EXECUTION COPY
FIRST AMENDMENT
FIRST AMENDMENT, dated as of September 30, 2002 (this "Amendment"),
to the Amended and Restated Credit Agreement, dated as of May 17, 2002 (the
"Credit Agreement"; unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement are used herein as defined therein), among
TESORO PETROLEUM CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and financial institutions or entities party thereto (each a
"Lender" and, collectively, the "Lenders"), XXXXXX BROTHERS INC., as advisor,
lead arranger and book manager (in such capacity, the "Arranger"), XXXXXX
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the "Syndication
Agent"), ABN AMRO BANK N.V., BANK OF AMERICA, N.A., CREDIT LYONNAIS NEW YORK
BRANCH and THE BANK OF NOVA SCOTIA, as co-documentation agents (in such
capacity, the "Co-Documentation Agents") and BANK ONE, NA, as administrative
agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to consent to
amendments to certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to consent to the requested
amendments, on and subject to the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
I. Defined Terms. Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
II. Amendments to Credit Agreement.
1. Amendments to Section 1. Section 1.1 of the Credit Agreement is
hereby amended as follows:
(a) by deleting therefrom the definition of the term, "Applicable
Margin", and substituting in lieu thereof the following definition:
"Applicable Margin": (a) for the period from the Restatement Date to
the First Amendment Effective Date, for each Type of Loan under each
Facility, the rate per annum set forth opposite such Facility under the
relevant column heading below:
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Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Loans 2.00% 3.00%
Tranche A Term Loans 2.00% 3.00%
Tranche B Term Loans 2.50% 3.50%
(b) for the period from and after the First Amendment Effective
Date until the date which is 18 months after the First Amendment Effective
Date (the "Transition Date"), for each Type of Loan under each Facility,
the rate per annum set forth opposite such Facility under the relevant
column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Loans 3.00% 4.00%
Tranche A Term Loans 3.00% 4.00%
Tranche B Term Loans 3.50% 4.50%
and
(c) from and after the Transition Date, (i) with respect to
Revolving Credit Loans and Tranche A Term Loans, the Applicable Margins
determined pursuant to the Pricing Grid (it being understood that the
Applicable Margin for such Loans from and after the Transition Date until
the subsequent Adjustment Date shall be determined based upon the
Consolidated Leverage Ratio as of the last day of the fiscal quarter most
recently ended prior to the Transition Date with respect to which
financial statements have been delivered to the Lenders pursuant to
Section 6.1) and (ii) with respect to Tranche B Term Loans, 3.50% in the
case of Base Rate Loans and 4.50% in the case of Eurodollar Loans;
provided that following delivery to the Administrative Agent of financial
statements for a fiscal quarter ended on or after December 31, 2003
demonstrating that the ratio of Consolidated Total Debt to Consolidated
Total Capitalization was not greater than 0.50:1.00 as of the last day of
the fiscal quarter covered by such financial statements, the Applicable
Margin for Tranche B Term Loans shall be 2.50% in the case of Base Rate
Loans and 3.50% in the case of Eurodollar Loans until delivery to the
Administrative Agent of financial statements demonstrating that the ratio
of Consolidated Total Debt to Consolidated Total Capitalization was
greater than 0.50:1.00 as of the last day of the fiscal quarter covered by
such financial statements.
(b) by amending the definition of the term "Consolidated EBITDA" to
delete the further proviso at the end of such definition in its entirety.
(c) by adding thereto the following definitions in their appropriate
alphabetical order:
"Additional Interest": as defined in Section 2.13(c).
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"Consolidated Current Assets": of any Person at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the
caption "total current assets" (or any like caption) on a consolidated
balance sheet of such Person and its Subsidiaries at such date.
"Consolidated Current Liabilities": of any Person at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of such Person and its Subsidiaries at such
date.
"Consolidated Modified Quick Ratio": for any date, the ratio of (a)
(i) the sum of (A) Consolidated Current Assets on such date, plus (B) the
aggregate amount of the Available Revolving Credit Commitments of all
Lenders on such date, minus (ii) all crude oil and feedstocks inventory at
such date, to (b) the sum of (i) Consolidated Current Liabilities on such
date plus (without duplication ) (ii) the aggregate amount of the
Revolving Loans outstanding on such date.
"First Amendment Effective Date": the "Amendment Effective
Date", as defined in the First Amendment, dated as of September 30,
2002, to this Agreement.
2. Amendments to Section 2. (a) Section 2.7(a) of the
Credit
Agreement is hereby amended to add the following sentence at the end of such
provision:
Notwithstanding the foregoing, commitment fees shall be calculated at the
rate of 0.75% per annum for the period from the First Amendment Effective
Date until the date on which the Lenders receive the unaudited financial
statements of the Borrower and its consolidated Subsidiaries for the
fiscal quarter ended September 30, 2003.
