CONFORMED COPY
$835,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
November 28, 1997
among
Valero Energy Corporation,
The Banks Listed Herein,
Morgan Guaranty Trust Company of New York,
as Administrative Agent,
and
Bank of Montreal,
as Syndication Agent and Issuing Bank
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . .1
Section 1.02. Accounting Terms and Determinations . . . . . . 15
Section 1.03. Types of Borrowings . . . . . . . . . . . . . . 15
Section 1.04. Other Definitional Provisions . . . . . . . . . 16
Section 2.01. Commitments to Lend . . . . . . . . . . . . . . 16
Section 2.02. Notice of Committed Borrowing . . . . . . . . . 17
Section 2.03. Money Market Borrowings . . . . . . . . . . . . 17
Section 2.04. Notice to Banks; Funding of Loans . . . . . . . 21
Section 2.05. Notes . . . . . . . . . . . . . . . . . . . . . 22
Section 2.06. Maturity of Loans . . . . . . . . . . . . . . . 23
Section 2.07. Interest Rates. . . . . . . . . . . . . . . . . 23
Section 2.09. Optional Termination or Reduction of
Commitments . . . . . . . . . . . . . . . . . 26
Section 2.10. Scheduled Termination of Commitments. . . . . . 26
Section 2.11. Optional Prepayments. . . . . . . . . . . . . . 26
Section 2.14. Computation of Interest and Fees. . . . . . . . 28
ARTICLE 3
Letters of Credit
Section 3.01. Letter of Credit Commitment . . . . . . . . . . 28
Section 3.02. Letter of Credit Requests . . . . . . . . . . . 29
Section 3.04. Agreement to Repay Letter of Credit Drawings. . 30
Section 3.05. Indemnity . . . . . . . . . . . . . . . . . . . 32
ARTICLE 4
Conditions
Section 4.01. Effectiveness . . . . . . . . . . . . . . . . . 32
Section 4.02. Borrowings. . . . . . . . . . . . . . . . . . . 34
ARTICLE 5
Representations and Warranties
Section 5.02. Corporate and Governmental Authorization;
No Contravention . . . . . . . . . . . . . . 35
Section 5.03. Binding Effect. . . . . . . . . . . . . . . . . 35
Section 5.04. Financial Information . . . . . . . . . . . . . 35
Section 5.05. Litigation. . . . . . . . . . . . . . . . . . . 36
Section 5.06. Compliance with ERISA . . . . . . . . . . . . . 36
Section 5.07. Environmental Matters . . . . . . . . . . . . . 37
Section 5.08. Taxes . . . . . . . . . . . . . . . . . . . . . 37
Section 5.09. Subsidiaries. . . . . . . . . . . . . . . . . . 37
Section 5.10. Not an Investment Company . . . . . . . . . . . 38
Section 5.11. Full Disclosure . . . . . . . . . . . . . . . . 38
Section 5.12. Representations in Subsidiary Guarantee
Agreement . . . . . . . . . . . . . . . . . . 38
ARTICLE 6
Covenants
Section 6.01. Information . . . . . . . . . . . . . . . . . . 38
Section 6.02. Payment of Obligations. . . . . . . . . . . . . 40
Section 6.03. Maintenance of Property; Insurance. . . . . . . 40
Section 6.04. Conduct of Business and Maintenance of
Existence . . . . . . . . . . . . . . . . . . 41
Section 6.05. Compliance with Laws. . . . . . . . . . . . . . 41
Section 6.06. Inspection of Property, Books and Records . . . 41
Section 6.07. Fixed Charge Coverage . . . . . . . . . . . . . 41
Section 6.08. Debt. . . . . . . . . . . . . . . . . . . . . . 42
Section 6.09. Minimum Consolidated Net Worth. . . . . . . . . 42
Section 6.10. Negative Pledge-Liens . . . . . . . . . . . . . 43
Section 6.11. Subsidiary Debt . . . . . . . . . . . . . . . . 45
Section 6.12. Guarantors. . . . . . . . . . . . . . . . . . . 45
Section 6.13. Consolidations, Mergers and Transfers of Assets 46
Section 6.14. Use of Proceeds . . . . . . . . . . . . . . . . 47
Section 6.15. Restriction on Other Agreements . . . . . . . . 47
ARTICLE 7
Defaults
Section 7.01. Events of Default . . . . . . . . . . . . . . . 47
Section 7.02. Cash Cover. . . . . . . . . . . . . . . . . . . 49
Section 7.03. Notice of Default . . . . . . . . . . . . . . . 50
ARTICLE 8
The Administrative Agent
Section 8.01. Appointment and Authorization . . . . . . . . . 50
Section 8.02. Administrative Agent and Agent. . . . . . . . . 50
Section 8.03. Action by Administrative Agent. . . . . . . . . 50
Section 8.04. Consultation with Experts . . . . . . . . . . . 50
Section 8.05. Liability of Administrative Agent . . . . . . . 51
Section 8.06. Indemnification . . . . . . . . . . . . . . . . 51
Section 8.07. Credit Decision . . . . . . . . . . . . . . . . 51
Section 8.08. Successor Administrative Agent. . . . . . . . . 52
Section 8.09. Administrative Agent's Fee. . . . . . . . . . . 52
Section 8.10. Syndication Agent . . . . . . . . . . . . . . . 52
ARTICLE 9
Change in Circumstances
Section 9.01. Basis for Determining Interest Rate
Inadequate or Unfair. . . . . . . . . . . . . 52
Section 9.02. Illegality. . . . . . . . . . . . . . . . . . . 53
Section 9.03. Increased Cost and Reduced Return . . . . . . . 54
Section 9.04. Taxes . . . . . . . . . . . . . . . . . . . . . 55
Section 9.05. Base Rate Loans Substituted for Affected
Fixed Rate Loans. . . . . . . . . . . . . . . 57
Section 9.06. Borrower's Right to Replace Banks . . . . . . . 58
ARTICLE 10
Miscellaneous
Section 10.01. Notices. . . . . . . . . . . . . . . . . . . . 58
Section 10.02. No Waivers . . . . . . . . . . . . . . . . . . 59
Section 10.03. Expenses; Indemnification. . . . . . . . . . . 59
Section 10.04. Sharing of Set-Offs. . . . . . . . . . . . . . 60
Section 10.05. Amendments and Waivers . . . . . . . . . . . . 60
Section 10.06. Successors and Assigns . . . . . . . . . . . . 61
Section 10.07. Collateral . . . . . . . . . . . . . . . . . . 62
Section 10.08. Governing Law; Submission to Jurisdiction. . . 62
Section 10.09. Counterparts; Integration. . . . . . . . . . . 63
Section 10.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . 63
Schedule I - Pricing Schedule
Schedule II - Commitment Schedule
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Administrative Agent
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Notice of Borrowing
Exhibit I - Subsidiary Guarantee Agreement
Exhibit J - Form of Guarantor Counsel Opinion
AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT dated as of November 28, 1997, among VALERO ENERGY
CORPORATION, the BANKS listed on the signature pages hereof, MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent, and BANK
OF MONTREAL, as Syndication Agent and Issuing Bank.
W I T N E S S E T H:
WHEREAS, the Borrower, the banks referred to therein, Morgan Guaranty
Trust Company of New York, as administrative agent for such banks and Bank
of Montreal as syndication agent and issuing bank, are parties to a Credit
Agreement dated as of May 1, 1997 (the "Existing Credit Agreement");
WHEREAS, the parties thereto desire to amend and restate the Existing
Credit Agreement as provided in this Agreement and, upon satisfaction of
the conditions specified in Section 4.01, said Credit Agreement will be so
amended and restated;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Additional IDB" means up to $25,000,000 aggregate principal amount of
industrial development bonds to be issued for the account of the Borrower or a
Subsidiary and supported by a Letter of Credit to be issued under this
Agreement.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07(b).
"Administrative Agent" means Morgan Guaranty in its capacity as
administrative agent and documentation agent for the Banks under the Financing
Documents, and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Agreement" means the Existing Credit Agreement as amended and restated
by this Amended Agreement and as the same may be further amended or restated
from time to time in accordance with the terms hereof.
"Amended Agreement" means this Amended and Restated Credit Agreement
dated as of November 28, 1997 among the Borrower, the Banks, the
Administrative Agent and BMO as Syndication Agent and Issuing Bank.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Assignee" has the meaning set forth in Section 10.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article 9.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multi-employer
Plan and which is maintained or otherwise contributed to by any member of the
ERISA Group.
"BMO" means Bank of Montreal.
"Bond Letters of Credit" means (i) the letter of credit issued by BMO and
outstanding under the Existing Credit Agreement supporting payment of up to
$98,500,000 principal amount of Industrial Development Corporation of Port of
Corpus Christi Revenue Refunding Bonds (Valero Refining and Marketing Company
Project) and specified amounts of accrued interest thereon and (ii) the letter
of credit issued by BMO and outstanding under the Existing Credit Agreement
supporting payment of up to $25,000,000 principal amount of Gulf Coast
Industrial Development Authority Waste Disposal Revenue Bonds (Valero Refining
and Marketing Company Project) and specified amounts of accrued interest
thereon. The amount available under each Bond Letter of Credit shall include,
for all purposes of this Agreement, any amounts not currently available
thereunder but subject to reinstatement in accordance with the terms thereof.
"Borrower" means Valero Energy Corporation, a Delaware corporation.
"Borrowing" has the meaning set forth in Section 1.03.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the Commitment Schedule, as such amount may
be reduced from time to time pursuant to Section 2.09 or 2.10 or increased or
reduced from time to time pursuant to Section 10.06(c), or the obligation of
such Bank to make Committed Loans and to participate in Letters of Credit
hereunder in an aggregate amount at any time outstanding not to exceed such
amount, as the context may require.
"Commitment Schedule" means the Schedule attached hereto and identified
as such.
"Committed Borrowings" has the meaning given such term in Section 1.03.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01.
