Exhibit 4.1
VALERO ENERGY CORPORATION
3.50% Notes due 2009
4.75% Notes due 2014
Two series of Securities are hereby established pursuant to Section 301
of the Indenture dated as of December 12, 1997 (the "Indenture"), between Valero
Energy Corporation, a Delaware corporation (the "Company"), and The Bank of New
York, as Trustee (in such capacity, the "Trustee"), as follows (capitalized
terms used and not defined herein shall have the meanings assigned to them in
the Indenture, and all references herein to a Section shall refer to the
corresponding Section in the Indenture):
1. The title of the 3.50% Notes due 2009 shall be "3.50% Notes due 2009"
(the "2009 Notes") and the title of the 4.75% Notes due 2014 shall be "4.75%
Notes due 2014" (the "2014 Notes" and, together with the 2009 Notes, the
"Notes").
2. The initial limit upon the aggregate principal amount of the 2009 Notes
that may be authenticated and delivered under the Indenture (except for 2009
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other 2009 Notes pursuant to Sections 304, 305,
306, 906 or 1207) is $200,000,000.
3. The initial limit upon the aggregate principal amount of the 2014 Notes
that may be authenticated and delivered under the Indenture (except for 2014
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other 2014 Notes pursuant to Sections 304, 305,
306, 906 or 1207) is $200,000,000.
4. Each series of Notes shall be initially issued as Registered Securities
in the form of one or more global securities under the Indenture. The Depository
Trust Company is hereby designated as the Depository for these global Securities
under the Indenture.
As long as any Note is in global form, then, notwithstanding clause
(11) of Section 301 and the provisions of Section 302, any such global Note
shall represent such of the outstanding Notes as shall be specified therein and
may provide that it shall represent the aggregate amount of outstanding Notes
from time to time endorsed thereon and that the aggregate amount of outstanding
Notes represented thereby may from time to time be reduced to reflect exchanges
or redemptions. Any endorsement of a global Note to reflect the amount, or any
increase or decrease in the amount, of outstanding Notes represented thereby
shall be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified in such Note or in a Company Order to be
delivered to the Trustee pursuant to Section 303. Subject to the provisions of
Section 303 and, if applicable Section 304, the Trustee shall deliver and
redeliver any Note in permanent global form in the manner and upon instructions
given by the Person or Persons specified in such Note or in the applicable
Company Order. With respect to the Notes of any series that are represented by a
global Note, the Company authorizes the execution and delivery by the Trustee of
a letter of representations or other similar agreement or instrument in the form
customarily provided for by the Depository appointed with respect to such global
Note. Any global Note may be deposited with the Depository or its nominee, or
may remain in the custody of the Trustee pursuant to a FAST Balance Certificate
Agreement or similar agreement between the Trustee and the Depository. If a
Company Order has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Note in
global form shall be in writing but need not comply with Section 102 and need
not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under the Indenture with respect to any global Note held on their
behalf by the Depository, or the Trustee as its custodian, or under such global
Note and the Depository may be treated by the Company, the Trustee and any agent
of the Company or the Trustee as the absolute owner of such global Note for all
purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of
a global Note may grant proxies and otherwise authorize any Person, including
Agent Members and Persons that may hold interests through an Agent Member, to
take any action that a Holder is entitled to take under the Indenture or the
Notes and (ii) nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by the Depository or shall
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Note.
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Notwithstanding Section 305, and except as otherwise provided pursuant
to Section 301, transfers of a global Note shall be limited to transfers of such
global Note in whole but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in a global Note may be
transferred in accordance with the rules and procedures of the Depository. In
all other respects, Notes shall be transferred to all beneficial owners in
exchange for their beneficial interest in a Global Security solely as expressly
provided in Section 305.
In connection with any transfer of a portion of the beneficial interest
in a global Note to beneficial owners pursuant hereto and Section 305, the
Security Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the global Note of the applicable series in
an amount equal to the principal amount of the beneficial interest in the global
Note to be transferred, and the Company shall execute, and the Trustee upon
receipt of a Company Order for the authentication and delivery of Notes shall
authenticate and deliver, one or more Notes of like tenor and amount.
