EXECUTION COPY
FIRST AMENDMENT
FIRST AMENDMENT, dated as of October 16, 2001 (this "Amendment"), to
the Credit Agreement, dated as of September 6, 2001 (the "Credit Agreement";
unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement are used herein as defined therein), among TESORO PETROLEUM
CORPORATION, a Delaware corporation (the "Borrower"), the several banks and
financial institutions or entities party thereto (each a "Lender" and,
collectively, the "Lenders"), LEHMAN BROTHERS INC., as advisor, lead arranger
and book manager (in such capacity, the "Arranger"), LEHMAN COMMERCIAL PAPER
INC., as syndication agent (in such capacity, the "Syndication Agent"), ABN AMRO
BANK N.V., BANK OF AMERICA, N.A., CREDIT LYONNAIS NEW YORK BRANCH and THE BANK
OF NOVA SCOTIA, as co-documentation agents (in such capacity, the
"Co-Documentation Agents") and BANK ONE, NA, as administrative agent (in such
capacity, the "Administrative Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to consent to
amendments to certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to consent to the requested
amendments, on and subject to the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I.
AMENDMENTS TO THE CREDIT AGREEMENT
Section 1.1. Amendments to Section 1.1 of the Credit Agreement. (a) The
definition of "Supermajority Lenders" in Section 1.1 of the Credit Agreement is
hereby amended by inserting, immediately following the words "Term Loans" in
clause (b) of such definition, the following: "(other than Capital Markets Term
Loans)".
(b) The definition of "Eurodollar Rate" is hereby amended in its
entirety to read as follows:
"Eurodollar Rate": with respect to a Eurodollar Loan for the
relevant Interest Period, the quotient of (a) the Eurodollar Base Rate
applicable to such Interest Period, divided by (b) one minus the
Eurocurrency Reserve Requirement (expressed as a decimal) applicable to
such Interest Period; provided that, with respect to Tranche B Term
Loans only, the "Eurodollar Rate" for such Loans shall in no event be
less than 3% for any Interest Period".
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(c) Section 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions in appropriate alphabetical order:
"Converted Amount": as defined in Section 2.1(e).
"First Amendment": the First Amendment, dated as of October
16, 2001, to this Agreement.
"First Amendment Effective Date": the date on which each of
the conditions set forth in Section 2.1 of the First Amendment were
satisfied.
"Related Fund": with respect to any Lender which is a fund
that invests in loans, any other fund that invests in loans that is
managed by the same investment advisor as such Lender or by an
Affiliate of such Lender or such investment advisor.
Section 1.2. Amendment to Section 2.1 of the Credit Agreement. Section
2.1 of the Credit Agreement is hereby amended by adding a new paragraph (e)
thereto, as follows:
(e) On the First Amendment Effective Date, $150,000,000 of the
Capital Markets Term Loans made on the Closing Date (the "Converted
Amount") shall be converted to Tranche B Term Loans, and the Converted
Amount shall, from and after the First Amendment Effective Date, be
subject to all the terms of Tranche B Term Loans under this Agreement.
The Converted Amount shall be allocated among the Capital Markets Term
Loan Lenders pro rata based on their respective Capital Markets Term
Loan Percentages as of the First Amendment Effective Date.
Section 1.3. Amendments to Section 2.3 of the Credit Agreement. (a)
Section 2.3(c) is hereby amended by replacing the text of the lead-in paragraph
thereof in its entirety with the following:
The Tranche B Term Loan of each Tranche B Term Loan Lender shall mature
in 24 consecutive quarterly installments, commencing on March 31, 2002,
each of which shall be in an amount equal to such Lender's Tranche B
Term Loan Percentage multiplied by the percentage set forth below
opposite such installment of the sum of (i) the aggregate principal
amount of the Tranche B Term Loans made on the Closing Date plus (ii)
the Converted Amount:
(b) Section 2.3(d) is hereby amended by replacing the first sentence of
such paragraph in its entirety with the following:
The Capital Markets Term Loan of each Lender shall mature on November
6, 2001; provided that the Arranger may elect, in its sole discretion,
to extend the maturity date of the Capital Markets Term Loans on one or
more occasions to a date on or before February 6, 2002 (November 6,
2001 or such later maturity date, as the case may be, the "Capital
Markets Term Loan Maturity Date"); provided, further, that, if the
Capital Markets Term Loans shall not have been repaid in full on or
before the Capital Markets Term Loan Maturity Date with (x) the Net
Cash Proceeds of the issuance of Take-Out
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Debt in accordance with Section 2.10(b) and (y) to the extent such
proceeds are sufficient to repay at least 85%, but not all, of the
outstanding principal amount of the Capital Markets Term Loans, by
payments with funds that are not required to be applied to mandatory
prepayments pursuant to Section 2.10, then on the Capital Markets Term
Loan Maturity Date the Borrower shall cause the Exchange Notes to be
issued in accordance with Section 2.3(e).