"Consolidated Debt" means for any Person at any date the Debt of such
Person and its Consolidated Subsidiaries as of such date, determined on a
consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Net Income" means, for any Person for any period, the net
income of such Person and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated Net Income Applicable to Common Stock" means, for any
Person for any period, the net income to common shareholders of such Person
and its Consolidated Subsidiaries for such period determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Consolidated Net Worth" means for any Person at any date the Net Worth
of such Person and its Consolidated Subsidiaries as of such date determined on
a consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Subsidiary" means for any Person at any date any Subsidiary
or other entity the accounts of which would be consolidated with those of such
Person in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Total Assets" means for any Person at any date the total
assets of such Person and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date in accordance with generally accepted
accounting principles.
"Debt" of any Person means at any date, without duplication, (i) all
items of indebtedness or liability which, in accordance with generally
accepted accounting principles, would be included in determining total
liabilities as shown on the liability side of a balance sheet at the date as
of which indebtedness is to be determined, but excluding Net Worth, preferred
stock, deferred credits, deferred taxes, accounts payable (not more than 120
days past due), accrued expenses and taxes payable, (ii) all obligations under
leases which, in accordance with generally accepted accounting principles,
would at such time (and assuming that the Person was not a regulated
enterprise) be required to be capitalized on a balance sheet of such Person,
(iii) all non-contingent obligations (and, solely for purposes of Sections
6.10 and the definitions of Material Debt and Material Financial Obligations,
all contingent obligations) of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (iv) all indebtedness, liabilities or obligations of others of the
type described in clause (i), (ii) or (iii) that are Guaranteed by such Person
and (v) all indebtedness, liabilities or obligations of others of the type
described in clause (i), (ii), (iii) or (iv) that are secured by any Lien upon
the properties or assets of such Person, provided that the amount of any Debt
of such Person which constitutes Debt of such Person solely by reason of this
clause (v) shall not for purposes of this Agreement exceed the greater of the
book value or the fair market value of the properties or assets subject to
such Lien.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Deferred Turnaround and Catalyst Cost" means, for any period, the amount
of capital expenditures of the Borrower and its Consolidated Subsidiaries
during such period in respect of scheduled or periodic maintenance of
refineries where such scheduled or periodic maintenance requires the shutdown
of a refinery for a period in excess of 14 days; provided that Deferred
Turnaround and Catalyst Cost shall not for purposes of calculations of
compliance under Section 6.07 exceed $40,000,000 for any period of four
consecutive fiscal quarters.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Amended Agreement becomes effective
in accordance with Section 4.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" has the meaning set forth in the recitals
hereto.
"Existing Letter of Credit" means each Letter of Credit outstanding under
the Existing Credit Agreement on the Effective Date, including the Bond
Letters of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to Morgan Guaranty on such
day on such transactions as determined by the Administrative Agent.
"Fee Letters" means the letter agreements entered into from time to time
by the Borrower and Morgan Guaranty and/or BMO establishing fees payable by
the Borrower.
"Financial Letter of Credit" means the Bond Letters of Credit and any
other Letter of Credit which is not a Performance Letter of Credit.
"Financial Officer" means the chief financial officer, vice
president-finance or other financial vice president, controller, treasurer or
assistant treasurer of the Borrower.
"Financing Documents" means this Agreement, the Notes and each Subsidiary
Guarantee Agreement.
"Fixed Rate Borrowing" has the meaning set forth in Section 1.03.
"Fixed Rate Loans" means Euro-Dollar Loans or Money Market Loans
(excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant
to Section 9.01) or any combination of the foregoing.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the holder of such Debt
of the payment thereof or to protect such holder against loss in respect
thereof (in whole or in part), provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means, at any time, a Subsidiary which at or prior to such
time shall have delivered to the Administrative Agent (i) a Subsidiary
Guarantee Agreement in substantially the form of Exhibit I, duly executed by
such Subsidiary, which Subsidiary Guarantee Agreement has not been terminated
in accordance with its terms, (ii) an opinion of counsel for such Subsidiary
(which counsel may be an employee of the Borrower or such Subsidiary)
reasonably satisfactory to the Administrative Agent with respect to such
Subsidiary Guarantee Agreement, substantially in the form of Exhibit J hereto
and covering such additional matters relating to such Subsidiary Guarantee
Agreement as the Required Banks may reasonably request and (iii) all documents
the Administrative Agent may reasonably request relating to the existence of
such Subsidiary, the corporate authority for and the validity of such
Subsidiary Guarantee Agreement, and any other matters reasonably determined by
the Administrative Agent to be relevant thereto, all in form and substance
reasonably satisfactory to the Administrative Agent.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing,
the period commencing on the date of such Borrowing and ending one, two, three
or six months thereafter, as the Borrower may elect in the applicable Notice
of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (c) below, be extended
to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on
the date of such Borrowing and ending on the Termination Date;
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of
months thereafter as the Borrower may elect in accordance with Section 2.03;
provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (c) below, be extended
to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Borrowing, the
period commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 7 days) as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (b) below, be extended
to the next succeeding Euro-Dollar Business Day; and
(b) any interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment Grade Rating" means a rating of senior long-term unsecured
debt securities of the Borrower without any third-party credit enhancement of
(i) BBB- or higher by S&P or (ii) Baa3 or higher by Moody's.
"Issuing Bank" means BMO.
"Letters of Credit" has the meaning set forth in Section 3.01.
"Letter of Credit Outstandings" means, at any time, the sum (without
duplication) of the aggregate Stated Amount of all outstanding Letters of
Credit and the aggregate amount of all Unpaid Drawings in respect of Letters
of Credit.
"Letter of Credit Termination Date" means the date falling ten days prior
to the Termination Date.
"LIBOR Auction" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant to
Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Base Rate Loans or Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Material Debt" means Debt (other than the Notes) of the Borrower and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $25,000,000.
"Material Financial Obligations" means a principal or face amount of Debt
and/or payment obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, exceeding in the aggregate $25,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Material Subsidiary" means Valero Refining Company, Valero Marketing and
Supply Company, Valero Refining Company-Texas and Valero Refining
Company-Louisiana and (ii) each other Subsidiary of the Borrower that would be
a "significant subsidiary" as such term is defined in Regulation S-X
promulgated pursuant to the Securities Exchange Act of 1934, as amended to the
date hereof, and their respective successors.
"Moody's" means Moody's Investors Service, Inc.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Administrative Agent; provided that any Bank may from time to
time by notice to the Borrower and the Administrative Agent designate separate
Money Market Lending Offices for its Money Market LIBOR Loans, on the one
hand, and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to a
LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 9.01).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money Market Loan
in accordance with Section 2.03.
"Morgan Guaranty" means Morgan Guaranty Trust Company of New York.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group
during such five year period.
"Net Worth" of a Person means at any time the sum of its capital stock,
additional paid in capital, retained earnings, and any other account which, in
accordance with generally accepted accounting principles, constitutes
stockholders' equity, less treasury stock; provided that "Net Worth" shall not
include the liquidation value of any preferred stock classified as redeemable
preferred stock in accordance with generally accepted accounting principles.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a notice of borrowing in substantially the
form of Exhibit H.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 10.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage Participation" means, for each Bank, the percentage obtained
by dividing the amount of such Bank's Commitment by the aggregate amount of
the Commitments.
"Performance Letter of Credit" means a Letter of Credit to back
performance of non-financial or commercial contracts or undertakings of the
Borrower and its Subsidiaries of the type which qualifies for a 50% conversion
factor for purposes of risk-based capital adequacy regulations applicable to
the Banks.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multi-employer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty in New York City from time to time as its Prime Rate.
"Reference Banks" means the principal London offices of BMO and Morgan
Guaranty.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding at least 51% of the sum of the aggregate unpaid principal
amount of the Loans and the Letter of Credit Outstandings.
"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Termination Date.
"S&P" shall mean Standard & Poor's Ratings Services.
"Stated Amount" means, as to any Letter of Credit at any time, the
maximum amount then available to be drawn thereunder (without regard to
whether any conditions to drawing could then be met).
"Subsidiary" means, as to any Person, (i) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through one or more other Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through one or more other Subsidiaries, has a greater than 50%
equity interest at the time.
"Subsidiary Guarantee Agreement" means a Guarantee which may be entered
into by a Subsidiary substantially in the form of Exhibit I hereto.
"Syndication Agent" means BMO in its capacity as syndication agent
hereunder.
"Termination Date" means November 28, 2002, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair
market value of all Plan assets allocable to such liabilities under Title IV
of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"Unpaid Drawing" has the meaning set forth in Section 3.04(a).
"Valero S-1" means the Registration Statement on Form S-1 filed by the
Borrower with the Securities and Exchange Commission on May 13, 1997 pursuant
to the Securities Act of 1933, as amended.
"Valero 10-Q" means the Borrower's quarterly report on Form 10-Q for the
fiscal period ended September 30, 1997, as filed with the Securities and
Exchange Commission pursuant to the Exchange Act.
"Wholly-Owned Consolidated Subsidiary" means, as to any Person, any
Consolidated Subsidiary all of the shares of capital stock or other ownership
interests of which (except directors' qualifying shares) are at the time
directly or indirectly owned by such Person.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies
the Administrative Agent that the Borrower wishes to amend any covenant in
Article 6 to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Banks wish to
amend Article 6 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article 2 on a single date and for a single Interest Period. Borrowings
are classified for purposes of this Agreement either by reference to the
pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is
a Borrowing comprised of Euro-Dollar Loans and a "Fixed Rate Borrowing" is a
Borrowing comprised of Fixed Rate Loans) or by reference to the provisions of
Article 2 under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing" is a
Borrowing under Section 2.03 in which the Bank participants are determined on
the basis of their bids in accordance therewith).
Section 1.04. Other Definitional Provisions. References in this
Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include" or "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing and other means of reproducing
words in a visible form. References to any agreement or contract are to such
agreement or contract as amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof. Reference to any Person
include the successors and permitted assigns of such Person. References
"from" or "through" any date mean, unless otherwise specified, "from and
including" or "through and including", respectively.