In connection with the transfer of an entire global Note to beneficial
owners pursuant hereto and Section 305, the global Security shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
global Note, an equal aggregate principal amount of Notes of the applicable
series of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Notes by the Depository, or for maintaining, supervising or reviewing any
records of the Depository relating to such Notes. Neither the Company nor the
Trustee shall be liable for any delay by the related global Note Holder or the
Depository in identifying the beneficial owners, and each such Person may
conclusively rely on, and shall be protected in relying on, instructions from
such global Note Holder or the Depository for all purposes (including with
respect to the registration and delivery, and the respective principal amounts,
of the Notes to be issued).
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of,
premium (if any) or interest on any global Note shall be made to the Person or
Persons specified in such global Note.
5. The dates on which the principal of the 2009 Notes and the 2014 Notes
are payable shall be April 1, 2009 and April 1, 2014, respectively.
6. The rate at which the 2009 Notes shall bear interest shall be 3.50% per
annum and the rate at which the 2014 Notes shall bear interest shall be 4.75%
per annum. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The date from which interest shall accrue for the Notes shall be
March 25, 2004. The Interest Payment Dates on which interest on the Notes shall
be payable are April 1 and October 1, commencing October 1, 2004. Interest on
the Notes shall be payable to the persons in whose name the Notes are registered
at the close of business on the Regular Record Date for such interest payment,
except in the case of default interest, which will be payable as provided in the
Indenture. The Regular Record Date for the interest payable on the Notes on any
Interest Payment Date shall be the March 15 and September 15, as the case may
be, immediately preceding such Interest Payment Date. No Additional Amounts
shall be payable with respect to the Notes.
7. The place or places where the principal of, premium (if any) on and
interest on the Notes shall be payable is at the office or agency of the Trustee
in New York, New York or such other offices or agencies maintained for such
purpose as the Company may from time to time and in accordance with the
Indenture designate. If appropriate wire transfer instructions have been
received by the Trustee at its Corporate Trust Office or at its corporate trust
facility in the Borough of Manhattan, The City of New York, not later than 5
Business Days prior to the record date for an applicable Interest Payment Date,
then payments in respect of the Notes evidenced by a global Security (including
principal, premium, if any, and interest) shall be made by wire transfer of
immediately available funds to the accounts specified by the Holder of such
global Note. In all other cases, payment of interest on the Notes may be made at
the option of the Company by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register.
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8. Each series of Notes will be redeemable, in whole or in part, at the
option of the Company at any time, at a redemption price equal to the greater of
(i) 100% of the principal amount of the applicable series of Notes, and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (not including any portion of such payments of interest accrued
as of the date of redemption) discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined below) plus 20 basis points with
respect to the 2009 Notes and 20 basis points with respect to the 2014 Notes, as
calculated by an Independent Investment Banker plus, in each case, accrued and
unpaid interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)"or any successor publication
which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months
before or after the remaining life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or (ii) if such release (or any
successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such date of redemption. The Adjusted
Treasury Rate shall be calculated on the third Business Day preceding
the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the series of Notes to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of five Reference Treasury Dealer
Quotations for such date of redemption, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (ii) if the
Independent Investment Banker obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company to act as the independent investment
banker from time to time.
"Reference Treasury Dealers" means (i) Lehman Brothers Inc. and
Barclays Capital Inc. and their respective successors; provided that,
if either of the foregoing shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such date
of redemption.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the date of redemption to each Holder of the applicable series of
Notes to be redeemed. Unless the Company defaults in payment of the
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redemption price, on and after the date of redemption, interest will cease to
accrue on the Notes or portions thereof called for redemption.
9. The Notes shall not be entitled to the benefit of any sinking fund, any
optional repurchase or redemption right in favor of any holder thereof or other
mandatory repurchase or redemption provisions.
10. The Notes shall be in substantially the form of Attachment A hereto
(the "Form of Note").
