exv10w23







EXHIBIT 10.23







 



$2,500,000,000 5-YEAR REVOLVING CREDIT AGREEMENT




dated as of August 17, 2005




among




VALERO ENERGY CORPORATION




The Lenders Party Hereto




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Global Administrative Agent




RBC CAPITAL MARKETS,

as Syndication Agent




and




BARCLAYS BANK PLC,

MIZUHO CORPORATE BANK, LTD.,




and




THE ROYAL BANK OF SCOTLAND PLC,

as Co-Documentation Agents




 






JPMORGAN SECURITIES INC. and RBC CAPITAL MARKETS,

as Co-Lead Arrangers and Joint Bookrunners




 

 









 





TABLE OF CONTENTS




ARTICLE I

DEFINITIONS




	 	 	 	 	 	 	 
	Section 1.01

	 	Defined Terms
	 	 	1	 
	Section 1.02

	 	Classification of Loans and Borrowings
	 	 	17	 
	Section 1.03

	 	Terms Generally
	 	 	17	 
	Section 1.04

	 	Accounting Terms; GAAP
	 	 	18	 
	Section 1.05

	 	Letter of Credit Amounts
	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE II

THE CREDITS

	 
	 	 	 	 	 	 
	Section 2.01

	 	Commitments
	 	 	18	 
	Section 2.02

	 	Commitment Increase
	 	 	18	 
	Section 2.03

	 	Acquisition Effective Date Commitment Increase
	 	 	20	 
	Section 2.04

	 	Loans and Borrowings
	 	 	20	 
	Section 2.05

	 	Requests for Borrowings
	 	 	21	 
	Section 2.06

	 	Letters of Credit
	 	 	22	 
	Section 2.07

	 	Funding of Borrowings
	 	 	27	 
	Section 2.08

	 	Interest Elections
	 	 	28	 
	Section 2.09

	 	Termination and Reduction of Commitments
	 	 	29	 
	Section 2.10

	 	Repayment of Loans; Evidence of Debt
	 	 	29	 
	Section 2.11

	 	Prepayment of Loans
	 	 	30	 
	Section 2.12

	 	Fees
	 	 	30	 
	Section 2.13

	 	Interest
	 	 	32	 
	Section 2.14

	 	Alternate Rate of Interest
	 	 	32	 
	Section 2.15

	 	Increased Costs
	 	 	33	 
	Section 2.16

	 	Break Funding Payments
	 	 	34	 
	Section 2.17

	 	Taxes
	 	 	35	 
	Section 2.18

	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	36	 
	Section 2.19

	 	Mitigation Obligations; Replacement of Lenders
	 	 	37	 
	Section 2.20

	 	Illegality
	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE III

REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 	 	 
	Section 3.01

	 	Organization; Powers
	 	 	39	 
	Section 3.02

	 	Authorization; Enforceability
	 	 	39	 
	Section 3.03

	 	Governmental Approvals; No Conflicts
	 	 	39	 
	Section 3.04

	 	Financial Condition
	 	 	39	 
	Section 3.05

	 	Environmental Matters
	 	 	39	 
	Section 3.06

	 	No Default
	 	 	40	 
	Section 3.07

	 	Investment and Holding Company Status
	 	 	40	 
	Section 3.08

	 	Taxes
	 	 	40	 
	Section 3.09

	 	ERISA
	 	 	40	 
	Section 3.10

	 	Disclosure
	 	 	40	 






i









 





	 	 	 	 	 	 	 
	ARTICLE IV

CONDITIONS

	 
	 	 	 	 	 	 
	Section 4.01

	 	Revolving Effective Date
	 	 	41	 
	Section 4.02

	 	Acquisition Effective Date
	 	 	42	 
	Section 4.03

	 	Each Credit Event
	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE V

AFFIRMATIVE COVENANTS

	 
	 	 	 	 	 	 