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. During the Revolving Credit Period
each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section from time to
time in amounts requested by the Borrower, provided that the sum of the
aggregate principal amount of Committed Loans by such Bank at any one time
outstanding and such Bank's ratable share of the Letter of Credit Outstandings
at such time shall not exceed the amount of its Commitment. Each Borrowing
under this Section shall be in an aggregate principal amount of $1,000,000 or
any larger multiple of $1,000,000 (except that any such Borrowing may be in
the aggregate amount available in accordance with Section 4.02(b)) and shall
be made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.11, prepay Loans, and
re-borrow at any time during the Revolving Credit Period under this Section.
Section 2.02. Notice of Committed Borrowing. The Borrower shall give
the Administrative Agent a Notice of Borrowing not later than 12:30 P.M. (New
York City time) on (x) the date of each Base Rate Borrowing and (y) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case
of a Euro-Dollar Borrowing;
(b) the aggregate amount of such Borrowing;
(c) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans; and
(d) in the case of a Fixed Rate Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period.
Section 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers to make
Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit B hereto so as to be received no
later than 12:30 P.M. (New York City time) on (x) the fifth Euro-Dollar
Business Day prior to the date of Money Market Borrowing proposed therein, in
the case of a LIBOR Auction or (y) the Domestic Business Day next preceding
the date of Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the Borrower and the
Administrative Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in the
case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$1,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks
by telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request
relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money Market
Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Administrative Agent by telex or facsimile transmission at
its offices specified in or pursuant to Section 9.01 not later than (x) 2:00
P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 11:30 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective); provided that Money Market Quotes submitted by the
Administrative Agent (or any affiliate of the Administrative Agent) in the
capacity of a Bank may be submitted, and may only be submitted, if the
Administrative Agent or such affiliate notifies the Borrower of the terms of
the offer or offers contained therein not later than (x) one hour prior to the
deadline for the other Banks, in the case of a LIBOR Auction or (y) 15 minutes
prior to the deadline for the other Banks, in the case of an Absolute Rate
Auction. Subject to Articles 4 and 7, any Money Market Quote so made shall be
irrevocable except with the written consent of the Administrative Agent given
on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing;
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Bank, (x) must be $1,000,000 or a
larger multiple of $1,000,000, (y) may not exceed the principal amount of
Money Market Loans for which offers were requested and (z) may be subject to
an aggregate limitation as to the principal amount of Money Market Loans for
which offers being made by such quoting Bank may be accepted;
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or subtracted from such base
rate;
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan; and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower.
(i) The Administrative Agent shall promptly notify the Borrower of
(A) the terms of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (B) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request.
Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote.
(ii) The Administrative Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins
or Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market
Loans for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 12:30 P.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either
case, such other time or date as the Borrower and the Administrative Agent
shall have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of
the offers so notified to it pursuant to subsection (e). In the case of
acceptance, such notice shall be a Notice of Borrowing which shall specify the
aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Money Market Quote in whole or in part;
provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request;
(ii) the principal amount of each Money Market Borrowing must be
$1,000,000 or a larger multiple of $1,000,000;
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case may
be; and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements of
this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Absolute Rates,
as the case may be, for a greater aggregate principal amount than the amount
in respect of which such offers are accepted for the related Interest Period,
the principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
nearly as possible (in multiples of $1,000,000, as the Administrative Agent
may deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Administrative Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank of the contents thereof and of such Bank's
share (if any) of such Borrowing and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.
(b) Not later than 2:00 P.M. (New York City time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 10.01. Unless the
Administrative Agent determines that any applicable condition specified in
Article 4 has not been satisfied, the Administrative Agent will make the funds
so received from the Banks available tothe Borrower at the Administrative
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.12, as the case
may be.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Administrative Agent, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal Funds Rate.
If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in
such Borrowing for purposes of this Agreement.
(e) Nothing in subsection (d) shall be deemed to relieve any Bank from
its obligation to make Loans or to prejudice any right which the Borrower may
have against any Bank if such Bank defaults in the performance of its
obligations under this Agreement.
Section 2.05. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such
Loans. Each such Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement to the "Note" of
such Bank shall be deemed to refer to and include any or all of such Notes, as
the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 4.01(b), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
Section 2.06. Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Borrowing.
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day. Such interest shall be payable in arrears on the
third Domestic Business Day following the end of each calendar quarter and on
the third Domestic Business Day following the Termination Date (or earlier
date of termination of the Commitments in their entirety) for the period to
and including the last day of such calendar quarter or the Termination Date
(or such earlier date of termination of the Commitments in their entirety).
Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for
such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for
such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward,
if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are offered
to each of the Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount
of the Euro-Dollar Loan of such Reference Bank to which such Interest Period
is to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest rate
on Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to
United States residents). The Adjusted London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to the Interest
Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for
such day plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than six months
as the Administrative Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Reference Banks
are offered to such Reference Bank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the
Euro-Dollar Reserve Percentage (or, if the circumstances described in clause
(a) or (b) of Section 9.01 shall exist, at a rate per annum equal to the sum
of 2% plus the rate applicable to Base Rate Loans for such day).
(d) Subject to Section 9.01(a), each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the
first day thereof. Any overdue principal of or interest on any Money Market
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the Base Rate for such day. (e) The
Administrative Agent shall determine each interest rate applicable to the
Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If
any Reference Bank does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Bank or Banks or, if none
of such quotations is available on a timely basis, the provisions of Section
9.01 shall apply.
Section 2.08. Facility Fee. The Borrower shall pay to the
Administrative Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate (determined daily in accordance with the Pricing
Schedule). Such facility fee shall accrue (i) from and including the
Effective Date to but excluding the Termination Date (or such earlier date of
termination of the Commitments in their entirety), on the daily aggregate
amount of the Commitments (whether used or unused) and (ii) from and including
the Termination Date or such earlier date of termination to but excluding the
date the Loans shall be repaid in their entirety, on the daily sum of the
aggregate outstanding principal amount of the Loans and the Letter of Credit
Outstandings. Any facility fee payable under this Section shall be payable in
arrears on the third Domestic Business Day following the end of each calendar
quarter and on the third Domestic Business Day following the Termination Date
(or earlier date of termination of the Commitments in their entirety) for the
period to and including the last day of such calendar quarter or the
Termination Date (or such earlier date of termination of the Commitments in
their entirety).
Section 2.09. Optional Termination or Reduction of Commitments. During
the Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Administrative Agent, (i) terminate the
Commitments at any time, if no Loans are outstanding at such time and there
are no Letter of Credit Outstandings at such time or (ii) ratably reduce from
time to time by an aggregate amount of $5,000,000 or any larger multiple
thereof, the aggregate amount of the Commitments in excess of the sum of the
aggregate outstanding principal amount of the Loans and the Letter of Credit
Outstandings.
Section 2.10. Scheduled Termination of Commitments. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such
date.
Section 2.11. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Borrowing to Section 2.13, the Borrower may, upon notifying the
Administrative Agent no later than 12:30 p.m. (New York City time) on any
Domestic Business Day, prepay any Base Rate Borrowing (or any Money Market
Borrowing bearing interest at the Base Rate pursuant to Section 9.01(a)) or
upon at least three Euro-Dollar Business Days' notice to the Administrative
Agent, prepay any Euro-Dollar Borrowing, in each case in whole at any time, or
from time to time in part in amounts aggregating $1,000,000 or any larger
multiple of $1,000,000, (i) with respect to any Base Rate Borrowing, by paying
the principal amount to be prepaid and (ii) with respect to any Euro-Dollar
Borrowing or Money Market Borrowing bearing interest at the Base Rate, by
paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(b) Except as provided in Section 2.11(a), the Borrower may not prepay
all or any portion of the principal amount of any Money Market Loan prior to
the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and fees
hereunder, not later than 2:00 P.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 10.01. The
Administrative Agent will promptly distribute to each Bank its ratable share
of each such payment received by the Administrative Agent for the account of
the Banks. Whenever any payment of principal of, or interest on, the Base
Rate Loans or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal of, or interest on,
the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls
in another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Administrative Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article 2, 7 or 9
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section
2.04(a) or 2.11(c), the Borrower shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow or prepay, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of and basis for
determining such loss or expense, which certificate shall be conclusive in the
absence of manifest error.
Section 2.14. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
all fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
ARTICLE 3
Letters of Credit
Section 3.01. Letter of Credit Commitment. (a) Subject to and upon the
terms and conditions herein set forth, the Borrower may request the Issuing
Bank to issue, and the Issuing Bank agrees to issue, at any time and from time
to time on or after the Effective Date and prior to the Letter of Credit
Termination Date, one or more irrevocable letters of credit ("Letters of
Credit") for the account of the Borrower, and for the benefit of any obligee
of payment obligations of the Borrower or any of its Subsidiaries, in amounts
such that the sum of the aggregate outstanding principal amount of the Loans
and the Letter of Credit Outstandings shall at no time exceed the aggregate
amount of the Commitments.
(b) Each Letter of Credit shall be in a form customarily used by the
Issuing Bank on the Effective Date or otherwise in such form as may be
approved by the Issuing Bank. Each Letter of Credit shall be subject to the
Uniform Customs and Practice for Documentary Credits (1994 Revision),
International Chamber of Commerce Publication No. 500, (and any subsequent
revisions thereof approved by a Congress of the International Chamber of
Commerce and adhered to by the Issuing Bank), and shall also be subject to
Section 5-114 of the New York Uniform Commercial Code.
(c) Each Letter of Credit issued hereunder shall (i) be denominated in
United States dollars and provide for the payment of sight drafts and/or
documents when presented for honor thereunder in accordance with the terms
thereof and accompanied by the documents described therein, and (ii) have an
expiry date occurring not later than (1) the earliest of one year after the
date of issuance or (2) the Letter of Credit Termination Date.