11. Each Note that is a global Security shall bear the legend set forth on
the face of the Form of Note.
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ATTACHMENT A - FORM OF NOTE
[FORM OF FACE OF SECURITY]
[THIS SECURITY IS A GLOBAL SECURITY AS PROVIDED FOR IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO
A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]*
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
VALERO ENERGY CORPORATION
[ ]% NOTES DUE [ ]
No. [ ] $[ ]
REGISTERED CUSIP No. [ ]
VALERO ENERGY CORPORATION, a Delaware corporation (the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received promises to pay to Cede & Co. or
registered assigns, the principal sum of Dollars [or such lesser amount as
indicated on the schedule of exchanges of Securities,]* on [ ].
Interest Payment Dates: April 1 and October 1
Regular Record Dates: March 15 and September 15
Reference is hereby made to the further provisions of this
Security set forth in the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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* To be included only if the Security is a Global Security.
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: ,
VALERO ENERGY CORPORATION
By:_______________________________________
Michael S. Ciskowski, Executive Vice
President and Chief Financial Officer
ATTEST:
By:_________________________________
Jay D. Browning, Vice President
and Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
Dated: , By:_______________________________________
Authorized Signatory
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[FORM OF REVERSE OF SECURITY]
VALERO ENERGY CORPORATION
[ ]% NOTES DUE [ ]
This Security is one of a duly authorized issue of debentures,
notes or other evidences of indebtedness of VALERO ENERGY CORPORATION, a
Delaware corporation (the "Company"), issued under the Indenture hereinafter
referred to and is one of a series of such debentures, notes or other evidences
of indebtedness designated pursuant thereto as [ ]% Notes due [ ] (the
"Securities") of the Company.
1. Interest. The Company promises to pay interest on the
principal amount of this Security at [ ]% per annum from March 25, 2004 until
Maturity of the Securities. The Company will pay interest semiannually on April
1 and October 1 of each year (each an "Interest Payment Date") and on the
Maturity of the Securities, or if any such day is not a Business Day, on the
next succeeding Business Day. Interest on the Securities will accrue from the
most recent Interest Payment Date on which interest has been paid or, if no
interest has been paid, from March 25, 2004; provided that if there is no
existing Default in the payment of, or provisions for, interest, and if this
Security is authenticated between a Regular Record Date referred to on the face
hereof (whether or not a Business Day) and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be October 1,
2004. The interest so payable, and punctually paid or provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
as set forth on the face hereof, provided, however, that interest payable at
Maturity of this Security will be payable to the Person to whom the principal
hereof shall be payable. Any such interest which is so payable, but is not
punctually paid or duly provided for on any Interest Payment Date, shall
forthwith cease to be payable to the registered Holder on such Regular Record
Date, and may be paid as more fully provided in the Indenture. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. Payment of the principal of (and premium,
if any) and interest on this Security will be made at the office or agency of
the Company maintained for that purpose at the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of New York, or at such other
offices or agencies maintained for such purpose as the Company may from time to
time and in accordance with the Indenture designate, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that (i) payment of
interest may, at the option of the Company, be made (subject to collection) by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register or, with respect to Securities evidenced by a
global Security, if appropriate wire transfer instructions have been received in
writing by the Trustee at its Corporate Trust Office or at its corporate trust
facility in the Borough of Manhattan, The City of New York, not later than five
Business Days prior to the record date for an applicable Interest Payment Date,
be made by wire transfer of immediately available funds in accordance with such
wire transfer instructions; and (ii) payment of available funds upon surrender
of this Security will be made at the Corporate Trust Office of the Trustee or at
the corporate trust facility of the Trustee located in the Borough of Manhattan,
The City of New York, or at such additional offices or agencies maintained for
such purpose as the Company may from time to time and in accordance with the
Indenture designate.
3. Certain Office. Initially, The Bank of New York, the Trustee
under the Indenture (in such capacity, the "Trustee"), will, at its Corporate
Trust Office in the Borough of Manhattan, The City of New York, act as the
Company's office or agency where the Securities may be presented or surrendered
for payment, where the Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and the Indenture may be served.
