP or any of its Restricted Subsidiaries except as contemplated by clause (10) of the
definition of Permitted Liens.
|
For purposes of determining compliance with the covenant described under Certain
CovenantsIncurrence of Indebtedness and Issuance of Disqualified Equity above, if any Non-Recourse Debt of any of Sunoco LPs Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event
will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Sunoco LP.
Note
Guarantee
means the guarantee by each Guarantor of the Issuers obligations under the Indenture and the notes, pursuant to the provisions of the Indenture.
Obligations
means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
Operating Surplus
has the meaning assigned to such term in
the Partnership Agreement as in effect on the date of the Indenture.
Partnership Agreement
means the First Amended and
Restated Agreement of Limited Partnership of Sunoco LP (f/k/a/ Susser Petroleum Partners LP), dated as of September 25, 2012, as amended as of the date of Indenture, and as such may be further amended, modified or supplemented from time to
time.
Permitted Business
means either (1) gathering, transporting, treating, processing, marketing, distributing,
storing or otherwise handling Hydrocarbons, or activities or services reasonably related, ancillary or complementary thereto, or a reasonable extension or expansion thereof including entering into Hedging Obligations to support these businesses,
(2) any other business that generates gross income that constitutes qualifying income under Section 7704(d) of the Code, or (3) the retail sale of motor fuel and the operation of convenience stores or activities or
services reasonably related, ancillary or complementary thereto, or a reasonable extension or expansion thereof.
Permitted
Business Investments
means Investments by Sunoco LP or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of Sunoco LP or in any Joint Venture,
provided
that:
|
(1)
|
either (a) at the time of such Investment and immediately thereafter, Sunoco LP could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in the first paragraph of the
covenant described under Certain CovenantsIncurrence of Indebtedness and Issuance of Disqualified Equity above or (b) such Investment does not exceed the aggregate amount of Incremental Funds (as defined in the covenant
described under Certain CovenantsRestricted Payments) not previously expended at the time of making such Investment;
|
|
(2)
|
if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at the time of such Investment,
either (a) all such Indebtedness is Non-Recourse Debt or (b) any such Indebtedness of such Unrestricted Subsidiaries or Joint Venture that is recourse to Sunoco LP or any of its Restricted Subsidiaries (which shall include all
Indebtedness of such Unrestricted Subsidiary or Joint Venture for which Sunoco LP or any of its Restricted Subsidiaries may be directly or indirectly, contingently or otherwise, obligated to pay, whether pursuant to the terms of such
Indebtedness, by law or pursuant to any guarantee, including any claw-back, make-well or keepwell arrangement) could, at the time
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64
|
such Investment is made, be incurred at that time by Sunoco LP and its Restricted Subsidiaries under the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant
described under Certain CovenantsIncurrence of Indebtedness and Issuance of Disqualified Equity; and
|
|
(3)
|
such Unrestricted Subsidiarys or Joint Ventures activities are not outside the scope of the Permitted Business.
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Permitted Investments
means:
|
(1)
|
any Investment in Sunoco LP or in a Restricted Subsidiary of Sunoco LP;
|
|
(2)
|
any Investment in Cash Equivalents;
|
|
(3)
|
any Investment by Sunoco LP or any Restricted Subsidiary of Sunoco LP in a Person, if as a result of such Investment:
|
|
(a)
|
such Person becomes a Restricted Subsidiary of Sunoco LP; or
|
|
(b)
|
such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its properties or assets to, or is liquidated into, Sunoco LP or a Restricted Subsidiary of
Sunoco LP;
|
|
(4)
|
any Investment made as a result of the receipt of non-cash consideration from:
|
|
(a)
|
an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption Repurchase at the Option of HoldersAsset Sales; or
|
|
(b)
|
pursuant to clause (7) of the items deemed not to be Asset Sales under the definition of Asset Sale;
|
|
(5)
|
any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of Sunoco LP;
|
|
(6)
|
any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Sunoco LP or any of its Restricted Subsidiaries,
including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure by Sunoco LP or any of its Restricted Subsidiaries with respect to any
secured Investment in default; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;
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|
(7)
|
Investments represented by Hedging Obligations permitted to be incurred;
|
|
(8)
|
loans or advances to employees made in the ordinary course of business of Sunoco LP or any Restricted Subsidiary of Sunoco LP in an aggregate principal amount not to exceed $2.0 million at any one time
outstanding;
|
|
(9)
|
repurchases of the notes;
|
|
(10)
|
any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers compensation and performance and other similar deposits and prepaid expenses made in the ordinary course
of business;
|
|
(11)
|
Permitted Business Investments;
|
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(12)
|
Investments owned by any Person at the time such Person merges with Sunoco LP or any Restricted Subsidiary of Sunoco LP,
provided
such Investments (a) are not incurred in contemplation of such
merger or acquisition and (b) are, in the good faith determination of Sunoco LP, incidental to such merger or acquisition, and in each case renewals or extensions thereof in amounts not greater than the amount of such Investment;
|
|
(13)
|
Investments existing on the date hereof; and
|
65
|
(14)
|
other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (14) that are at the time outstanding not to exceed the greater of (a) $60.0 million and (b) 5.0% of Sunoco LPs Consolidated Net Tangible Assets.