Section 1.4. Amendments to Section 2.11 of the Credit Agreement. (a)
Section 2.11(a) is hereby amended by deleting, in clause (i) of the proviso to
the second sentence thereof, the words "and the Administrative Agent has, or the
Majority Facility Lenders in respect of such Facility have, determined in its or
their sole discretion not to permit such conversions".
(b) Section 2.11(b) is hereby amended by deleting, in clause (i) of the
first proviso to the first sentence thereof, the words "and the Administrative
Agent has, or the Majority Facility Lenders in respect of such Facility have,
determined in its or their sole discretion not to permit such continuations".
Section 1.5. Amendment to Section 2.13 of the Credit Agreement. Section
2.13 of the Credit Agreement is hereby amended by adding a new paragraph (e)
thereto, as follows:
(e) For the avoidance of doubt, the Converted Amount shall
accrue interest in accordance with this Section 2.13 as Capital Markets
Term Loans prior to the First Amendment Effective Date and as Tranche B
Term Loans thereafter.
Section 1.6. Addition of Section 2.22 of the Credit Agreement. Section
2 of the Credit Agreement is hereby amended by adding a new Section 2.22
thereto, as follows:
2.22 Revolving Credit Commitment Increases. (a) In the event
that the Borrower wishes to increase the aggregate Revolving Credit
Commitments at any time after the Syndication Date that no Default or
Event of Default has occurred and is continuing, it shall notify the
Administrative Agent and the Syndication Agent in writing of the amount
(the "Offered Increase Amount") of such proposed increase (such notice,
a "Revolving Credit Commitment Increase Notice"). The Borrower may, at
its election, (i) offer one or more of the Lenders the opportunity to
participate in all or a portion of the Offered Increase Amount pursuant
to paragraph (b) below and/or (ii) with the consent of each Issuing
Lender (which consents shall not be unreasonably withheld), offer one
or more additional banks, financial institutions or other entities the
opportunity to participate in all or a portion of the Offered Increase
Amount pursuant to paragraph (b) below. Each Revolving Credit
Commitment Increase Notice shall specify which Lenders and/or banks,
financial institutions or other entities the Borrower desires to
participate in such commitment increase. The Borrower or, if requested
by the Borrower, the Syndication Agent will notify such Lenders and/or
banks, financial institutions or other entities of such offer.
(b) Any additional bank, financial institution or other entity
which the Borrower selects to offer participation in the increased
Revolving Credit Commitments and which elects to become a party to this
Agreement and obtain a Revolving Credit
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Commitment in an amount so offered and accepted by it pursuant to
Section 2.22(a)(ii) shall execute a New Revolving Credit Lender
Supplement with the Borrower, the Administrative Agent and the
Syndication Agent, substantially in the form of Exhibit O, whereupon
such bank, financial institution or other entity (herein called a "New
Revolving Credit Lender") shall become a Lender for all purposes and to
the same extent as if originally a party hereto and shall be bound by
and entitled to the benefits of this Agreement, provided that the
Revolving Credit Commitment of any such new Lender shall be in an
amount not less than $5,000,000. Any Lender which accepts an offer to
it by the Borrower to increase its Revolving Credit Commitment pursuant
to Section 2.22(a)(i) shall, in each case, execute a Revolving Credit
Commitment Increase Supplement with the Borrower, the Administrative
Agent and the Syndication Agent, substantially in the form of Exhibit
P, whereupon such Lender shall be bound by and entitled to the benefits
of this Agreement with respect to the full amount of its Revolving
Credit Commitment as so increased. The effectiveness of any new
Revolving Credit Commitment agreed to pursuant to a New Revolving
Credit Lender Supplement or a Revolving Credit Commitment Increase
Supplement executed pursuant to this paragraph (b) shall be subject to
the condition that the Administrative Agent shall have received such
legal opinions and other documents from the Borrower and its counsel
with respect to the Revolving Credit Commitment increase as the
Administrative Agent shall have reasonably requested.
(c) If any bank, financial institution or other entity becomes
a New Revolving Credit Lender or any Lender's Revolving Credit
Commitment is increased pursuant to Section 2.22(b), additional
Revolving Credit Loans made on or after the effectiveness thereof (the
"Re-Allocation Date") shall be made pro rata based on the Revolving
Credit Percentages in effect on and after such Re-Allocation Date. In
the event that on any such Re-Allocation Date there are Revolving
Credit Loans outstanding, the Borrower shall make prepayments thereof
and borrowings of Revolving Credit Loans so that, after giving effect
thereto, such outstanding Revolving Credit Loans are held pro rata
based on such new Revolving Credit Percentages.