4. Indenture. The Company issued the Securities under an
Indenture dated as of December 12, 1997 (the "Indenture") between the Company
and the Trustee. The terms of the Securities include those stated in the
Indenture (including terms defined therein, which terms when used herein, unless
the context requires otherwise, shall have the meanings assigned to such terms
in the Indenture) and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "TIA"), as in effect on the date of
execution of the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of
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such terms. The Securities are unsecured general obligations of the Company
initially limited to $200,000,000 in aggregate principal amount and will rank on
a parity with all other unsecured and unsubordinated indebtedness of the
Company. The Indenture provides for the issuance of other series of debentures,
notes and other evidences of indebtedness (including the Securities, the "Debt
Securities") thereunder.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons and, if not in global form, in denominations of
$1,000 and integral multiples of $1,000. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Security Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need
not exchange or register the transfer of any Securities during the period
beginning on the opening of business 15 days before the day of mailing of a
notice of redemption of the Securities and ending at the close of business on
the day of such mailing or of any Securities selected for redemption, except the
unredeemed portion of any Securities being redeemed in part.
6. Persons Deemed Owners. The registered Holder of a Security
shall be treated as its owner for all purposes.
7. Redemption. The Securities will be redeemable, in whole or in
part, at the option of the Company at any time, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities, and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (not including any portion of such payments of interest accrued
as of the date of redemption) discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined below) plus 20 basis points, as
calculated by the Independent Investment Banker (as defined below) plus, in each
case, accrued and unpaid interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months
before or after the remaining life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or (ii) if such release (or any
successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such date of redemption. The Adjusted
Treasury Rate shall be calculated on the third Business Day preceding
the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of five Reference Treasury Dealer
Quotations for such date of redemption, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (ii) if the
Independent Investment Banker obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company to act as the independent investment
banker from time to time.
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"Reference Treasury Dealers" means (i) Lehman Brothers Inc. and
Barclays Capital Inc. and their respective successors; provided that,
if either of the foregoing shall cease to be a primary U.S. Government
securities dealer (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such date
of redemption.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the date of redemption to each Holder of the Securities to be
redeemed. Unless the Company defaults in payment of the redemption price, on and
after the date of redemption, interest will cease to accrue on the Securities or
portions thereof called for redemption.
8. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be supplemented with the
consent of the Holders of not less than a majority in aggregate principal amount
of the outstanding Securities, and any past default under the Indenture with
respect to the Securities, and its consequences, may be waived (other than a
default in the payment of the principal of (or premium, if any) or interest on
the Securities or in respect of a covenant or provision of the Indenture which
under Article 9 thereof cannot be modified or amended without the consent of the
Holder of each outstanding Security) by the Holders of not less than a majority
in principal amount of the outstanding Securities in accordance with the terms
of the Indenture. Without the consent of any Holder, the Company and the Trustee
may supplement the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency, in each case which shall not be inconsistent
with the provisions of the Indenture and which shall not adversely affect the
interest of the Holders of the Securities in any material respect; (ii) to
evidence the assumption by a successor Person of the obligations of the Company
under the Indenture and this Security; (iii) to change or eliminate any
restrictions on the payment of principal (or premium, if any) on Registered
Securities, to permit Registered Securities to be exchanged for Bearer
Securities or to permit the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interest of the Holders
of the Securities in any material respect; (iv) to add to the covenants of the
Company for the benefit of the Holders of the Securities or Holders of other
series of Debt Securities, or to surrender any right or power conferred by the
Indenture upon the Company; (v) to add to, delete from or revise the conditions,
limitations and restrictions on the authorized amount, terms or purpose of
issue, authentication and delivery of the Securities as set forth in the
Indenture; or (vi) to evidence and provide for the acceptance of appointment
under the Indenture by a successor Trustee with respect to the Securities and to
add to or change any of the provisions of the Indenture as shall be necessary to
provide for or facilitate the administration of the trusts thereunder by more
than one Trustee, pursuant to the requirements of the Indenture.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of the Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which consent is required or sought as of a
date fixed in accordance with the terms of the Indenture.