	Section 5.01

	 	Financial Statements and Other Information
	 	 	45	 
	Section 5.02

	 	Notices of Material Events
	 	 	46	 
	Section 5.03

	 	Existence; Conduct of Business
	 	 	47	 
	Section 5.04

	 	Payment of Obligations
	 	 	47	 
	Section 5.05

	 	Maintenance of Properties; Insurance
	 	 	47	 
	Section 5.06

	 	Books and Records; Inspection Rights
	 	 	47	 
	Section 5.07

	 	Compliance with Laws
	 	 	48	 
	Section 5.08

	 	Use of Proceeds
	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE VI

NEGATIVE COVENANTS

	 
	 	 	 	 	 	 
	Section 6.01

	 	Indebtedness
	 	 	48	 
	Section 6.02

	 	Liens
	 	 	48	 
	Section 6.03

	 	Fundamental Changes
	 	 	49	 
	Section 6.04

	 	Hedging Agreements
	 	 	50	 
	Section 6.05

	 	Transactions with Affiliates
	 	 	50	 
	Section 6.06

	 	Subsidiary Indebtedness
	 	 	51	 
	Section 6.07

	 	Consolidated Interest Coverage Ratio
	 	 	51	 
	Section 6.08

	 	Project Financing Indebtedness
	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE VII

EVENTS OF DEFAULT

	 
	 	 	 	 	 	 
	ARTICLE VIII

THE ADMINISTRATIVE AGENT AND THE GLOBAL ADMINISTRATIVE AGENT

	 
	 	 	 	 	 	 
	ARTICLE IX

MISCELLANEOUS

	 
	 	 	 	 	 	 
	Section 9.01

	 	Notices
	 	 	56	 
	Section 9.02

	 	Waivers; Amendments
	 	 	58	 
	Section 9.03

	 	Expenses; Indemnity; Damage Waiver
	 	 	59	 
	Section 9.04

	 	Successors and Assigns
	 	 	60	 
	Section 9.05

	 	Survival
	 	 	63	 
	Section 9.06

	 	Counterparts; Integration; Effectiveness
	 	 	63	 
	Section 9.07

	 	Severability
	 	 	64	 
	Section 9.08

	 	Right of Setoff
	 	 	64	 
	Section 9.09

	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	64	 
	Section 9.10

	 	 Waiver Of Jury Trial
	 	 	65	 
	Section 9.11

	 	Headings
	 	 	65	 
	Section 9.12

	 	Confidentiality
	 	 	65	 






ii









 






	 	 	 	 	 	 	 
	Section 9.13

	 	Interest Rate Limitation
	 	 	66	 
	Section 9.14

	 	USA PATRIOT Act
	 	 	66	 
	Section 9.15

	 	Waiver of Notice of Termination
	 	 	66	 






Pricing Schedule




Schedule 2.01 — Commitments

Schedule 2.03 — Acquisition Effective Date Commitment Increase

Schedule 2.06 — Outstanding Letters of Credit

Schedule 6.06 — Existing Subsidiary Indebtedness




EXHIBITS:




Exhibit A — Form of Assignment and Assumption

Exhibit B — Notice of Commitment Increase

Exhibit C — Form of Borrowing Request

Exhibit D — Form of Promissory Note

Exhibit E — Form of Opinion of Jay Browning, Borrower’s In-house Counsel

Exhibit F — Form of Opinion of Baker Botts L.L.P., Borrower’s Counsel




iii









 





          $2,500,000,000 5-YEAR REVOLVING CREDIT AGREEMENT dated as of August 17, 2005, among VALERO
ENERGY CORPORATION, the LENDERS party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent
and Global Administrative Agent, RBC CAPITAL MARKETS, the global brand name for the corporation and
investment banking businesses of Royal Bank of Canada and its affiliates, as Syndication Agent, and
BARCLAYS BANK PLC, MIZUHO CORPORATE BANK, LTD., and THE ROYAL BANK OF SCOTLAND PLC, as
Co-Documentation Agents.




