1
ITEM 14(a)3, EXHIBIT 4(z)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("First Amendment") effective
as of December 31, 1994 (the "First Amendment Effective Date") is made and
entered into by and among TESORO PETROLEUM CORPORATION (the "Company"), a
Delaware corporation, TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"),
individually, as an Issuing Bank and as Agent (the "Agent") and BANQUE PARIBAS
("BP"), individually, and as an Issuing Bank and as Co-Agent and the other
financial institutions (collectively, with TCB and BP, the "Lenders") parties
to the Credit Agreement (as hereinafter defined) as amended by this First
Amendment.
RECITALS
WHEREAS, the Company, the Agent, the Co-Agent and the Lenders are
parties to a Credit Agreement dated as of April 20, 1994 (the "Credit
Agreement"); and
WHEREAS, the Company, the Agent, the Co-Agent and the Lenders have
agreed, on the terms and conditions herein set forth, that the Credit Agreement
be amended in certain respects;
NOW, THEREFORE, IT IS AGREED:
Section 1. Definitions. Capitalized terms used but not otherwise
defined herein shall have the meaning assigned such terms in the Credit
Agreement.
Section 2. Amendments to the Credit Agreement. On and after the First
Amendment Effective Date, the Credit Agreement shall be amended as follows:
(a) The following new definition is hereby added to Section 1.01
of the Credit Agreement:
"Tesoro Refining and Marketing Group" shall mean Tesoro
Alaska, Tesoro R&M, Tesoro Alaska Pipeline Company, a Delaware
corporation, Tesoro Northstore Company, an Alaska
corporation, and Interior Fuels Company, an Alaska
corporation.
(b) The definition of "Cash Flow" set forth in Section 1.01 of
the Credit Agreement is hereby amended in its entirety to
read as follows:
"Cash Flow" shall mean, as to any Person, the sum of the net
income of such Person after taxes for any period plus, to the
extent deducted from net income, all non-cash items,
including, but not limited to, depreciation, depletion and
impairment, amortization of leasehold and intangibles,
deferred taxes and write-offs of exploration costs and
producing lease abandonments and write-offs of original issue
discount and deferred financing costs on existing Indebtedness
that has been replaced by Indebtedness permitted by Section
5.04(a)(ii), minus, to the extent included in the net income
of Tesoro E&P, revenues attributable to the supersedeas bond
posted pursuant to the Memorandum of Binding Agreement
relating to Tennessee Gas Pipeline Company v. Lenape Resources
Corp., No. 90-CI-12181 (District Court of
1
2
Bexar County, Texas, 57th Judicial District, September 1,
1994), as the same may be amended, supplemented, modified or
replaced from time to time, provided that such revenues may be
included in the net income of Tesoro E&P at such time and to
the extent that Tesoro E&P collects cash on such supersedeas
bond; in each case determined for such period and as to such
Person.
(c) Section 5.02(h)(i) of the Credit Agreement is hereby amended
in its entirety as follows:
(h) Bi-Weekly Borrowing Base Reports.
(i) As soon as available and in any event by
the Thursday following the close of each
two calendar week period, a Borrowing
Base Report dated and reflecting amounts
as of the close of business on Thursday
of the preceding calendar week.
(d) Section 5.03(b) of the Credit Agreement is hereby amended in
its entirety as follows:
(b) Working Capital. Maintain at all times its
Consolidated Working Capital Ratio of as least 1.30 to 1.00.
(e) The first sentence of Section 5.03(c) of the Credit Agreement
is hereby amended to read in its entirety as follows:
Maintain a cash flow coverage ratio for itself and its
Subsidiaries on a consolidated basis as of any Quarterly Date
equal to or greater than (i) 1.05 to 1.00 for the Rolling
Periods ending on December 31, 1994, March 31, 1995 and June
30, 1995 and (ii) 1.10 to 1.00 for the Rolling Period ending
on September 30, 1995 and for each Rolling Period thereafter
ending on the applicable Quarterly Date.
(f) Section 5.03(d) of the Credit Agreement is hereby amended in
its entirety as follows:
(d) Tesoro Refining and Marketing Group EBITDA.