(d) Notwithstanding anything to the contrary in this Section
2.22, (i) in no event shall any transaction effected pursuant to this
Section 2.22 increase the aggregate amount of the Revolving Credit
Commitments to more than $225,000,000 and (ii) no Lender shall have any
obligation to increase its Revolving Credit Commitment unless it agrees
to do so in its sole discretion.
Section 1.7. Amendment to Section 3.3 of the Credit Agreement. Section
3.3(a) of the Credit Agreement is hereby amended by adding, immediately after
the words "Revolving Credit Percentages" in the first sentence thereof, the
following: "in effect on each day in respect of which such fee accrues".
Section 1.8. Amendment to Section 6.1 of the Credit Agreement. Section
6.1(a) of the Credit Agreement is hereby amended by adding, immediately after
the words "like qualification or exception" but before the subsequent comma, the
following: "or any other material qualification or exception".
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Section 1.9. Addition of Section 7.17 of the Credit Agreement. Section
7 of the Credit Agreement is hereby amended by adding a new Section 7.17
thereto, as follows:
7.17 Limitation on Assets of Excluded Subsidiaries. Permit the
aggregate book value of the assets of all Excluded Subsidiaries to
exceed $2,500,000 in the aggregate.
Section 1.10. Amendments to Section 10.1 of the Credit Agreement. (a)
Clause (i) of Section 10.1 is hereby amended by adding the following
parenthetical at the end of such clause: "(provided that (x) extensions of the
Capital Markets Term Loan Maturity Date pursuant to Section 2.3(d) may be
effected in accordance with such Section and (y) any further extension of the
Capital Markets Term Loan Maturity Date shall require the consent of the
Supermajority Lenders in addition to any other consent required by this clause
(i))".
(b) Section 10.1 is hereby amended by deleting the word "or" at the end
of clause (viii) thereof, replacing the period at the end of clause (ix) thereof
with "; or", and adding a new clause (x) thereto, as follows:
(x) amend Section 2.10(a) or 2.10(c) of without the consent of
the Required Prepayment Lenders.
Section 1.11. Amendments to Section 10.6 of the Credit Agreement.
Paragraph (c) of Section 10.6 is hereby amended by (a) adding, immediately after
the words "Control Investment Affiliate" in the first sentence of such
paragraph, the words "or Related Fund", and (b) adding, in the first sentence
thereof, at the end of the parenthetical which begins with the words "in each
case other than", the words "and which amount shall be in the aggregate in the
case of simultaneous assignments to Control Investment Affiliates or Related
Funds".
Section 1.12. Amendment to Credit Agreement Exhibits. The Credit
Agreement is hereby amended by adding a new Exhibit O thereto in the form of
Exhibit O hereto and a new Exhibit P thereto in the form of Exhibit P hereto.
ARTICLE II.
Miscellaneous
Section 2.1. Conditions to the effectiveness of the Amendment . This
Amendment shall become effective as of the date each of the conditions precedent
set forth below shall have been fulfilled (the "First Amendment Effective
Date"):
(a) Amendment. The Administrative Agent shall have received this
Amendment, executed and delivered by a duly authorized officer of the Borrower,
each other Loan Party, each Agent and each Lender.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to this Amendment.
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(c) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents and
herein shall be true and correct in all material respects on and as of the First
Amendment Effective Date as if made on and as of the First Amendment Effective
Date after giving effect to the amendments effected hereby.
(d) Fees. The Lenders, the Arranger, the Administrative Agent and the
Syndication Agent shall have received all fees required to be paid on or before
the First Amendment Effective Date.
Section 2.2. Representation and Warranties. The Borrower represents and
warrants to each Lender and the Administrative Agent as follows:
(a) Corporate Power; Authorization; Enforceable Obligations; No Legal
Bar.
(i) The Borrower has the power and authority to execute and deliver
this Amendment and to perform each of the Loan Documents as amended by this
Amendment and each agreement or instrument contemplated hereby or thereby
to which it is or will be a party.
(ii) This Amendment has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document as amended by this
Amendment constitutes, a legal, valid and binding obligation of such party
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally
and except as enforceability may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(b) Representations and Warranties in Loan Documents. The
representations and warranties set forth in each Loan Document are true and
correct in all material respects as if made on and as of the First Amendment
Effective Date, except as they may specifically relate to an earlier date.
Section 2.3. Continuing Effect of Credit Agreement. This Amendment
shall not constitute an amendment of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as an amendment, waiver
or consent to any action on the part of any party hereto that would require an
amendment, waiver or consent of the Agents, the Arranger or the Lenders except
as expressly stated herein. Except as expressly waived hereby, the provisions of
the Credit Agreement are and shall remain in full force and effect.