          The parties hereto agree as follows:




ARTICLE I

Definitions




     Section 1.01 Defined Terms. As used in this Agreement, the following terms have the meanings specified
below:



     “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.



     “Acquisition” means the merger of Premcor Inc. into the Borrower pursuant to the terms
and conditions of the Acquisition Document.



     “Acquisition Document” means Agreement and Plan of Merger dated as of April 24, 2005
by and between the Borrower and Premcor Inc.



     “Acquisition Effective Date” means the date on which the conditions specified in
Section 4.02 are satisfied (or waived in accordance with Section 9.02).



     “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.



     “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.



     “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.



     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.



     “Agreement” means this $2,500,000,000 5-Year Revolving Credit Agreement, as the same
may from time to time be amended, modified, supplemented or restated.



     “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on such day



1









 




plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.




     “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.



     “Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar Loan,
or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per
annum set forth on the Pricing Schedule under the caption “ABR Margin,” “LIBOR Margin” or “Facility
Fee”, as the case may be, based upon the ratings by Moody’s and S&P, respectively, applicable on
such date to the Index Debt.



     “Approved Fund” has the meaning set forth in Section 9.04(b).



     “Arrangers” means, collectively, JPMorgan Securities Inc. and RBC Capital Markets, the
global brand name for the corporation and investment banking businesses of Royal Bank of Canada and
its affiliates, each in its capacities as co-lead arranger and joint bookrunner hereunder.



     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, substantially in the form of Exhibit A or any other form
approved by the Administrative Agent.



     “Availability Period” means the period from and including the Revolving Effective Date
to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.



     “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 Multiemployer Plan and which is maintained or
otherwise contributed to by any ERISA Affiliate.



     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.



     “Borrower” means Valero Energy Corporation, a Delaware corporation.



     “Borrowing” means Loans of the same Type, made, converted or continued on the same
date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.



     “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.05.



     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.



2









 





     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.



     “Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing within one year
from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits
or overnight bank deposits having maturities of six months or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus of not less than $250,000,000; (c)
commercial paper of an issuer rated at least A-2 by Standard & Poor’s Ratings Services or P-2 by
Moody’s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition; (d) money market
accounts or funds with or issued by Qualified Issuers; (e) short term debt obligations of an issuer
rated at least BBB by Standard & Poor’s Ratings Services or Baa2 by Moody’s Investor Service, Inc.,
and maturing within thirty days from the date of acquisition; (f) repurchase obligations with a
term of not more than 90 days for underlying securities of the types described in clause (a) above
entered into with any bank meeting the qualifications specified in clause (b) above; and (g) solely
with respect to a Subsidiary which is incorporated or organized under the laws of a jurisdiction
outside of the United States, in addition to the investments described in clauses (a) through (f)
of this definition, substantially similar investments denominated in foreign currencies (including
similarly capitalized foreign banks).



     “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) of shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital 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 (b) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated.



     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if



3









 




any) with any request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.




     “CI Lender” has the meaning set forth in Section 2.02(a).



     “Code” means the Internal Revenue Code of 1986, as amended from time to time.



     “Co-Documentation Agents” means, collectively, Barclays Bank PLC, Mizuho Corporate
Bank, Ltd., and The Royal Bank of Scotland plc, each in its capacity as co-documentation agent for
the Lenders hereunder.



     “Combined Commitment” means, with respect to each Combined Lender, the commitment(s)
of such Combined Lender to make Combined Loans under the Combined Credit Agreements and to acquire
participations in Letters of Credit under this Agreement, expressed as an amount representing the
maximum potential aggregate amount of such Combined Lender’s Combined Credit Exposure under the
Combined Credit Agreements, as such commitment(s) may be increased or reduced from time to time
pursuant to the terms of the Combined Credit Agreements or pursuant to assignments by or to such
Combined Lender pursuant to the provisions of the Combined Credit Agreements. The initial amount
of each Combined Lender’s Commitment is set forth on Schedule 2.01 to the applicable Combined
Credit Agreement, or in an Assignment and Assumption (as defined in each Combined Credit Agreement)
pursuant to which such Combined Lender shall have assumed its Combined Commitment, as applicable.
Notwithstanding the foregoing, until the Acquisition Effective Date has occurred, the total
“Combined Commitments” of the Combined Lenders shall not include the commitments of the Term
Lenders under the Term Credit Agreement. The initial aggregate amount of the Combined Lenders’
Combined Commitments is $1,500,000,000.