Cause the Tesoro Refining and Marketing Group to maintain the
Tesoro Refining and Marketing Group EBITDA in an amount
equal to or greater than:
For the Rolling Minimum Tesoro Refining
Period Ending and Marketing Group EBITDA
--------------- ---------------------------
December 31, 1994 $ 5,000,000
March 31, 1995 $ 5,000,000
June 30, 1995 $15,000,000
September 30, 1995 $25,000,000
December 31, 1995 $25,000,000
March 31, 1996 and
thereafter $30,000,000
As used in this Subsection, Tesoro Refining and Marketing
Group EBITDA shall mean, as to the Tesoro Refining and
Marketing Group, and for any Rolling Period,
2
3
the amount equal to consolidated net income of the Tesoro
Refining and Marketing Group less any non-cash income
included in such net income, plus, to the extent deducted from
such net income, interest expense, depreciation, depletion and
impairment, amortization of leasehold and intangibles, other
non-cash expenses, and taxes; provided, that, gains or losses
on the disposition of assets shall not be included in Tesoro
Refining and Marketing Group EBITDA.
(g) Section 5.04(e) of the Credit Agreement is hereby amended by
deleting the reference to "and" at the end of clause (ix), by
changing the period at the end of clause (x) to read "; and"
and by adding the following new clause (xi):
(xi) the purchase of 20,000 shares of capital stock of
Kenai Pipe Line Company, a Delaware corporation, pursuant to
the stock purchase agreement dated as of December 29, 1994
among Chevron Pipe Line Company and Atlantic Richfield
Company, as Sellers, and Tesoro Alaska, as Buyer.
(h) Section 5.04(o)(iii) of the Credit Agreement is hereby amended
in its entirety as follows:
(iii) Additional Capital Expenditures.
Notwithstanding the maximum capital expenditure amounts
set forth in clauses (i) and (ii) above, the maximum
amount of capital expenditures for the Company and its
Subsidiaries on a consolidated basis and for Tesoro
Alaska may be increased by a total of $7,000,000 in the
aggregate spread, as the Company may elect, among the
calendar years of 1994, 1995 and 1996; provided that
after giving effect to any such increased capital
expenditures, the Company shall not be in Default.
(i) Annex II to the Credit Agreement is hereby amended to be
identical to Exhibit A attached hereto, being a revised
"Eligible Inventory Valuation".
Section 3. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Credit Agreement or any
of the other Financing Documents, or (b) except as expressly set forth herein,
prejudice any right or rights which the Lenders may now have or may have in the
future under or in connection with the Credit Agreement, the Financing
Documents or any of the other documents referred to therein. Except as
expressly modified hereby or by express written amendments thereof, the terms
and provisions of the Credit Agreement, the Notes, and any other Financing
Documents or any other documents or instruments executed in connection with any
of the foregoing are and shall remain in full force and effect. In the event
of a conflict between this First Amendment and any of the foregoing documents,
the terms of this First Amendment shall be controlling.
Section 4. Payment of Expenses. The Company agrees, whether or not
the transactions hereby contemplated shall be consummated, to reimburse and save
the Agent harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in connection with the
preparation, execution, delivery, amendment, modification, waiver and
enforcement of, or the preservation of any rights under this First Amendment,
including, without limitation, the reasonable fees and expenses of any local or
other counsel for the Agent, and all stamp taxes (including interest and
penalties, if any), recording taxes and fees, filing taxes and fees,
3
4
and other charges which may be payable in respect of, or in respect of any
modification of, the Credit Agreement and the other Financing Documents. The
provisions of this Section shall survive the termination of the Credit
Agreement and the repayment of the Loans.
Section 5. Governing Law. This First Amendment and the rights and
obligations of the parties hereunder and under the Credit Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas
and the United States of America.
Section 6. Descriptive Headings, etc. The descriptive headings of
the several Sections of this First Amendment are inserted for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof
Section 7. Entire Agreement. This First Amendment and the
documents referred to herein represent the entire understanding of the parties
hereto regarding the subject matter hereof and supersede all prior and
contemporaneous oral and written agreements of the parties hereto with respect
to the subject matter hereof, including, without limitation, any commitment
letters regarding the transactions contemplated by this First Amendment.
Section 8. Counterparts. This First Amendment may be executed in
any number of counterparts and by different parties on separate counterparts
and all of such counterparts shall together constitute one and the same
instrument.
Section 9. Amended Definitions. As used in the Credit agreement
(including all Exhibits thereto) and all other instruments and documents
executed in connection therewith, on and subsequent to the First Amendment
Effective Date the term "Agreement" shall mean the Credit Agreement as amended
by this First Amendment.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE Section 26.02
THIS FIRST AMENDMENT AND THE OTHER FINANCING DOCUMENTS EXECUTED BY ANY
OF THE PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION
HEREOF TOGERHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARNES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
4
5
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed and delivered by their respective duly authorized
offices as of January 20, 1995, and effective as of the date first above
written.