(b) Section 2.13 of the
Credit Agreement is hereby amended by
redesignating paragraph (d) thereof as paragraph (e), and inserting before such
redesignated paragraph (e) the following new paragraph (d):
(d) From and after the First Amendment Effective Date, additional
interest ("Additional Interest") shall accrue on each Base Rate Loan and
each Eurodollar Loan at a rate of 1.00% per annum for each day on which
such Loan is outstanding. Such Additional Interest shall be payable in
arrears on September 30, 2003, and thereafter, on the first day of each
subsequent fiscal quarter; provided that (i) such Additional Interest
shall cease to accrue on the later of March 31, 2004 and the date of
delivery to the Administrative Agent of financial statements for a fiscal
quarter ended on or after December 31, 2003 demonstrating that the ratio
of Consolidated Total Debt to Consolidated Total Capitalization was not
greater than 0.55:1.00 as of the last day of the fiscal quarter covered by
such financial statements and (ii) any accrued but unpaid Additional
Interest as of the date of delivery of such financial statements shall be
paid on the first day of the subsequent fiscal quarter; provided, further
that, notwithstanding the foregoing proviso, following delivery to the
Administrative Agent of financial statements demonstrating that the ratio
of Consolidated Total Debt to Consolidated Total Capitalization was
greater than 0.55:1.00 as of the last day of the fiscal quarter covered
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by such financial statements, Additional Interest shall accrue on each
Base Rate Loan and each Eurodollar Loan at a rate of 1.00% per annum for
each day on which such Loan is outstanding.
3. Amendments to Section 6. (a) Section 6.2 of the Credit
Agreement is hereby amended by redesignating paragraph (f) thereof as
paragraph (g), and inserting before such redesignated paragraph (g) the
following new paragraph (f):
(f) within 30 days after the end of each calendar month, (i) a
monthly report setting forth for such recently ended month (A) unaudited
Consolidated EBITDA, (B) unaudited Capital Expenditures (including
turnaround spending), (C) a liquidity report describing borrowings under
the Revolving Credit Facility, Letters of Credit outstanding, cash and
cash invested, and (D) a progress report on Asset Sales required pursuant
to Section 6.12 and (ii) a certificate duly executed by a Responsible
Officer containing all information and calculations necessary for
determining compliance by the Borrower and its Subsidiaries with the
provisions of Section 7.1(g).
(b) Section 6.12(a) of the Credit Agreement is hereby amended to
read in its entirety as follows:
(a) (i) On or prior to December 31, 2002, consummate one or more
transactions resulting in the receipt by the Borrower of Net Cash Proceeds
on or after the First Amendment Effective Date of at least $175,000,000
(including any deposit received in connection with any Asset Sale
consummated after the First Amendment Effective Date, whether received
before or after such date) in the aggregate from Asset Sales and/or
issuance by the Borrower of Specified Equity Securities, and (ii) on or
prior to March 31, 2003, consummate one or more transactions resulting in
the receipt by the Borrower of Net Cash Proceeds on or after the First
Amendment Effective Date of at least $200,000,000 in the aggregate from
Asset Sales and/or issuance by the Borrower of Specified Equity Securities
(including the Net Cash Proceeds received on or before December 31, 2002
pursuant to the foregoing clause (i)). The Net Cash Proceeds of such
transactions shall be applied within one Business Day after receipt
thereof as follows:
(A) with respect to Net Cash Proceeds received on or
prior to December 31, 2002, 50% of such Net Cash Proceeds shall be
applied to prepay the Term Loans as set forth in Section 2.10(e),
and the remaining 50% of such Net Cash Proceeds shall be applied,
first, to prepay any outstanding Revolving Credit Loans in
accordance with Section 2.10(e) and, second, if any of such Net Cash
Proceeds remain after prepaying all outstanding Revolving Credit
Loans, such remaining amount shall be deposited in the Cash
Collateral Account (without, in each case, any reduction in the
Revolving Credit Commitments); and
(B) any such Net Cash Proceeds received after December
31, 2002 shall be applied to prepay the Term Loans in accordance
with Section 2.10(e).
Notwithstanding any provision of Section 2.10 to the contrary, Net Cash
Proceeds from Asset Sales received prior to the date on which the Borrower
delivers, in accordance with
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Section 6.1(b), the unaudited financial statements of the Borrower and its
consolidated Subsidiaries for the fiscal quarter ended September 30, 2003,
shall not be permitted to be reinvested but must be applied as described
above in this Section 6.12.