Subject to certain exceptions and limitations set forth in the
Indenture, without the consent of each Holder affected, the Company may not (i)
change the Stated Maturity of the principal of or any installment of interest on
any Security, (ii) reduce the principal amount of, or any premium or interest
on, any Security, (iii) change any Place of Payment where, or the currency in
which, any Security or any premium or interest thereon is payable, (iv) impair
the right to institute suit for the enforcement of any payment with respect to
any Security after the Stated Maturity thereof (or, in the case of redemption,
on or after the applicable Redemption Date), (v) reduce the percentage in
principal amount of the outstanding Securities whose Holders must consent to a
supplement or waiver, or reduce the requirements in Section 1504 of the
Indenture for quorum or voting, or make any change in the percentage of
principal amount of Securities necessary to waive compliance with certain
provisions of the Indenture or (vi) waive a continuing Default or Event of
Default in the payment of principal of or premium (if any) or interest on the
Securities.
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A supplemental indenture that changes or eliminates any
covenant or other provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Debt Securities under
the Indenture, or which modifies the rights of the Holders of Debt Securities of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the Holders of Debt Securities
of any other series.
9. Defaults and Remedies. Events of Default are defined in the
Indenture and generally include: (i) failure to pay principal of or any premium
on any Security when due and payable; (ii) failure to pay any interest on any
Security when due and payable, and the continuation of the default for 30 days;
(iii) failure to perform any other covenant, or breach of any warranty, of the
Company in the Indenture, continued for 60 days after written notice is given or
received as provided in the Indenture; (iv) certain events of bankruptcy,
insolvency, or reorganization; and (v) failure to pay at final maturity (after
the expiration of any applicable grace periods) or upon the declaration of
acceleration of payment of indebtedness for borrowed money of the Company or any
Subsidiary in excess of $25 million, if such indebtedness is not discharged, or
such acceleration is not annulled, within 10 days after written notice. If any
Event of Default at any time outstanding occurs and is continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities may declare the principal amount of all Securities to be
due and payable immediately. At any time after a declaration or occurrence of
acceleration with respect to the Securities has been made, but before a judgment
or decree based on acceleration has been obtained, the Holders of a majority in
aggregate principal amount of the then outstanding Securities may, under certain
circumstances, rescind and annul the acceleration.
Holders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power with respect to the Securities. The Trustee may withhold from Holders
notice of any continuing default (except a default in payment of principal,
premium (if any) or interest) if in good faith it determines that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
10. Discharge Prior to Maturity. The Indenture with respect to the
Securities shall be discharged and canceled upon the payment of all Securities
and, as provided in the Indenture, shall be discharged except for certain
obligations upon the irrevocable deposit with the Trustee of funds sufficient
for such payment.
11. Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
12. Authentication. This Security shall not be valid until
authenticated by the manual signature of an authorized signer of the Trustee.
13. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the correctness of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed thereon.
14. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform gifts
to Minors Act).
A-6
THE COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST AND WITHOUT
CHARGE A COPY OF THE INDENTURE. REQUEST MAY BE MADE TO:
VALERO ENERGY CORPORATION
ONE VALERO PLACE
SAN ANTONIO, TEXAS 78212
TELEPHONE: (210) 370-2000
ATTENTION: GENERAL COUNSEL
A-7
SCHEDULE OF EXCHANGES OF SECURITY*
The following exchanges of a part of this global Security for
definitive Securities have been made:
Principal amount of Signature of
Amount of decrease in Amount of increase this global Security authorized officer of
principal amount of in principal amount of following such Trustee or Security
Date of exchange this global Security this global Security decrease (or increase) Registrar
- ---------------- --------------------- ---------------------- ---------------------- ---------------------
- ---------------------
* This schedule to be included only if the Security is a Global Security.
A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to __________________________ (Insert
assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date:_________________ Your Signature:_______________________________
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee:____________________________________________________________
(Participant in a Recognized Signature Guaranty Medallion Program)