TESORO PETROLEUM CORPORATION
By: /s/ WILLIAM T. VAN KLEEF
---------------------------
William T. Van Kleef
Vice President, Treasurer
[Signature Page - 1]
6
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
Individually, as an Issuing Bank
and as Agent
By: /s/ P. STAN BURGE
----------------------------
P. Stan Burge
Vice President
Address for Notices:
712 Main Street
Houston, Texas 77002
Attention: Mr. P. Stan Burge
[Signature Page - 2]
7
BANQUE PARIBAS
Individually, as an Issuing Bank
and as Co-Agent
By: /s/ BRIAN MALONE
-------------------------------
Name: Brian Malone
Title: Vice President
By: /s/ MEI WAN TONG
------------------------------
Name: Mei Wan Tong
Title: Group Vice President
Address for Notices:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attention: Mr. Brian Malone
[Signature Page - 3]
8
BANK OF SCOTLAND
By: /s/ CATHERINE M. ONIFFREY
------------------------------
Name: Catherine M. Oniffrey
Title: Vice President
Address for Notices:
380 Madison Avenue
New York, New York 10017
Attention: Ms. Catherine Oniffrey
With Copy To:
1200 Smith Street
1750 Two Allen Center
Houston, Texas 77002
Attention: Ms. Janna Blanter
[Signature Page - 4]
9
CHRISTIANIA BANK
By: /s/ PETER M. DODGE
---------------------------
Name: Peter M. Dodge
Title: Vice President
By: /s/ CARL P SVENDSEN
---------------------------
Name: Carl P. Svendsen
Title: FVP
Address for Notices:
11 West 42nd Street, 7th Floor
New York, New York 10036
Attention: Mr. Peter Dodge
[Signature Page - 5]
10
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. ASHBY
------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan
Operations
Address for Notices:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Ms. Lauren Bianchi
With Copy To:
1100 Louisiana Street, Suite 3000
Houston, Texas 77002
Attention: Mr. Michael W. Nepveux
[Signature Page - 6]
11
NBD BANK
By: /s/ RUSSELL H. LIEBETRAU, JR.
--------------------------------
Name: Russell H. Liebetrau, Jr.
Title: Vice President
Address for Notices:
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Mr. Russell H. Liebetrau, Jr.
[Signature Page - 7]
12
BANK OF AMERICA ILLINOIS
By: /s/ RONALD E. McKAIG
-------------------------------
Name: Ronald E. McKaig
Title: Vice President
Address for Notices:
231 S. LaSalle Street
Chicago, Illinois 60697
Attention: Mr. Ron McKaig
[Signature Page - 8]
13
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: First Union Corporation of
North Carolina, as Agent
By: /s/ PAUL N. RIDDLE
--------------------------------
Name: Mr. Paul N. Riddle
Title: Vice President
Address for Notices:
1001 Fannin Street, Suite 2255
Houston, Texas 77002
Attention: Mr. Paul N. Riddle
[Signature Page - 9]
14
NATIONAL BANK OF CANADA
By: /s/ LARRY L. SEERS
-------------------------------
Name: Larry L. Seers
Title: Group Vice President
By: /s/ CHARLES COLLIE
--------------------------------
Name: Charles Collie
Title: Vice President
Address for Notices:
125 West 55th Street
New York, New York 10019-5366
With Copy To:
2121 San Jacinto, Suite 1850
Dallas, Texas 75201
Attention: Mr. David L. Schreiber
[Signature Page - 10]
15
THE FROST NATIONAL BANK
By: /s/ PHIL DUDLEY
--------------------------
Name: Phil Dudley
Title: Vice President
Address for Notices:
100 W. Houston Street
San Antonio, Texas 78205
Attention: Mr. Phil Dudley
[Signature Page - 11]
16
EXHIBIT A
REVISED ANNEX II
ELIGIBLE INVENTORY VALUATION
1. TESORO ALASKA PETROLEUM COMPANY
Market Price Indicators
-----------------------
A. Crude Oil:
1. East Side Cook Inlet Union's posted price for Kenai plus
$0.17 per barrel.
2. West Side Cook Inlet Union's posted price for Kenai plus
$0.17 per barrel.
3. Alaska North Slope (ANS) The mean posting price for ANS (Cal)
effective on the date of inventory
valuation as published in Platt's
Oilgram Price Report less $1.00 per
barrel.