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Permitted Liens
means:
|
(1)
|
Liens securing any Indebtedness under any Credit Facilities and all Obligations and Hedging Obligations relating to such Indebtedness;
|
|
(2)
|
Liens in favor of Sunoco LP or the Guarantors;
|
|
(3)
|
Liens on property of a Person existing at the time such Person is merged with or into or consolidated with Sunoco LP or any Subsidiary of Sunoco LP;
provided
that such Liens were in existence prior to
such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with Sunoco LP or the Subsidiary;
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|
(4)
|
Liens on property existing at the time of acquisition of the property by Sunoco LP or any Restricted Subsidiary of Sunoco LP;
provided
that such Liens were in existence prior to, such acquisition, and
not incurred in contemplation of, such acquisition;
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|
(5)
|
Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;
|
|
(6)
|
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled Certain CovenantsIncurrence of Indebtedness and Issuance
of Disqualified Equity covering only the assets acquired with or financed by such Indebtedness;
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|
(7)
|
Liens existing on the date of the Indenture (other than Liens securing the Credit Facilities);
|
|
(8)
|
Liens created for the benefit of (or to secure) the notes (or the Note Guarantees);
|
|
(9)
|
Liens on any property or asset acquired, constructed or improved by Sunoco LP or any of its Restricted Subsidiaries (a Purchase Money Lien), which (a) are in favor of the seller of such property or
assets, in favor of the Person developing, constructing, repairing or improving such asset or property, or in favor of the Person that provided the funding for the acquisition, development, construction, repair or improvement cost, as the case may
be, of such asset or property, (b) are created within 360 days after the acquisition, development, construction, repair or improvement, (c) secure the purchase price or development, construction, repair or improvement cost, as the
case may be, of such asset or property in an amount up to 100% of the Fair Market Value of such acquisition, construction or improvement of such asset or property, and (d) are limited to the asset or property so acquired, constructed or
improved (including the proceeds thereof, accessions thereto and upgrades thereof);
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|
(10)
|
Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by Sunoco LP or any Restricted Subsidiary of Sunoco LP to the extent securing Non-Recourse Debt or other
Indebtedness of such Unrestricted Subsidiary or Joint Venture;
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|
(11)
|
Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of Sunoco LP or any of its Restricted Subsidiaries on deposit with or in
possession of such bank;
|
|
(12)
|
Liens to secure performance of Hedging Obligations of Sunoco LP or any of its Restricted Subsidiaries incurred in the ordinary course of business and not for speculative purposes;
|
|
(13)
|
Liens arising under construction contracts, interconnection agreements, operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farmout agreements, division orders,
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66
|
contracts for purchase, gathering, processing, sale, transportation or exchange of crude oil, natural gas liquids, condensate and natural gas, natural gas storage agreements, unitization and
pooling declarations and agreements, area of mutual interest agreements, real property leases and other agreements arising in the ordinary course of business of Sunoco LP and its Restricted Subsidiaries that are customary in the Permitted
Business;
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(14)
|
Liens upon specific items of inventory, receivables or other goods or proceeds of Sunoco LP or any of its Restricted Subsidiaries securing such Persons obligations in respect of bankers acceptances or
receivables securitizations issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory, receivables or other goods or proceeds and permitted by the covenant described under Certain
CovenantsIncurrence of Indebtedness and Issuance of Disqualified Equity;
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|
(15)
|
Liens securing any Indebtedness equally and ratably with all Obligations due under the notes or any Note Guarantee pursuant to a contractual covenant that limits Liens in a manner substantially similar to the covenant
described above under Certain CovenantsLiens;
|
|
(16)
|
Liens incurred in the ordinary course of business of Sunoco LP or any Restricted Subsidiary of Sunoco LP;
provided
,
however
, that, after giving effect to any such incurrence, the aggregate
principal amount of all Indebtedness then outstanding and secured by any Liens pursuant to this clause (16) does not exceed the greater of (a) $60.0 million or (b) 5.0% of Sunoco LPs Consolidated Net Tangible Assets at
such time; and
|
|
(17)
|
any Lien renewing, extending, refinancing or refunding a Lien permitted by clauses (3), (4), (6), (7) or (9) above;
provided
that (a) the principal amount of Indebtedness secured by such Lien
does not exceed the principal amount of such Indebtedness outstanding immediately prior to the renewal, extension, refinance or refund of such Lien, plus all accrued interest on the Indebtedness secured thereby and the amount of all fees, expenses
and premiums incurred in connection therewith, and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby.
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After termination of the covenants referred to in the first paragraph of Certain CovenantsTermination of
Covenants, for purposes of complying with the Liens covenant, the Liens described in clauses (1) and (16) of this definition of Permitted Liens will be Permitted Liens only to the extent those Liens secure
Indebtedness not exceeding, at the time of determination, 15% of the Consolidated Net Tangible Assets of Sunoco LP. Once effective, this 15% limitation on Permitted Liens will continue to apply during any later period in which the notes do not
have an Investment Grade Rating by both Rating Agencies.