Notwithstanding anything to the contrary contained in clause (ii) of the
preceding sentence, if requested prior to the Letter of Credit Termination
Date, but not earlier than 45 days prior to the expiry date of any Letter of
Credit, the expiry date of such Letter of Credit may be extended for a period
of up to one year from the expiry date in effect before giving effect to such
extension (but in no event later than the Letter of Credit Termination Date)
so long as such Letter of Credit could otherwise be issued at such time
pursuant to this Agreement.
(d) Upon the issuance of any Letter of Credit (or upon the Effective
Date with respect to any Existing Letter of Credit), the Issuing Bank shall be
deemed to have sold and each Bank shall be deemed to have acquired, an
undivided participation in each Letter of Credit issued by the Issuing Bank in
accordance with the terms hereof and in each drawing made thereunder in a
percentage equal to the Percentage Participation of such Bank.
Section 3.02. Letter of Credit Requests. Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Issuing Bank and the Administrative Agent notice no later than 12:30 p.m.
(Chicago time) on any Domestic Business Day, including instructions in such
notice, and such letter of credit applications or other documents that the
Issuing Bank customarily requires in connection therewith. In the event any
provision of any letter of credit application is inconsistent with, or in
conflict with, any provision of this Agreement, the provisions of this
Agreement shall control.
Section 3.03. Letter of Credit Fees. (a) The Borrower agrees to pay to
the Administrative Agent for the account of the Banks, a letter of credit fee
at a rate per annum equal to the applicable Letter of Credit Rate (determined
daily in accordance with the Pricing Schedule) for such day on the aggregate
daily amount available for drawing under all Letters of Credit issued
hereunder, such fee to be payable for the account of the Banks ratably in
proportion to their participation therein.
(b) The Borrower agrees to pay the Issuing Bank, for its own account, a
fronting fee in respect of each Letter of Credit issued hereunder in
accordance with BMO's Fee Letter.
(c) Fees payable pursuant to subsections (a) and (b) shall be calculated
to the end of each calendar quarter and to the Letter of Credit Termination
Date, and shall be due and payable on the third Domestic Business Day
following the end of each calendar quarter during the term hereof and on the
third Domestic Business Day following the Letter of Credit Termination Date.
Section 3.04. Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the Issuing Bank for any payment or
disbursement made by the Issuing Bank under any Letter of Credit (each such
amount so paid or disbursed until reimbursed, an "Unpaid Drawing") within one
Business Day after the date of such payment or disbursement, with interest on
the amount so paid or disbursed by the Issuing Bank, if and to the extent not
reimbursed prior to 2:00 P.M., Chicago time, on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding
the date the Issuing Bank was reimbursed therefor at a rate per annum which
shall be the rate of interest that would be applicable to Base Rate Loans
during such period.
(b) The Borrower's obligations under this Section 3.04 to reimburse the
Issuing Bank with respect to Unpaid Drawings in respect of Letters of Credit
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any set off,
counterclaim or defense to payment which the Borrower may have or have had
against any Bank (including the Issuing Bank in its capacity as issuer of the
Letter of Credit or as a Bank), including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
Drawing. The Borrower assumes all risks as a result of the acts or omissions
of the user of any Letter of Credit and all risks of the misuse of any Letter
of Credit. The Issuing Bank in its capacity as issuer of any Letter of Credit
shall not be liable:
(i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document reasonably believed to be genuine by the Person
examining such document in connection with any Letter of Credit, even if it
should prove to be in any respect invalid, insufficient, inaccurate,
fraudulent or forged,
(ii) for the validity or insufficiency of any instrument
transferring or assigning or purporting to assign any Letter of Credit or the
rights and benefits thereunder or the proceeds thereof,
(iii) for clerical, administrative or other ministerial errors,
such as failure of any draft to bear any reference or adequate reference to
any applicable Letter of Credit, or failure of any Person to note the amount
of any draft on any applicable Letter of Credit or to surrender or take up any
applicable Letter of Credit or to send forward any such document apart from
drafts as required by the terms of any Letter of Credit, each of which
provisions, if contained in any Letter of Credit, may be waived by the Issuing
Bank,
(iv) for errors, omissions, interruptions or delays in transmissions
or delivery of any message, by mail, telegraph, telex or otherwise,
(v) for any error, neglect, default, suspension or insolvency of
any correspondent,
(vi) for errors in translation or for errors in interpretation of
technical terms, (vii) for any loss or delay in the transmission or
otherwise of any Letter of Credit or any document or draft in connection
therewith or the proceeds thereof,
(viii) for any consequence arising from causes beyond the control
of the Issuing Bank, or
(ix) for any other act or omission to act or delay of any kind by
any Bank (including the Issuing Bank), the Administrative Agent or any other
Person which might, but for the provisions of this subsection (vii),
constitute a legal or equitable discharge of or defense to the Borrower's
obligations hereunder. Nothing in this subsection (b) is intended to limit
the right of the Borrower to make a claim against the Issuing Bank for damages
as contemplated by the proviso to the first sentence of Section 3.05.
(c) Promptly upon the occurrence of any Unpaid Drawing, the Issuing Bank
shall notify the Borrower and the Banks thereof. Failure to give such notice,
however, shall not affect the obligations of the Borrower or the Banks in
respect of such Unpaid Drawing.
(d) Promptly after receiving notice of any Unpaid Drawing, each Bank
shall pay to the Issuing Bank the amount of such Bank's Percentage
Participation in such Unpaid Drawing by transferring the same to the Issuing
Bank in immediately available funds at the office specified by it in such
notice. To the extent any Bank does not effect such payment on the date of
any Unpaid Drawing, such Bank agrees to pay interest to the Issuing Bank on
such amount until such payment is made at the overnight Federal Funds Rate.
If a Bank shall have made all payments to the Issuing Bank required by this
Section, the Issuing Bank shall pay such Bank its proportionate share of all
payments received by the Issuing Bank from the Borrower in respect of Unpaid
Drawings, all as, and, to the extent possible, when received by the Issuing
Bank.
Section 3.05. Indemnity. The Borrower hereby indemnifies and holds
harmless the Administrative Agent and each Bank from and against any and all
claims, damages, losses, liabilities, costs or expenses which it may incur,
and none of the Banks (including any Issuing Bank) nor the Administrative
Agent nor any of their officers, directors, employees or agents shall be
liable or responsible, by reason of or in connection with the execution and
delivery or transfer of or payment or failure to pay under any Letter of
Credit, including without limitation (i) any error, omission, interruption or
delay in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, (ii) any error in interpretation of technical terms, (iii)
any loss or delay in the transmission of any document required in order to
make a drawing under a Letter of Credit, (iv) any consequences arising from
causes beyond the control of the Issuing Bank, including without limitation
any government acts, or any other circumstances whatsoever (including without
limitation the circumstances enumerated in Section 3.04(b) above) in making or
failing to make payment under such Letter of Credit; provided that the
Borrower shall have a claim against the Issuing Bank for direct (but not
consequential) damage suffered by it, to the extent caused by (x) the willful
misconduct or gross negligence of the Issuing Bank in determining whether a
request presented under any Letter of Credit complied with the terms of such
Letter of Credit or (y) the Issuing Bank's failure to pay under any Letter of
Credit after the presentation to it of a request that strictly complies with
the terms and conditions of such Letter of Credit. Nothing in this Section is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.
ARTICLE 4
Conditions
Section 4.01. Effectiveness. This Amended Agreement shall become
effective on the date (the "Effective Date") that each of the following
conditions shall have been satisfied (or waived in accordance with Section
10.05):
(a) receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to which
an executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof by
such party);
(b) receipt by the Administrative Agent of a duly executed Note for
the account of each Bank dated on or before the Effective Date complying with
the provisions of Section 2.05;
(c) receipt by the Administrative Agent of an opinion of the
General Counsel of the Borrower, substantially in the form of Exhibit E hereto
and covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Administrative Agent of an opinion of Davis Polk
& Wardwell, special counsel for the Administrative Agent, substantially in the
form of Exhibit F hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request;
(e) receipt by the Administrative Agent of evidence satisfactory to
it of the payment of all principal of and interest on any loans outstanding
under, and of all other amounts payable under, the Existing Credit Agreement
up to but excluding the Effective Date; and]
(f) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Amended Agreement and the Notes, and
any other matters relevant hereto, all in form and substance satisfactory to
the Administrative Agent.
On the Effective Date the Existing Credit Agreement will be automatically
amended and restated in its entirety to read as set forth herein. On and
after the Effective Date the rights and obligations of the parties hereto
shall be governed by this Amended Agreement; provided the rights and
obligations of the parties hereto that are parties to the Existing Credit
Agreement shall continue to be governed by the provisions of the Existing
Credit Agreement with respect to the period prior to the Effective Date. On
the Effective Date, any Bank whose Commitment is changed to zero shall cease
to be a Bank party to this Agreement and all accrued fees and other amounts
payable under this Agreement for the account of such Bank shall be due and
payable on such date; provided that the provisions of Sections 9.03, 9.04 and
10.03 of this Agreement shall continue to inure to the benefit of each such
Bank. The Notes delivered to each Bank under the Existing Credit Agreement
shall be canceled and Notes under this Amended Agreement shall be given in
substitution therefor. Each Bank shall promptly after the Effective Date
deliver to the Borrower for cancellation the Note delivered to such Bank under
the Existing Credit Agreement. The parties hereto acknowledge that on and as
of the Effective Date, the Subsidiary Guaranty Agreement delivered to the
Administrative Agent pursuant to Section 4.03(c) of the Existing Credit
Agreement shall be automatically terminated without further action of the
parties thereto or hereto and the obligations of the guarantors thereunder
shall be released. The Administrative Agent shall promptly notify the
Borrower and each Bank of the effectiveness of this Amended Agreement, and
such notice shall be conclusive and binding on all parties hereto.