     “Combined Credit Agreements” means this Agreement and the Term Credit Agreement.



     “Combined Credit Exposure” means, with respect to any Combined Lender at any time, the
sum of the outstanding principal amount of such Combined Lender’s Combined Loans and its LC
Exposure at such time.



     “Combined Lenders” means the Lenders hereunder and the Term Lenders.



     “Combined Loans” means the loans made by the Combined Lenders to the Borrower pursuant
to the Combined Credit Agreements.



     “Combined Required Lenders” means, at any time, Combined Lenders having Combined
Credit Exposures and unused Combined Commitments representing more than 50% of the sum of the total
Combined Credit Exposures and unused Combined Commitments under the Combined Credit Agreements at
such time.



     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum potential aggregate amount of such Lender’s Credit Exposure
hereunder, as such commitment may be (a) increased from time to time pursuant to Section 2.02,
(b) increased on the Acquisition Effective Date pursuant to Section 2.03, (c) reduced from time



4









 




to time pursuant to Section 2.09, or (d) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders’ Commitments is $1,500,000,000.




     “Commitment Increase” has the meaning set forth in Section 2.02(a).



     “Commitment Increase Effective Date” has the meaning set forth in Section 2.02(b).



     “Competitor” means (a) any Person who is primarily engaged in businesses of the type
primarily conducted by the Borrower and its Subsidiaries and (b) any Affiliate of a Person
identified in clause (a) above (it being agreed that an investment firm or other financial
institution shall not be deemed to Control a Person described in clause (a) above merely as a
result of owning a minority interest in such Person if it does not otherwise Control such Person).



     “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus, without duplication and to the extent deducted in determining Consolidated Net Income for
such period, the sum of (a) total income tax expense, (b) Consolidated Interest Expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c) depreciation,
depletion and amortization expense, (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary expenses or losses (including, whether or
not otherwise includable as a separate item in the statement of such Consolidated Net Income for
such period, losses on sales of assets other than inventory sold in the ordinary course of
business) and (f) any other non-cash charges, and minus, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (x) any extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets other than inventory sold in
the ordinary course of business) and (y) any other non-cash income, all as determined for the
Borrower and its Subsidiaries on a consolidated basis. Consolidated EBITDA will be adjusted on a
pro forma basis (determined in a manner consistent with GAAP) to give effect during applicable
historical periods to each material acquisition or material Transfer, otherwise permitted by the
terms hereof, by the Borrower or its Subsidiaries of assets, including, without limitation,
investments in other Persons, as if such acquisition or Transfer had been made at the beginning of
the applicable period.



     “Consolidated Interest Coverage Ratio” means, on any day, the ratio of (i)
Consolidated EBITDA for the Rolling Period ending on the last day of the then most recent Fiscal
Quarter to (ii) Consolidated Interest Expense for such period.



     “Consolidated Interest Expense” means, with respect to the Borrower and its
Subsidiaries on a consolidated basis, for each Rolling Period, the total cash interest expense
(including that interest expense attributable to Capital Lease Obligations).



     “Consolidated Net Debt” means, at any date, the Indebtedness of the Borrower and its
Subsidiaries less the aggregate amount of (a) cash and Cash Equivalents held by the
Borrower



5









 




and its Subsidiaries at such date and (b) cash and Cash Equivalents that have been
deposited in a trust account or account created or pledged for the sole benefit of the holders of
any Indebtedness of the Borrower or its Subsidiaries that has been defeased pursuant to such
deposit and the other applicable terms of the instrument governing such Indebtedness, in each case
determined on a consolidated basis in accordance with GAAP.