Section 2.4. Acknowledgment and Consent. Each of the Loan Parties
hereby:
(a) acknowledges and consents to the execution and delivery of this
Amendment and performance of the Credit Agreement;
(b) agrees that the term "Obligations" as defined in the Security
Documents includes all of the Borrower's obligations under the Credit Agreement
and that all references in
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such documents to the "Credit Agreement" refer to the Credit Agreement as
defined in this Amendment and Consent;
(c) agrees that all of the "Collateral" (as defined in the Security
Documents) secures, and continues to secure, all of the Obligations of the Loan
Parties referred to in paragraph (b) above; and
(d) agrees that the execution and delivery of this Amendment and
performance of the Credit Agreement shall not in any way affect such Person's
obligations under any Loan Documents, as amended by this Amendment, to which
such Person is a party, which obligations on the date hereof remain absolute and
unconditional and are not subject to any defense, set-off or counterclaim.
Section 2.5. Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent, the Syndication Agent, the Co-Documentation Agents and the
Arranger for all of their reasonable out-of-pocket costs and expenses incurred
in connection with (a) the negotiation, preparation, execution and delivery of
this Amendment and any other documents prepared in connection herewith, and
consummation of the transactions contemplated hereby and thereby, including the
fees and expenses of Simpson Thacher & Bartlett, counsel to the Arranger, the
Syndication Agent and the Administrative Agent and (b) the enforcement or
preservation of any rights under this Amendment and any other such documents.
Section 2.6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 2.7. Counterparts. This Amendment may be executed in any number
of counterparts by the parties hereto, each of which counterparts when so
executed shall be an original, but all counterparts taken together shall
constitute one and the same instrument.
[Rest of page left intentionally blank]
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the date first above written.
TESORO PETROLEUM CORPORATION
By: /s/ SHARON L. LAYMAN
-----------------------------------------
Name: Sharon L. Layman
Title: Vice President and Treasurer
LEHMAN BROTHERS INC., as Arranger
By: /s/ MICHELE SWANSON
-----------------------------------------
Name: Michele Swanson
Title: Vice President
BANK ONE, NA, as Administrative Agent and
as a Lender
By: /s/ FRANK L. GROSSMAN
-----------------------------------------
Name: Frank L. Grossman
Title: Director - Capital Markets
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By: /s/ MICHELE SWANSON
-----------------------------------------
Name: Michele Swanson
Title: Vice President
ABN AMRO BANK N.V., as Documentation
Agent and as a Lender
By: /s/ JAMIE CONN
-----------------------------------------
Name: Jamie Conn
Title: Group Vice President
By: /s/ JOHN REED
-----------------------------------------
Name: John Reed
Title: Assistant Vice President
BANK OF AMERICA, N.A., as Documentation
Agent and as a Lender
By: /s/ CLAIRE LIU
-----------------------------------------
Name: Claire Liu
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH,
as Documentation Agent and as a Lender
By: /s/ BERNARD WEYMULLER
-----------------------------------------
Name: Bernard Weymuller
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
as Documentation Agent and as a Lender
By: /s/ N. BELL
-----------------------------------------
Name: N. Bell
Title: Assistant Agent
Acknowledged and Consented:
FAR EAST MARITIME COMPANY
GOLD STAR MARITIME COMPANY
TESORO FINANCIAL SERVICES HOLDING
COMPANY
VICTORY FINANCE COMPANY
By: /s/ SHARON L. LAYMAN
------------------------------------
Name: Sharon L. Layman
Title: Attorney-in-Fact
DIGICOMP INC.
KENAI PIPE LINE COMPANY
SMILEY'S SUPER SERVICE, INC.
TESORO ALASKA COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO AVIATION COMPANY
TESORO GAS RESOURCES COMPANY, INC.
TESORO HAWAII CORPORATION
TESORO HIGH PLAINS PIPELINE COMPANY
TESORO MARINE SERVICES HOLDING COMPANY
TESORO MARINE SERVICES, INC.
TESORO MARITIME COMPANY
TESORO NORTHSTORE COMPANY
TESORO PETROLEUM COMPANIES, INC.
TESORO REFINING, MARKETING & SUPPLY COMPANY
TESORO SOUTH PACIFIC PETROLEUM CORPORATION
TESORO TECHNOLOGY COMPANY
TESORO WEST COAST COMPANY
By: /s/ SHARON L. LAYMAN
------------------------------------
Name: Sharon L. Layman
Title: Vice President and Treasurer
TESORO VOSTOK COMPANY
By: /s/ SHARON L. LAYMAN
-------------------------------------
Name: Sharon L. Layman
Title: Vice President and Treasurer