Section 4.02. Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing or of the Issuing Bank to issue or extend any
Letter of Credit is subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, or by the Issuing Bank and the
Administrative Agent of a notice as required by Section 3.02, as may be
applicable;
(b) the fact that, immediately after such Borrowing or the issuance
of such Letter of Credit, as the case may be, (i) the sum of the aggregate
outstanding principal amount of the Loans and the Letter of Credit
Outstandings will not exceed the aggregate amount of the Commitments and (ii)
the aggregate amount of the Letter of Credit Outstandings in respect of
Financial Letters of Credit shall not exceed $400,000,000;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement (except, in the case of a Refunding
Borrowing, the representations and warranties set forth in Sections 5.04(c)
and 5.05 as to any matter which has theretofore been disclosed in writing by
the Borrower to the Banks) shall be true on and as of the date of such
Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing as to the facts specified in
clauses (b), (c) and (d) of this Section.
ARTICLE 5
Representations and Warranties
The Borrower represents and warrants that:
Section 5.01. Corporate Existence and Power. The Borrower and each
Guarantor is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Section 5.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower and
each Guarantor of each Financing Document to which it is a party are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official (except for any reports required to be
filed by the Borrower with or to the Securities and Exchange Commission (or
any successor thereto) pursuant to the Exchange Act) and do not contravene, or
constitute a default under, any provision of applicable law or regulation or
of its certificate of incorporation or by-laws or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries.
Section 5.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower, and each other Financing Document, when
executed and delivered in accordance with this Agreement, will constitute a
valid and binding obligation of the Borrower and each Guarantor party thereto,
in each case enforceable in accordance with its terms.
Section 5.04. Financial Information.
(a) The unaudited pro forma consolidated balance sheet of the
Borrower as of December 31, 1996 and the related unaudited pro forma
consolidated statement of income for the year ended December 31, 1996 set
forth in the Valero S-1, are complete and correct in all material respects and
have been prepared on the basis described therein and otherwise in conformity
with generally accepted accounting principles applied on a basis consistent
with the financial statements referred to in subsection (b) of this Section
and show the consolidated financial position and results of operations of the
Borrower as if the Transactions (as defined in the Existing Credit Agreement)
had occurred, in the case of the consolidated balance sheet, on December 31,
1996 and in the case of the consolidated statement of earnings, as of January
1, 1996.
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1997 and the related
consolidated statements of income and cash flows for the fiscal period then
ended, set forth in the Valero Form 10-Q, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such fiscal period.
(c) Since September 30, 1997, there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 5.05. Litigation. Except as disclosed in the Valero Form 10-Q
or otherwise disclosed in writing to the Banks prior to the execution and
delivery of this Amended Agreement, there is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could reasonably be
expected to materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity of any Financing Document.
Section 5.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multi-employer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could reasonably be expected to result in
the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
Section 5.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts or causes to be conducted an ongoing review of
the effect of Environmental Laws on the business, operations and properties of
the Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation, any
capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit
or contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Substances, and
any actual or potential liabilities to third parties, including employees, and
any related costs and expenses). On the basis of this review, the Borrower
has reasonably concluded that such associated liabilities and costs, including
the costs of compliance with Environmental Laws, are unlikely to have a
material adverse effect on the business, financial condition, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
Section 5.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of taxes or other governmental charges are, in
the opinion of the Borrower, adequate.
Section 5.09. SubsidiariesEach of the Borrower's Subsidiaries is a
corporation, partnership or other legal entity duly organized, validly
existing and is in good standing in each jurisdiction in which the ownership
of its properties or the conduct of its business requires such qualification
and where the failure to so qualify could reasonably be expected to have a
material adverse effect on the business, financial position or results of
operations of the Borrower and its Subsidiaries, taken as a whole. Each of
the Borrower's Subsidiaries has all legal power and all governmental licenses,
authorizations, consents and approvals required to own its assets and to carry
on its business as now conducted and where the failure to have any such
corporate or partnership power, licenses, authorizations, consents or
approvals could reasonably be expected to have a material adverse effect on
the business, financial position, results of operation of the Borrower and its
Subsidiaries, taken as a whole.
Section 5.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 5.11. Full Disclosure. All information heretofore furnished by
the Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Administrative
Agent or any Bank will be, true and accurate in all material respects on the
date as of which such information is stated or certified. The Borrower has
disclosed to the Banks in writing any and all facts which materially and
adversely affect or could reasonably be expected to materially and adversely
affect (to the extent the Borrower can now reasonably foresee), the business,
operations or financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under the Financing Documents.
Section 5.12. Representations in Subsidiary Guarantee Agreement. Each
representation and warranty of each Guarantor set forth in its Subsidiary
Guarantee Agreement (if any) is true and correct.
ARTICLE 6
Covenants
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any Letter of Credit Outstanding hereunder or any amount payable
under any Note remains unpaid:
Section 6.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 105 days after the end
of each fiscal year of the Borrower, a Form 10-K of the Borrower and its
Consolidated Subsidiaries for such fiscal year as filed with the Securities
and Exchange Commission;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
Form 10-Q of the Borrower and its Consolidated Subsidiaries for such quarter
as filed with the Securities and Exchange Commission;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of a Financial Officer
of the Borrower (i) setting forth whether the Borrower was in compliance with
the requirements of Sections 6.07 to 6.13, inclusive, on the date of such
financial statements, (ii) with respect to Sections 6.07 to 6.09, inclusive,
and Sections 6.11 and 6.13, setting forth the calculations in reasonable
detail required to establish whether the Borrower was in compliance with the
requirements of such Sections and (iii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements whether anything has come to
their attention to cause them to believe that any Default existed on the date
of such statements.
(e) within five days after any Financial Officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate of
a Financial Officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which could reasonably be expected to
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or notice
that any Multi-employer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code, a
copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multi-employer Plan or in respect of
any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could reasonably be expected to result in
the imposition of a Lien or the posting of a bond or other security, a
certificate of a Financial Officer of the Borrower setting forth details as to
such occurrence and action, if any, which the Borrower or applicable member of
the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Section 6.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, at or
before maturity, all their respective material obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will maintain, and
will cause each of its Subsidiaries to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.
Section 6.03. Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each of its Subsidiaries to
keep, all of its property useful and necessary in its business in good working
order and condition, ordinary wear and tear excepted, as would a prudent owner
and operator of similar properties.
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and business of its Subsidiaries against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or similar businesses and similarly situated, of such type
and in such amounts and with such levels of deductibles, as are customarily
carried under similar circumstances by such other corporations.
Sectin 6.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each of its Subsidiaries to continue,
to engage in business of the same general type as now conducted by the
Borrower and its Subsidiaries, and will preserve, renew and keep in full force
and effect, and will cause each of its Subsidiaries to preserve, renew and
keep in full force and effect their respective legal existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section shall
prohibit (i) the merger of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if the entity
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and be continuing
or (ii) the termination of the business or legal existence of any Subsidiary
if the Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the Banks.
Section 6.05. Compliance with Laws. The Borrower will comply, and cause
each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except where the necessity
of compliance therewith is contested in good faith by appropriate proceedings.
Section 6.06. Inspection of Property, Books and Records. The Borrower
will keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which complete and accurate entries shall be made of all
financial and business transactions of the Borrower and its Subsidiaries; and
will permit, and will cause each of its Subsidiaries to permit,
representatives of any Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
Section 6.07. Fixed Charge Coverage. After the Effective Date, the
Borrower will not permit the ratio of:
(a) the sum (without duplication) of (i) Consolidated Net Income
(excluding extraordinary items) of the Borrower for the applicable period,
plus (ii) interest expense for the Borrower and its Subsidiaries on a
consolidated basis for such period, plus (iii) deferred federal and state
income taxes deducted in determining such Consolidated Net Income for such
period, plus (iv) depreciation and amortization expense deducted in
determining such Consolidated Net Income for such period, plus (v) other
noncash charges deducted in determining such Consolidated Net Income for such
period, minus (vi) other noncash credits added in determining such
Consolidated Net Income for such period, plus (vii) Deferred Turnaround and
Catalyst Cost for such period, to
(b) the sum (without duplication) of (i) interest incurred by the
Borrower and its Subsidiaries on a consolidated basis for such period (whether
expensed or capitalized), plus (ii) cash dividends paid by the Borrower on its
preferred stock during such period (other than dividends paid on preferred
stock held by the Borrower or a Subsidiary of the Borrower), plus (iii) cash
dividends paid by the Borrower on its common stock during such period (other
than dividends reinvested in newly issued or treasury shares of common stock
of the Borrower pursuant to any dividend reinvestment plan maintained by the
Borrower for holders of its common stock), plus (iv) the amount of mandatory
redemptions of preferred stock made by the Borrower during such period
(excluding redemptions of shares of such preferred stock held by the Borrower
or Subsidiaries of the Borrower), plus (v) Deferred Turnaround and Catalyst
Cost for such period,
to be less than 1.8 to 1.0 (i) until such time as four full fiscal quarters
shall have commenced and ended subsequent to July 31, 1997, for the period
consisting of such number of consecutive full fiscal quarters as at the time
shall have commenced and ended subsequent to July 31, 1997 and (ii)
thereafter, for any period of four consecutive fiscal quarters (taken as one
accounting period).
Section 6.08. Debt. Consolidated Debt of the Borrower will at no time
exceed 45% of the sum of Consolidated Debt of the Borrower plus the
Consolidated Net Worth of the Borrower plus the involuntary liquidation value
of outstanding shares of redeemable preferred stock of the Borrower.
Section 6.09. Minimum Consolidated Net Worth. Consolidated Net Worth of
the Borrower will at no time at or after the Effective Date be less than the
sum of (i) $850,000,000 plus (ii) an amount equal to 50% of Consolidated Net
Income Applicable to Common Stock for each fiscal quarter of the Borrower
ending after September 30, 1997 but prior to the date of determination for
which fiscal quarter Consolidated Net Income Applicable to Common Stock is
positive (but with no deduction on account of negative Consolidated Net Income
Applicable to Common Stock for any fiscal period of the Borrower) plus (iii)
75% of the aggregate increase in Consolidated Net Worth attributable to the
issuance and sale after September 30, 1997 of any capital stock of the
Borrower (other than the proceeds of any issuance and sale of any capital
stock (x) to a Subsidiary of the Borrower or (y) which is required to be
redeemed, or is redeemable at the option of the holder, if certain events or
conditions occur or exist or otherwise) or in connection with the conversion
or exchange of any Debt of the Borrower into capital stock after September 30,
1997.