     “Consolidated Net Tangible Assets” means, on any date, the aggregate amount of assets
(less applicable accumulated depreciation, depletion and amortization and other reserves and other
properly deductible items) of the Borrower and the Subsidiaries, minus (a) all current liabilities
of the Borrower and its Subsidiaries (excluding current maturities of long-term debt) and (b) all
goodwill of the Borrower and the Subsidiaries, all determined on a consolidated basis in accordance
with GAAP.



     “Consolidated Net Income” means, for any Person for any period, the net income of such
Person and its subsidiaries for such period determined on a consolidated basis in accordance with
GAAP.



     “Consolidated Net Worth” means for the Borrower at any date the sum of (i) the Net
Worth of the Borrower and its Subsidiaries as of such date determined on a consolidated basis in
accordance with GAAP and (ii) the Borrower’s indirect minority interest in Valero, L.P.



     “Consolidated Total Assets” means, at any date, the aggregate total assets of the
Borrower and its Subsidiaries, determined on a consolidated basis as of such date in accordance
with GAAP.



     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.



     “Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such time.



     “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.



     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans or participations in LC Disbursements required to be funded by it hereunder within one
Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.



     “Derivatives Obligations” of any Person means all obligations of such Person in
respect of any Hedging Agreement.



6









 





     “Disclosed Matters” means the actions, suits and proceedings and the environmental and
intellectual property matters (a) disclosed in (i) the Borrower’s report on Form 10-K for the
fiscal year ended December 31, 2004, (ii) the Borrower’s report on Form 10-Q for the fiscal period
ended June 30, 2005, and (iii) the Borrower’s reports on Form 8-K filed during the period from and
including July 1, 2005 to but excluding the date that is two Business Days prior to the Revolving
Effective Date, in each case as filed with the Securities and Exchange Commission, or (b) otherwise
disclosed in writing to the Administrative Agent for the benefit of the Lenders prior to the
execution and delivery of this Agreement. In addition, from and after the Acquisition Effective
Date, the term “Disclosed Matters” shall also include the actions, suits and proceedings and the
environmental and intellectual property matters disclosed in (x) Premcor Inc.’s report on Form 10-K
for the fiscal year ended December 31, 2004, (y) Premcor Inc.’s report on Form 10-Q for the fiscal
period ended June 30, 2005, and (z) Premcor Inc.’s reports on Form 8-K filed during the period from
and including July 1, 2005 to but excluding the date that is two Business Days prior to the
Revolving Effective Date, in each case as filed with the Securities and Exchange Commission.



     “dollars” or “$” refers to lawful money of the United States of America.



     “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Materials or
to health and safety matters.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.



     “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.



7









 





     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.



     “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.



     “Event of Default” has the meaning assigned to such term in Article VII.



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income
and/or net worth by the United States of America, or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office), but only to the extent that such Lender is subject to United
States withholding tax at the time such Lender first becomes party to this Agreement, or is
attributable to such Foreign Lender’s failure to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.17(a) and (d) in the case of each Lender, any United
States withholding tax imposed on any payment made or to be made by the Borrower, but only to the
extent that such Lender is subject to United States withholding tax at the time such Lender first
becomes party to this Agreement.



     “Existing Agreements” means, collectively, (a) the $750,000,000 3-Year Revolving
Credit Agreement dated as of November 21, 2003 among Valero Energy Corporation, JPMorgan Chase
Bank, as administrative agent, Bank of America, N.A., as syndication agent, and the lenders party
thereto and (b) the $750,000,000 5-Year Revolving Credit Agreement dated as of



8









 




December 14, 2001 among Valero Energy Corporation, JPMorgan Chase Bank, as administrative
agent, and the lenders and other agents party thereto, in each case, as heretofore amended,
modified, supplemented or restated.




     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.