B. Refined Products Anchorage locations:
-------------------
1. All Gasolines The average of the OPIS prices for
#2 Diesel Fuel each individual product for Texaco,
Jet Fuel (Commercial Jet A) Chevron, Mapco and Tesoro Alaska
Jet B for Anchorage.
Fairbanks location:
------------------
The average of the OPIS prices for
each individual product for Texaco,
Chevron, Mapco and Tesoro Alaska for
Anchorage plus $2.94 per barrel.
Kenai locations:
---------------
The average of the OPIS prices for
each individual product for Texaco,
Chevron, Mapco and Tesoro Alaska for
Anchorage plus $0.609 per barrel.
Valdez locations:
----------------
The average of the OPIS prices for
each individual product for Texaco,
Chevron, Mapco and Tesoro Alaska for
Anchorage plus $2.94 per barrel.
2. Residual Fuel Oil Spot Crude Price Assessments for ANS
(Cal) as posted in Platt's Oilgram
Price Report less $8.00 per barrel.
3. Propane Edmonton Canada average posting for
propane plus $7.45 per barrel.
Annex II-1
17
4. Butane Edmonton Canada average posting for
propane plus $7.45 per barrel minus
$5.04 per barrel.
5. JP4 (a) 70% of the PADS average of
unleaded gasoline as published in
OPIS plus (b) 30% of the PADS average
of Jet Fuel in Los Angeles, San
Francisco and Seattle as published in
OPIS.
6. HVGO 70% of the average price of the
Platt's West Coast Pipeline (Los
Angeles) for 87 octane unleaded plus
30% of the average price of the
Platt's West Coast Pipeline (Los
Angeles) for low-sulfur No. 2 on the
date of inventory valuations, minus
$7.98 per barrel.
7. VTB Cutter stock The average #2 Diesel Fuel price as
calculated for Kenai locations.
8. VTB 32.5% of the average price of the
Platt's Spot Crude Price Assessments
for ANS (Cal) on the date of
inventory valuations.
9. Industrial Fuel Oil The average posted price as published
in Platt's Bunkerwire Marine Fuel -
Oil Spot Prices for Los Angeles (per
metric ton) plus $5.10 per metric ton
shipping premium. This valuation is
then divided by 6.5 to convert metric
tons to barrels.
C. Unfinished Products/Blendstocks
1. Light straight run 90.3% of the average of the OPIS
prices for Texaco, Chevron, Mapco and
Tesoro Alaska for unleaded gas at
Anchorage minus $0.609 per barrel.
2. Isomerate 97.4% of the average of the OPIS
prices for Texaco, Chevron, Mapco and
Tesoro Alaska for unleaded gas at
Anchorage minus $0.609 per barrel.
3. Naptha 96.04% of the average of the OPIS
prices for Texaco, Chevron, Mapco and
Tesoro Alaska for unleaded gas at
Anchorage minus $0.609 per barrel.
Annex II-2
18
4. Reformate 107.4% of the average of the OPIS
prices for Texaco, Chevron, Mapco and
Tesoro Alaska for unleaded gas at
Anchorage minus $0.609 per barrel.
5. Gasoil 55% of the average Jet Fuel Prices
plus 50% of the average unleaded
gasoline prices as calculated herein.
6. MTBE Platt's Oilgram Price Report (Gulf
Coast) plus $2.52 per barrel.
7. HAGO The mean posting price for ANS (Cal)
as published in Platt's Oilgram Price
Report less $1.00 per barrel plus
$7.25 per barrel.
8. Ethanol Average posted price for Seattle and
Portland as published in OPIS.
D. Merchandise Weighted average cost (in-house)
<FN>
* Cook Inlet crude oil at the Kenai Refinery will be valued at East Side
Cook Inlet Crude oil market prices per above.
Annex II-3
19
II. TESORO REFINING, MARKETING & SUPPLY COMPANY
MARKET
STATE TERMINAL PRODUCTS PRICE INDICATORS
----- -------- -------- -----------------
California Sacramento Regular Average posted price as
Unleaded published in Oil Price
Unleaded Premium Information Service
Diesel #2
Stockton Regular Average posted price as
Unleaded published in Oil Price
Unleaded Premium Information Service
Diesel #2
Port Hueneme Regular Average posted price as
Unleaded published in Oil Price
Unleaded Premium Information Service
Diesel #2
Washington Vancouver Regular Average posted price as
Unleaded published in Oil Price
Unleaded Premium Information Service
Diesel #2
Oregon Portland Regular Average posted price as
Unleaded published in Oil Price
Unleaded Premium Information Service
Diesel #2
Annex II-4