Section 6.10. Negative Pledge-Liens. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except for:
(a) Liens existing on the date of the Existing Credit Agreement securing
Debt outstanding on the date of the Existing Credit Agreement in an aggregate
principal or face amount not exceeding $5,000,000;
(b) any Lien existing on any asset of any Person at the time such Person
becomes a Subsidiary;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such Person
is merged or consolidated with or into the Borrower or a Subsidiary;
(e) any Lien existing on any asset prior to the acquisition thereof by
the Borrower or a Subsidiary;
(f) any Lien arising out of refinancing, extending, renewing or
refunding (or successively refinancing, extending, renewing or refunding) any
Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that the principal amount of such Debt is not increased and
such Debt is not secured by any additional assets;
(g) any Lien on property constituting substitutions or replacements for,
or additions or accessions to, property of the Borrower or a Subsidiary and
created pursuant to after-acquired property provisions of any Lien otherwise
permitted by any of the foregoing clauses;
(h) Liens for or in connection with taxes or assessments, governmental
charges and similar charges not delinquent or being contested in good faith by
appropriate proceedings, including deposits as security in connection
therewith;
(i) Liens reserved in or arising under leases constituting "Debt" as
described in clause (ii) of the definition thereof, or reserved in or arising
under licenses, permits or operating leases for rent or other charges or to
secure the performance of obligations thereunder;
(j) Liens granted or arising in favor of an operator on assets subject
to joint operations to secure payments or other obligations due such operator
in connection with the operation of such assets;
(k) Liens granted or arising on joint venture and partnership interests
in favor of such joint ventures or partnerships or the other partners or
owners thereof on the Borrower's or its Subsidiaries' interests therein, or on
the assets of such partnerships or joint ventures, to secure payments or other
obligations due to such partnerships or joint ventures or the other partners
or owners thereof with respect to the business of such partnerships or joint
ventures;
(l) Mechanics' and materialmens' liens or any lien or charge in
connection with workmens' compensation, unemployment insurance or other social
security or old age pension obligations or deposits in connection therewith,
including obligations under ERISA; good faith deposits in connection with
tenders or leases of real estate, bids or contracts; deposits to secure public
or statutory obligations or to secure or in lieu of surety bonds;
(m) Liens securing judgments or orders for the payment of money, or
surety or appeal bonds with respect to any such judgments or order, in an
aggregate amount not exceeding $25,000,000, so long as no Event of Default
exists with respect thereto under Section 7.01(j);
(n) Liens on property of a Subsidiary to secure obligations of such
Subsidiary to the Borrower or to another Subsidiary; provided however, that
the obligations so secured may not be assigned, sold or otherwise transferred
to a Person other than the Borrower or another Subsidiary unless such Liens
are otherwise permitted hereunder;
(o) Rights reserved to or vested in, or obligations or duties owed to,
any governmental or public authority or railroad or utility by the terms of
any right, power, franchise, grant, license, permit or provision of law; and
any easement, right-of-way, mineral lease or other agreement relating to the
exploration, development, production or other exploitation of mining, oil,
gas, timber or other natural resources, exception or reservation in any
property of the Borrower or any Subsidiary granted or reserved in any property
of the Borrower or any Subsidiary which do not materially impair the use of
the property of the Borrower and its Subsidiaries, taken as a whole, for the
purposes for which it is held in the operation of the business of the Borrower
and its Subsidiaries;
(p) Liens and encumbrances (other than those securing Debt or Derivative
Obligations) existing upon property or rights in or relating thereto,
including rights of tenants in common or other common owners; zoning,
planning, environmental laws and ordinances and governmental regulations; and
minor defects or irregularities in or encumbrances on the titles to properties
which in the aggregate do not materially impair the use of the property of the
Borrower and its Subsidiaries, taken as a whole, for the purposes for which it
is held in the operation of the business of the Borrower and its Subsidiaries;
(q) Liens on cash, cash equivalents, options or futures positions and
other account holdings securing Derivatives Obligations or otherwise incurred
in connection with margin accounts with brokerage or commodities firms;
provided that the aggregate amount of assets subject to such Liens shall at no
time exceed $60,000,000;
(r) Liens arising in connection with statutory or contractual set-off
provisions granted or arising in the ordinary course of business in favor of
banks, brokers or other creditors;
(s) Liens arising in the ordinary course of its business which (i) do
not secure Debt or Derivatives Obligations, (ii) do not secure any obligation
in an amount exceeding $25,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially impair the use
thereof in the operation of its business; and
(t) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date not
to exceed 5% of Consolidated Net Worth.
Section 6.11. Subsidiary Debt. The total Debt of all Consolidated
Subsidiaries (excluding (i) Debt secured by a Lien permitted by clauses (a)
through (r) of Section 6.10, (ii) Debt of a Person existing at the time such
Person becomes a Subsidiary and not created in contemplation of such event,
(iii) the Additional IDB, (iv) Debt of the Borrower owing to any Subsidiary or
Debt of a Subsidiary owing to the Borrower or to any other Subsidiary and (v)
refinancings, extensions, renewals or refundings of any Debt permitted by the
foregoing clauses of this Section, provided that the principal amount of such
Debt referred to in clauses (i), (ii) and (iii) is not increased) will at no
time exceed $5,000,000 in aggregate outstanding principal amount.
Sectin 6.12. Guarantors. At such time (if any) hereafter as the
Borrower ceases to have an Investment Grade Rating, the Borrower agrees (i) to
cause each Material Subsidiary to become a Guarantor hereunder within 10 days
of such event and (ii) thereafter within 10 days after any Person becomes a
Material Subsidiary, to cause such Person to become a Guarantor hereunder.
Section 6.13. Consolidations, Mergers and Transfers of Assets. (a) The
Borrower will not consolidate or merge with or into any other Person; provided
that the Borrower may merge with another Person if:
(i) the Borrower or a Wholly-Owned Consolidated Subsidiary is the
corporation surviving such merger;
(ii) the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged (any such Person, the
"Successor"), shall be organized and existing under the laws of the United
States, any state thereof or the District of Columbia and shall expressly
assume, in a writing executed and delivered to the Administrative Agent for
delivery to each of the Banks, in form reasonably satisfactory to the
Administrative Agent, the due and punctual payment of the principal of and
interest on the Notes and the performance of the other obligations under this
Agreement and the Notes on the part of the Borrower to be performed or
observed, as fully as if such Successor were originally named as the Borrower
in this Agreement;
(iii) after giving effect to such merger, no Default shall have
occurred and be continuing; and
(iv) the Borrower has delivered to the Administrative Agent a
certificate on behalf of the Borrower signed by a Financial Officer and an
opinion of counsel (which counsel may be an employee of the Borrower), each
stating that all conditions provided in this Section 6.13 relating to such
transaction have been satisfied.
(b) The Borrower and its Subsidiaries will not, sell, lease, transfer or
otherwise dispose of (each, a "Transfer") all or part of the assets of the
Borrower and its Subsidiaries taken as a whole (other than (w) Transfers of
inventory or of abandoned, obsolete or worn-out machinery, fixtures, equipment
and materials in the ordinary course of business; (x) Transfers of inventory
pursuant to inventory monetization arrangements which provide for financing
not in excess of $150,000,000, (y) Transfers of cash or short-term investments
and (z) (i) if the Borrower has an Investment Grade Rating, Transfers of
assets by the Borrower to any Subsidiary or by any Subsidiary to the Borrower
or any other Subsidiary and (ii) otherwise, Transfers of assets by the
Borrower to any Guarantor or by any Guarantor to the Borrower or any other
Guarantor), to any Person, which assets have a fair market value (as
determined in good faith by the Borrower's Board of Directors) which, when
aggregated with the proceeds of the other assets of the Borrower and its
Subsidiaries taken as a whole Transferred subsequent to the date hereof
(exclusive of Transfers permitted by the foregoing clauses (w), (x), (y) and
(z)) are in an amount in excess of 25% of Consolidated Total Assets as of the
end of the immediately preceding fiscal year.
Section 6.14. Use of Proceeds. The proceeds of the Loans made under
this Amended Agreement will be used by the Borrower to fund working capital,
letters of credit and for general corporate purposes. None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U and Regulation G.
Section 6.15. Restriction on Other Agreements. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any agreement
prohibiting or having the effect of restricting the ability of any Subsidiary
of the Borrower to pay dividends or make any distribution, loans or advances
to the Borrower or any Subsidiary of the Borrower owning any capital stock of
or other equity interest in such Subsidiary (other than this Agreement).