Permitted Refinancing Indebtedness
means any Indebtedness of
Sunoco LP or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge, other Indebtedness of Sunoco LP or any of its Restricted Subsidiaries
(other than intercompany Indebtedness);
provided
that:
|
(1)
|
the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);
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|
(2)
|
such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;
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|
(3)
|
if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in
right of payment to the notes or the Note Guarantees, such Permitted Refinancing
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67
|
Indebtedness is subordinated in right of payment to, the notes or the Note Guarantees, on terms at least as favorable to the holders of notes as those contained in the documentation governing the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and
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|
(4)
|
such Indebtedness is not incurred (other than by way of a guarantee) by a Restricted Subsidiary (other than Finance Corp. or a Guarantor) if Sunoco LP is the issuer or other primary obligor on the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged.
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Person
means any individual,
corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
Qualified Owner
means any of (i) LE GP, LLC, Energy Transfer Equity, L.P. and Energy Transfer Partners, L.P.,
(ii) any Person who Beneficially Owns more than 50% of the Voting Stock of any entity specified in clause (i) above or who Beneficially Owns sufficient Equity Interests in such entity to elect a majority of its directors, managers,
trustees or other persons serving in a similar capacity for such entity and (iii) any Subsidiary or Affiliate of any entity specified in either clause (i) or clause (ii) above.
Rating Agencies
means Moodys and S&P.
Ratings Categories
means:
|
(1)
|
with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); and
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|
(2)
|
with respect to Moodys, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories).
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Ratings Decline
means a decrease in the rating of the notes by both Moodys and S&P by one or more gradations
(including gradations within Rating Categories as well as between Rating Categories). In determining whether the rating of the notes has decreased by one or more gradations, gradations within Ratings Categories, namely + or - for S&P, and 1, 2
and 3 for Moodys, will be taken into account; for example, in the case of S&P, a ratings decline either from BB+ to BB or BB to BB- will constitute a decrease of one gradation.
Reporting Default
means a Default described in clause (4) under Events of Default and Remedies.
Restricted Investment
means an Investment other than a Permitted Investment.
Restricted Subsidiary
of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
Unless specified otherwise, references to a Restricted Subsidiary refer to a Restricted Subsidiary of Sunoco LP. Notwithstanding anything in the Indenture to the contrary, Finance Corp. shall be a Restricted Subsidiary of Sunoco LP.
S&P
means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., or any
successor to the rating agency business thereof.
SEC
means the Securities and Exchange Commission.
Senior Indebtedness
means with respect to any Person, Indebtedness of such Person (other than Indebtedness owed to an
Affiliate), unless the instrument creating or evidencing such Indebtedness provides that such Indebtedness is subordinate in right of payment to the notes or the Note Guarantee of such Person, as the case may be.
Significant Subsidiary
means any Subsidiary that would be a significant subsidiary as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture.
68
Stated Maturity
means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Subsidiary
means, with respect to any specified Person:
|
(1)
|
any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of the Voting Stock is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
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|
(2)
|
any partnership (whether general or limited) or limited liability company (a) the sole general partner or member of which is such Person or a Subsidiary of such Person, or (b) if there is more than a single
general partner or member, either (x) the only managing general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or
indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company, respectively.
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Treasury Rate
means, with respect to any redemption date, the yield to maturity at the time of computation of United States
Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such
Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to August 1, 2017;
provided
,
however
, that if such period is not equal to
the constant maturity of a United States Treasury security for which a weekly average yield is given, Sunoco LP shall obtain the Treasury Rate by linear interpolation (calculated to the nearest one twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to August 1, 2017 is less than one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used. Sunoco LP will (a) calculate the Treasury Rate on the second business day preceding the applicable redemption date and (b) prior to such redemption date file with
the trustee an officers certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.
Unrestricted Subsidiary
means any Subsidiary of Sunoco LP (other than Finance Corp. or any successor to it) that is
designated by the Board of Directors of the General Partner as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:
|
(1)
|
except to the extent permitted by subclause (2)(b) of the definition of Permitted Business Investments, has no Indebtedness other than Non-Recourse Debt;
|
|
(2)
|
except as permitted by the covenant described above under the caption Certain CovenantsTransactions with Affiliates, is not party to any agreement, contract, arrangement or understanding with
Sunoco LP or any Restricted Subsidiary of Sunoco LP unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Sunoco LP or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of Sunoco LP;
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(3)
|
is a Person with respect to which neither Sunoco LP nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or
preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results; and
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(4)
|
has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Sunoco LP or any of its Restricted Subsidiaries.
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All Subsidiaries of an Unrestricted Subsidiary shall be also Unrestricted Subsidiaries.
Voting Stock
of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled
(without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person.
Weighted
Average Life to Maturity
means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
|
(1)
|
the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
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(2)
|
the then outstanding principal amount of such Indebtedness.
|
70