4. Amendments to Section 7. (a) Section 7.1 of the Credit Agreement
is hereby amended to read in its entirety as follows:
7.1 Financial Condition Covenants.
(a) Consolidated Senior Leverage Ratio. Permit the Consolidated
Senior Leverage Ratio as at the last day of any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth
below to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Senior Leverage Ratio
-------------- ---------------------
3Q03 2.50:1.00
Thereafter 2.00:1.00
(b) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter
set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
Consolidated
Fiscal Quarter Fixed Charge Ratio
-------------- ------------------
3Q03 1.75:1.00
4Q03 1.75:1.00
Thereafter 2.00:1.00
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter set forth below to be less
than the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
3Q03 2.75:1.00
4Q03 3.25:1.00
1Q04 3.75:1.00
2Q04 3.75:1.00
3Q04 3.75:1.00
4Q04 3.75:1.00
Thereafter 4.00:1.00
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(d) Consolidated Total Debt. Permit the ratio of Consolidated Total
Debt to Consolidated Total Capitalization on any date during any fiscal
quarter set forth below to exceed the ratio set forth below opposite such
fiscal quarter:
Consolidated Total Debt/
Fiscal Quarter Total Capitalization Ratio
-------------- --------------------------
2Q02 0.69:1.00
3Q02 0.68:1.00
4Q02 0.68:1.00
1Q03 0.68:1.00
2Q03 0.67:1.00
3Q03 0.65:1.00
4Q03 0.625:1.00
1Q04 0.60:1.00
Thereafter 0.55:1.00
(e) 2Q02 Consolidated EBITDA. Permit Consolidated EBITDA of the
Borrower and its Subsidiaries for the fiscal quarter of the Borrower
ending June 30, 2002 to be less than $40,000,000.
(f) Consolidated EBITDA. Permit Consolidated EBITDA for any period
beginning on July 1, 2002 and ending on the last day of any fiscal quarter
set forth below to be less than the amount set forth below opposite such
fiscal quarter:
Cumulative Consolidated
Fiscal Quarter End EBITDA Minimum
------------------ --------------
3Q02 $45,000,000
4Q02 $45,000,000
1Q03 $90,000,000
2Q03 $270,000,000
(g) Consolidated Modified Quick Ratio. Permit the Consolidated
Modified Quick Ratio on any date set forth below to be less than the
ratio set forth opposite such month below:
Consolidated Modified Quick
Month End Ratio
--------- -----
10/31/02 1.55:1.00
11/30/02 1.45:1.00
12/31/02 1.40:1.00
1/31/03 1.30:1.00
2/28/03 1.25:1.00
3/31/03 1.25:1.00
4/30/03 1.35:1.00
5/31/03 1.50:1.00
6/30/03 1.65:1.00
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(b) Section 7.6 of the Credit Agreement is hereby amended to
add the following sentence at the end thereof:
Notwithstanding the foregoing, the Borrower shall not be permitted to make
any Restricted Payment during the period from the First Amendment
Effective Date through the end of fiscal year 2003.
(c) Section 7.18 of the Credit Agreement is hereby modified to
delete the table set forth therein and replace such table with the following:
Period ending Capital Expenditures
------------- --------------------
12/31/02 $253,500,000
6/30/03 $237,500,000
12/31/03 and Thereafter $210,000,000
III. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which all of the
following conditions precedent have been satisfied or waived:
1. The Administrative Agent shall have received a counterpart hereof
duly executed and delivered by Borrower.
2. The Administrative Agent shall have received executed Lender
Consent Letters, substantially in the form of Exhibit A hereto ("Lender Consent
Letters"), from Lenders constituting the Required Lenders.
3. The Administrative Agent shall have received an executed
Acknowledgment and Consent, in the form set forth at the end of this Amendment,
from each Loan Party other than the Borrower (such Acknowledgements and
Consents, together with this Amendment, the "Amendment Documents").
4. The Administrative Agent shall have received, for the account of
each Lender that executes and delivers a Lender Consent Letter on or prior to
later of (a) September 23, 2002 and (b) the date on which executed Lender
Consent Letters have been received from Lenders constituting the Required
Lenders, an amendment fee in an amount equal to 0.375% of the Aggregate Exposure
of such Lender.
IV. General.
1. Representation and Warranties. To induce the Administrative Agent
to enter into this Amendment and to induce the Lenders to consent thereto, the
Borrower hereby represents and warrants to the Agents and all of the Lenders as
of the Amendment Effective Date that:
(a) Each Loan Party has the corporate power and authority, and the
legal right, to make and deliver the Amendment Documents to which it is a party
and to perform the Loan Documents to which it is a party, as amended by the
Amendment Documents, and has
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taken all necessary corporate action to authorize the execution, delivery and
performance of such Amendment Documents and the performance of such Loan
Documents, as so amended.