ARTICLE 7
Defaults
Section 7.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or
any Unpaid Drawing, or shall fail to pay within five days of the due date any
interest, any fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant contained
in Sections 6.07 to 6.15, inclusive;
(c) the Borrower or any Guarantor shall fail to observe or perform any
covenant or agreement contained in the Financing Documents (other than those
covered by clause (a) or (b) above) for 30 days after notice thereof has been
given to the Borrower by the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by the
Borrower or any Guarantor in the Financing Documents or in any certificate,
financial statement or other document delivered pursuant to the Financing
Documents shall prove to have been incorrect in any material respect when made
(or deemed made);
(e) the Borrower or any Subsidiary of the Borrower shall fail to make
any payment in respect of any Material Financial Obligations when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the acceleration
of the maturity of any Material Debt or enables (or, with the giving of notice
or lapse of time or both, would enable) the holder of such Debt or any Person
acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Material Subsidiary of the Borrower shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Material Subsidiary of the Borrower seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for
a period of 60 days; or an order for relief shall be entered against the
Borrower or any Material Subsidiary of the Borrower under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $25,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multi-employer Plans which could cause one or more members of the ERISA Group
to incur a current payment obligation in excess of $25,000,000;
(j) judgments or orders for the payment of money in excess of
$25,000,000 in the aggregate shall be rendered against the Borrower or any
Subsidiary of the Borrower and such judgments or orders shall continue
unsatisfied and unstayed for a period of 60 days;
(k) any person or group of persons (within the meaning of Section 13 or
14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 20% or more of the
outstanding shares of common stock of the Borrower (excluding, however, any
such Person or group entitled to report such ownership on Schedule 13G in
accordance with Rule 13d-1(b)(1) or (2)); or, during any period of 24
consecutive calendar months, individuals who were directors of the Borrower on
the first day of such period shall cease to constitute a majority of the board
of directors of the Borrower (unless the election, or the nomination for
election, by the shareholders of the Borrower, or the appointment by the Board
of Directors, of each new director during such 24-month period was approved by
the vote at a meeting or the written consent of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period);
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 66 2/3% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate, and (ii) if requested by Banks holding Notes evidencing more than
66 2/3% in aggregate principal amount of the Loans, by notice to the Borrower
declare the Notes (together with accrued interest thereon) to be, and the
Notes shall thereupon become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; provided that in the case of any of the Events of Default
specified in clause (g) or (h) above with respect to the Borrower, without any
notice to the Borrower or any other act by the Administrative Agent or the
Banks, the Commitments shall thereupon terminate and the Notes (together with
accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
Section 7.02. Cash Cover. The Borrower agrees, in addition to the
provisions of Section 7.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Required Banks, pay to the
Administrative Agent an amount in immediately available funds (which funds
shall be held as collateral for the Letter of Credit Outstandings) equal to
the aggregate amount available for drawing under all Letters of Credit then
outstanding at such time, provided that, upon the occurrence of any Event of
Default specified in Section 7.01(g) or 7.01(h) with respect to the Borrower,
the Borrower shall pay such amount forthwith without any notice or demand or
any other act by the Administrative Agent or the Banks.
Section 7.03. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 7.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 8
The Administrative Agent
Section 8.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under the
Financing Documents and the Notes as are delegated to the Administrative Agent
by the terms thereof, together with all such powers as are reasonably
incidental thereto.
Section 8.02. Administrative Agent and Agent. Morgan Guaranty shall
have the same rights and powers under the Financing Documents as any other
Bank and may exercise or refrain from exercising the same as though it were
not the Administrative Agent, and Morgan Guaranty and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as
if it were not an Administrative Agent hereunder.
Section 8.03. Action by Administrative Agent. The obligations of the
Administrative Agent under the Financing Documents are only those expressly
set forth therein. Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 7.
Section 8.04. Consultation with Experts. Each of the Administrative
Agent and the Issuing Bank may consult with legal counsel (who may be counsel
for the Borrower), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel, accountants or
experts.
Section 8.05. Liability of Administrative Agent. Neither the
Administrative Agent nor the Issuing Bank nor any of their affiliates nor any
of their respective directors, officers, agents or employees shall be liable
for any action taken or not taken by it in connection with the Financing
Documents (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or willful misconduct. Neither the
Administrative Agent nor the Issuing Bank nor any of their affiliates nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with the Financing
Documents or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower; (iii) the satisfaction of
any condition specified in Article 4, except receipt of items required to be
delivered to the Administrative Agent or the Issuing Bank; or (iv) the
validity, effectiveness or genuineness of the Financing Documents or any other
instrument or writing furnished in connection therewith. Neither the
Administrative Agent nor the Issuing Bank shall incur any liability by acting
in reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Section 8.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Administrative Agent and the Issuing Bank,
its affiliates and their respective directors, officers, agents and employees
(to the extent not reimbursed by the Borrower) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with the Financing Documents or any action taken or omitted by such
indemnitees thereunder.
Section 8.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the
Syndication Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the
Syndication Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
Section 8.08. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right to appoint
a successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent gives
notice of resignation, then the retiring Administrative Agent may, on behalf
of the Banks, appoint a successor Administrative Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Financing Documents. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.
Section 8.09. Administrative Agent's Fee. The Borrower shall pay to
each of the Administrative Agent, the Syndication Agent and the Issuing Bank,
for its own account fees in the amounts and at the times specified in the Fee
Letters.
Section 8.10. Syndication Agent. Nothing in this Agreement shall impose
upon the Syndication Agent, in such capacity, any obligation or liability
whatsoever.
ARTICLE 9
Change in Circumstances
Section 9.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the London interbank market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Administrative Agent that
the Adjusted London Interbank Offered Rate, as the case may be, as determined
by the Administrative Agent will not adequately and fairly reflect the cost to
such Banks of funding their Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower
and the Banks, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless
the Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
(i) if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing
shall instead be made as a Base Rate Borrowing and (ii) if such Fixed Rate
Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day.
Section 9.02. Illegality. If, on or after the date of this Amended
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Administrative Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the
Borrower shall immediately prepay in full the then outstanding principal
amount of each such Euro-Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base
Rate Loan.
Section 9.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date of this Amended Agreement, in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any Bank (or
its Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the United States market for certificates of deposit or
the London interbank market any other condition affecting its Fixed Rate
Loans, its Note or its obligation to make Fixed Rate Loans or its obligations
hereunder in respect of Letters of Credit and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan or of issuing or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that, after the date of this
Amended Agreement, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Bank (or its Parent)
as a consequence of such Bank's obligations hereunder to a level below that
which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within 15 days after demand by such Bank (with a copy
to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder, together
with the basis for determining such additional amounts, shall be conclusive in
the absence of manifest error. In determining such amount, such Bank agrees
to act in good faith and to use reasonable averaging and attribution methods.
(d) In the event any Bank shall seek compensation pursuant to this
Section, the Borrower may give notice to such Bank (with copy to the
Administrative Agent) that it wishes to seek one or more financial
institutions (which may be one or more of the Banks) to assume the Commitment
of such Bank and to purchase its outstanding Loans and Note and its interest
in any outstanding Letters of Credit. Each Bank requesting compensation
pursuant to this Section agrees to sell its Commitment, Loans, Note and
interest in this Agreement and any other credit documents to any such
financial institution pursuant to, and subject to the conditions contained in
Section 9.06.
Section 9.04. Taxes. (a) For purposes of this Section, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Borrower pursuant to this Agreement or under any Note, and all liabilities
with respect thereto, excluding (i) in the case of each Bank and the
Administrative Agent, taxes imposed on or measured by its income and/or net
worth, and franchise or similar taxes imposed on it by a jurisdiction under
the laws of which such Bank or the Administrative Agent (as the case may be)
is organized or in which its principal executive office is located or, in the
case of each Bank, in which its Applicable Lending Office or other permanent
establishment for the conduct of business is located, and (ii) in the case of
each Bank, any United States withholding tax imposed on such payments but only
to the extent that such Bank is subject to United States withholding tax at
the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to this Agreement or under any Letter of Credit
or any Note or from the execution or delivery of, or otherwise with respect
to, this Agreement or any Letter of Credit or any Note.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section such Bank or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 10.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction
on amounts payable under this Section paid by such Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be paid within 15 days after such Bank or the Administrative Agent (as
the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter if requested in writing by the Borrower
(but only so long as such Bank remains lawfully able to do so), shall provide
the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate,
or any successor form prescribed by the Internal Revenue Service, certifying
that such Bank is entitled to benefits under an income tax treaty to which the
United States is a party which exempts the Bank from United States withholding
tax or reduces the rate of withholding tax on payments of interest for the
account of such Bank or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 9.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
9.04(b) or (c) with respect to Taxes imposed by the United States; provided
that if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which would require the Borrower to pay additional amounts to or for the
account of such Bank pursuant to this Section 9.04, and such Bank will change
the jurisdiction of its Applicable Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this Section, and
setting forth the additional amount or amounts to be paid to it hereunder,
together with the basis for determining such additional amounts, shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank agrees to act in good faith and to use reasonable averaging and
attribution methods.
Section 9.05. Base Rate Loans Substituted for Affected Fixed Rate Loans.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 9.02 or (ii) any Bank has demanded compensation under
Section 9.03 or 9.04 with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies
the Borrower that the circumstances giving rise to such suspension or demand
for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar
Loans shall be made instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of
principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead.
Section 9.06. Borrower's Right to Replace Banks. If at any time any
Bank shall be in receivership or shall seek compensation or recompense
pursuant to any provision of this Article 9, the Borrower shall have the right
to replace such Bank with another financial institution; provided, that such
new financial institution shall be acceptable to the Issuing Bank and the
Administrative Agent (unless the Bank to be replaced is the Administrative
Agent, in which case such new financial institution shall be acceptable to the
Issuing Bank). Each Bank agrees to its replacement at the option of the
Borrower pursuant to this Section, provided, that the successor financial
institution shall purchase without recourse the Commitment of such Bank and
all obligations of the Borrower to such Bank hereunder and under the Notes for
cash in an aggregate amount equal to the aggregate unpaid principal thereof,
all unpaid interest accrued thereon, all unpaid fees and letter of credit fees
accrued for the account of such Bank, and all other amounts (if any) then
owing to such Bank hereunder and otherwise in accordance with this Agreement
(including such amounts, if any, as would be payable by the Borrower pursuant
to Section 2.13 if the Loans of such Bank were prepaid in full on such date).
Nothing contained in this Section shall alter or modify the Borrower's
obligation to pay any amount payable to or for the account of the replaced
Bank pursuant to any other Section of this Article 9 accruing prior to the
replacement of such Bank. Notwithstanding anything to the contrary contained
in this Section 9.06, the Issuing Bank may not be replaced hereunder at any
time while it has Letters of Credit outstanding hereunder unless arrangements
satisfactory to the such bank (including, the furnishing of a standby letter
of credit in form and substance, and issued by an issuer, satisfactory to such
bank or the furnishing of cash collateral in amounts and pursuant to
arrangements satisfactory to such bank) have been made with respect to such
outstanding Letters of Credit.
ARTICLE 10
Miscellaneous
Section 10.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party:
(w) in the case of the Borrower or the Administrative Agent, at its address,
facsimile number or telex number set forth on the signature pages hereof, (x)
in the case of any Guarantor, to it care of the Borrower, (y) in the case of
any Bank, at its address, facsimile number or telex number set forth in its
Questionnaire or (z) in the case of any party, such other address, facsimile
number or telex number as such party may hereafter specify for the purpose by
notice to the Administrative Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and
the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Administrative Agent under Article 2 or Article 10 shall not be
effective until received.
Section 10.02. No Waivers. No failure or delay by the Administrative
Agent or any Bank in exercising any right, power or privilege or under any
Financing Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided in the Financing Documents shall be cumulative and not exclusive of
any rights or remedies provided by law.
Section 10.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Administrative Agent and the
Issuing Bank, including fees and disbursements of special counsel for the
Administrative Agent, in connection with the preparation of the Financing
Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank and each Bank, including (without duplication) the reasonable fees and
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Issuing Bank and each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which
may be incurred by such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating to or arising out
of the Financing Documents or any actual or proposed use of proceeds of Loans
hereunder; provided that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
Section 10.04. Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment of
indebtedness of the Borrower other than its indebtedness hereunder. Each of
the Borrower and the Guarantors agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in
a Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of the Borrower or such Guarantor, as the case may be, in the amount
of such participation.
Section 10.05. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Administrative Agent, the Syndication
Agent or the Issuing Bank are affected thereby, by it); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or any Unpaid
Drawing or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any Unpaid Drawing or any fees
hereunder or for termination of any Commitment, (iv) extend the Letter of
Credit Termination Date or (except as expressly contemplated by Section 3.02)
the expiry date of any Letter of Credit or (v) change this Section 10.05 or
the percentage of the Commitments or of the aggregate unpaid principal amount
of the Notes, or the number of Banks, which shall be required for the Banks or
any of them to take any action under this Section or any other provision of
this Agreement.
Section 10.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that, the Borrower may
not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of
Section 10.05 without the consent of the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article 9 with respect to its
participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to
an initial Commitment of not less than $5,000,000 or such lesser amount as may
be acceptable to the Borrower and the Administrative Agent), of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit G hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower, which shall not be unreasonably withheld, the Issuing
Bank and the Administrative Agent; provided that if an Assignee is an
affiliate of such transferor Bank, no such consent shall be required; and
provided further that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver
to the Borrower and the Administrative Agent certification as to exemption
from deduction or withholding of any United States federal income taxes in
accordance with Section 9.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 9.03 or 9.04
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 9.02, 9.03 or 9.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 10.07. Collateral. Each of the Banks represents to the
Administrative Agent, the Syndication Agent and each of the other Banks that
it in good faith is not relying upon any "margin stock" (as defined in
Regulation U and Regulation G) as collateral in the extension or maintenance
of the credit provided for in this Agreement.
Section 10.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The parties hereto hereby (i) submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby and (ii) irrevocably
waive, to the fullest extent permitted by law, any objection which they may
now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum; provided, however, that
nothing in this Section is intended to waive the right of any party to remove
any such action or proceeding commenced in any such New York State court to an
appropriate New York Federal court to the extent the basis for such removal
exists under applicable law.
Section 10.09. Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
Section 10.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VALERO ENERGY CORPORATION
By /s/ John D. Gibbons
Title: Vice President, Finance & Treasurer
Facsimile number: 210-370-2988
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ James S. Finch
Title: Vice President
BANK OF MONTREAL
By /s/ Donald G. Skipper
Title: Director
BANK OF TOKYO-MITSUBISHI, LTD.
By /s/ T. Yokokawa
Title: Deputy General Manager
BANKBOSTON, N.A.
By /s/ Terrence Ronan
Title: Vice President
BANQUE NATIONALE DE PARIS, HOUSTON AGENCY
By /s/ Henry F. Setina
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By /s/ Paul Travers
Title:Vice President
By /s/ John Sykes
Title: Assistant Vice President
CIBC INC.
By /s/ Aleksandra K. Dymanus
Title: Director
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Pascal Poupelle
Title: Executive Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Dixon P. Schultz
Title: Vice President
THE FUJI BANK, LIMITED
By /s/ Jacques M. Azagury
Title: Vice President & Manager
ROYAL BANK OF CANADA
By /s/ Gil J. Benard
Title: Senior Manager
SOCIETE GENERALE
By /s/ Richard A. Gould
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Frederic Hawley
Title: Vice President
BARCLAYS BANK PLC
By /s/ Nicholas A. Bell
Title: Director, Portfolio Management
CHRISTIANIA BANK, NEW YORK BRANCH
By /s/ William S. Phillips
Title: Vice President
By /s/ Peter M. Dodge
Title: First Vice President
DEN NORSKE BANK ASA
By /s/ Byron L. Cooley
Title: Senior Vice President
By /s/ J. Morten Kreutz
Title: Vice President
GUARANTY FEDERAL BANK, F.S.B.
By /s/ Jim R. Hamilton
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH
By /s/ Kazutoshi Kuwahara
Title: Executive Vice President,
Houston Office
THE SUMITOMO BANK, LIMITED
By /s/ Reiji Sato
Title: Joint General Manager
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
Title: Senior Manger, Loan Operations
CREDIT AGRICOLE INDOSUEZ
By /s/ Katharine L. Abbott
Title: First Vice President
By /s/ Dean Balice
Title: Senior Vice President Branch Manager
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Seiji Imai
Title: Vice President
THE FROST NATIONAL BANK
By /s/ Jim Crosby
Title: Senior Vice President
MELLON BANK, N.A.
By /s/ Roger E. Howard
Title: Vice President
THE MITSUI TRUST AND BANKING COMPANY,
LIMITED
By /s/ Margaret Holloway
Title: Vice President & Manager
THE SANWA BANK, LIMITED,
DALLAS AGENCY
By /s/ Matthew G. Patrick
Title: Vice President
UNION BANK OF SWITZERLAND, HOUSTON AGENCY
By /s/ Dan O. Boyle
Title: Managing Director
By /s/ W. Benson Vance
Title: Assistant Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,as Administrative Agent
By /s/ James S. Finch
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Fax: 212-648-5023
BANK OF MONTREAL, as Syndication
Agent and Issuing Bank
By /s/ Donald G. Skipper
Title: Director
700 Louisiana Avenue, Suite 4400
Houston, Texas 77002
Fax: 713-223-4007
Pricing Schedule
The "Euro-Dollar Margin", "Facility Fee Rate" and "Letter of Credit Rate"
for any day are the respective percentages set forth below in the
applicable row under the column corresponding to the Status that
exists on such day:
Status Level I Level II Level III Level IV Level V
Euro-Dollar Margin 0.2100% 0.2150% 0.3000% 0.500% 0.875%
Facility Fee Rate 0.0900% 0.110% 0.150% 0.250% 0.375%
Letter of Credit Rate
Performance 0.1050% 0.1075% 0.1500% 0.2500% 0.4375%
Financial 0.2100% 0.2150% 0.3000% 0.5000% 0.8750%
For purposes of this Schedule, the following terms have the following
meanings (subject to the last paragraph of this Schedule):
"Level I Status" exists at any date if, at such date, the Borrower's
long-term debt is rated at least BBB+ by S&P or at least Baa1 by Moody's.
"Level II Status" exists at any date if, at such date, (i) the Borrower's
long-term debt is rated at least BBB by S&P or at least Baa2 by Moody's
and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the Borrower's
long-term debt is rated at least BBB- by S&P or at least Baa3 by Moody's
and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the Borrower's
long-term debt is rated at least BB+ by S&P and least Ba1 by Moody's and
(ii) none of Level I Status, Level II Status and Level III Status exists.
"Level V Status" exists at any date if, at such date, no other Status
exists.
"Status" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status or Level V
Status exists at any date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement, and any rating assigned
to any other debt security of the Borrower shall be disregarded. The
rating in effect at any date is that in effect at the close of business
on such date.
So long as the Borrower is rated at least BB- by S&P and at least Ba3 by
Moody's, if Borrower is split-rated and the ratings differential is one
level, the higher of the two ratings will apply (e.g., BBB/Baa3 results in
Level II Status). If the Borrower is split-rated and the ratings
differential is more than one level, the average of the two ratings (or
the higher of two intermediate ratings) shall be used (e.g., BBB-/Ba1
results in Level III Status, as does BBB/Ba2).
Commitment Schedule
Bank Commitment
Morgan Guaranty Trust Company of New York $ 47,750,000
Bank of Montreal 47,750,000
Bank of Tokyo-Mitsubishi, Ltd. 39,500,000
BankBoston, N.A. 39,500,000
Banque Nationale De Paris, Houston Agency 39,500,000
Barclays Bank PLC 39,500,000
CIBC Inc. 39,500,000
Credit Lyonnais New York Branch 39,500,000
The First National Bank of Chicago 39,500,000
The Fuji Bank, Limited 39,500,000
Royal Bank of Canada 39,500,000
Societe Generale 39,500,000
Toronto Dominion (Texas), Inc. 39,500,000
Union Bank of Switzerland, Houston Agency 39,500,000
Den Norske Bank ASA 35,000,000
Christiania Bank, New York Branch 30,000,000
The Industrial Bank of Japan, Limited, New York Branch 30,000,000
Guaranty Federal Bank, F.S.B. 28,000,000
The Bank of Nova Scotia 22,500,000
Mellon Bank, N.A. 22,500,000
The Sanwa Bank, Limited, Dallas Agency 22,500,000
Credit Agricole Indosuez 20,000,000
The Dai-Ichi Kangyo Bank, Ltd. 20,000,000
The Frost National Bank 20,000,000
BHF-Bank Aktiengesellschaft 15,000,000
The Sumitomo Bank, Limited 0
The Mitsui Trust and Banking Company, Limited 0
Total $835,000,000