(b) No consent or authorization of, approval by, notice to, filing
with or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the execution and delivery of the
Amendment Documents or with the performance, validity or enforceability of the
Loan Documents, as amended by the Amendment Documents.
(c) Each Amendment Document has been duly executed and delivered on
behalf of each Loan Party which is a party thereto.
(d) Each Amendment Document and each Loan Document, as amended by
the Amendment Documents, constitutes a legal, valid and binding obligation of
each Loan Party which is a party thereto enforceable against such Loan Party in
accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(e) The execution, delivery and performance of the Amendment
Documents and the performance of the Loan Documents, as amended by the Amendment
Documents, will not violate any Requirement of Law or Contractual Obligation of
any Loan Party which is a party thereto or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
(f) The representations and warranties made by the Loan Parties in
the Loan Documents are true and correct in all material respects on and as of
the Amendment Effective Date, after giving effect to the effectiveness of this
Amendment, as if made on and as of the Amendment Effective Date.
2. Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with the Amendment Documents, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
3. No Other Amendments; Confirmation. Except as expressly amended,
modified and supplemented hereby, the provisions of the Loan Documents are and
shall remain in full force and effect.
4. Governing Law; Counterparts. (a) THIS AMENDMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK.
(b) This Amendment may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together
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shall be deemed to constitute one and the same instrument. A set of the copies
of this Amendment, the Acknowledgment and Consent and the Lender Consent Letters
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent. This Amendment may be delivered by facsimile transmission
of the relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
TESORO PETROLEUM CORPORATION
By: /s/ G. Xxxxx Xxxxxxxxx
----------------------------------
Name: G. Xxxxx Xxxxxxxxx
Title: Vice President, Finance
BANK ONE, NA, as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
First Amendment
ACKNOWLEDGMENT AND CONSENT
Reference is made to the Credit Agreement described in the foregoing
Amendment (the "Credit Agreement"; terms defined in the Credit Agreement being
used in this Acknowledgement and Consent with the meanings given to such terms
in the Credit Agreement). Each of the undersigned parties to the Guarantee and
Collateral Agreement and/or one or more other Security Documents, in each case
as amended, supplemented or otherwise modified from time to time, hereby (a)
consents to the foregoing Amendment and the transactions contemplated thereby
and (b) acknowledges and agrees that the guarantees and grants of security
interests contained in the Guarantee and Collateral Agreement and other Security
Documents are, and shall remain, in full force and effect after giving effect to
the foregoing Amendment and all prior modifications to the Credit Agreement.
FAR EAST MARITIME COMPANY
GOLD STAR MARITIME COMPANY
TESORO FINANCIAL SERVICES HOLDING
COMPANY
VICTORY FINANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney-in-Fact
DIGICOMP INC.
KENAI PIPE LINE COMPANY
SMILEY'S SUPER SERVICE, INC.
TESORO ALASKA COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO AVIATION COMPANY
TESORO GAS RESOURCES COMPANY, INC.
TESORO HAWAII CORPORATION
TESORO HIGH PLAINS PIPELINE COMPANY
TESORO MARINE SERVICES HOLDING COMPANY
TESORO MARINE SERVICES, LLC
TESORO MARITIME COMPANY
TESORO NORTHSTORE COMPANY
TESORO PETROLEUM COMPANIES, INC.
TESORO REFINING AND MARKETING COMPANY
First Amendment
TESORO TECHNOLOGY COMPANY
TESORO TRADING COMPANY
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
TESORO VOSTOK COMPANY
By:/s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
First Amendment
EXHIBIT A
LENDER CONSENT LETTER
TESORO PETROLEUM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF MAY 17, 2002
To: Bank One, NA.,
as Administrative Agent
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX 0 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement,
dated as of May 17, 2002 (the "Credit Agreement"), among Tesoro Petroleum
Corporation (the "Borrower"), the Lenders parties thereto, Bank One, NA, as
Administrative Agent, and others. Unless otherwise defined herein, capitalized
terms used herein and defined in the Credit Agreement are used herein as therein
defined.
The Borrower has requested that the Lenders consent to amend the
Credit Agreement on the terms described in the Amendment in the form attached
hereto as Exhibit A (the "Amendment").
Pursuant to Section 10.1 of the Credit Agreement, the undersigned
Lender hereby consents to the execution by the Administrative Agent of the
Amendment.
Very truly yours,
--------------------------------
Name of Lender
By:
----------------------------
Name:
Title:
Dated as of September __, 2002