     “Financial Officer” means the chief financial officer, principal accounting officer,
financial vice president, treasurer or controller of the Borrower.



     “Fiscal Quarter” means a fiscal quarter of the Borrower, ending on the last day of
March, June, September or December of each year.



     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.



     “GAAP” means generally accepted accounting principles in the United States of America.



     “Global Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
global administrative agent for the Combined Lenders.



     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.



     “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of
business.



9









 





     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Hedging Agreement” means 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, 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.



     “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred in the ordinary course
of business), (d) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed,
provided that the amount of any Indebtedness of such Person which constitutes Indebtedness
of such Person solely by reason of this clause (d) shall not for purposes of this Agreement exceed
the greater of the book value or the fair market value of the properties subject to such Lien, (e)
all Guarantees by such Person of Indebtedness of others, (f) all Capital Lease Obligations of such
Person, (g) all obligations of such Person in respect of bankers’ acceptances, and (h) all
non-contingent obligations (and, for purposes of Section 6.02, 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. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other relationship
with such entity, except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitee” has the meaning set forth in Section 9.03(b).



     “Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the
Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.



     “Information Memorandum” means the Confidential Information Memorandum dated July 2005
relating to the Borrower and the Transactions.



10









 





     “Interest Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.08.



     “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration each day prior to
the last day of such Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.



     “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter (or, with the consent of each
Lender, such other periods for which LIBO Rates are available at the time the Borrowing Request for
such Eurodollar Borrowing is made), as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made, and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.



     “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.



     “ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance of such Letter of Credit).



     “Issuing Bank” means each of JPMorgan Chase Bank, N.A., Bank of America, N.A., BNP
Paribas, Royal Bank of Canada, and Mizuho Corporate Bank, Ltd., in its capacity as an issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i).
In addition, “Issuing Bank” means Citibank, N.A., in its capacity as the issuer of the Letters of
Credit issued by it hereunder described in Section 2.06(k)(ii), and its respective successors in
such capacity as provided in Section 2.06(i). Each Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.



     “LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of
Credit.



11









 





     “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
For purposes of computing the amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.05. For all purposes of
this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such
Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be
drawn.



     “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to Section 2.02 or pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.



     “Letter of Credit” means any letter of credit issued pursuant to this Agreement.



     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.



     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.



     “Loan Documents” means this Agreement and the Notes, if any.



     “Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.



12









 





     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations or condition, financial or otherwise, of the Borrower and the Subsidiaries taken as a
whole, or (b) the ability of the Borrower to perform any of its obligations under this Agreement.



     “Material Indebtedness” means Indebtedness (other than the Loans, Letters of Credit
and Indebtedness that constitutes Project Financing), or obligations in respect of one or more
Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate
principal amount exceeding $100,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.



     “Material Subsidiary” means, at any time, each Subsidiary other than (a) any Project
Financing Subsidiary and (b) any Subsidiary (i) the Net Tangible Assets of which do not represent
5% or more of Consolidated Net Tangible Assets for the period of four fiscal quarters most recently
ended and (ii) that does not own Equity Interests of any Material Subsidiary.



     “Maturity Date” means the fifth anniversary of the Revolving Effective Date.



     “Moody’s” means Moody’s Investors Service, Inc.



     “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.



     “Net Tangible Assets” means, on any date, with respect to any Subsidiary, the
aggregate amount of assets (less applicable accumulated depreciation, depletion and amortization
and other reserves and other properly deductible items) of such Subsidiary, minus (a) all current
liabilities of such Subsidiary (excluding current maturities of long-term debt) and (b) all
goodwill of such Subsidiary, all determined in accordance with GAAP.



     “Net Worth” of the Borrower means at any time, without duplication, the sum of its
capital stock, additional paid in capital, retained earnings, and any other account which, in
accordance with GAAP, constitutes stockholders’ equity, less treasury stock;
provided that “Net Worth” shall not include the liquidation value of any Preferred
Equity Interests.



     “New Funds Amount” has the meaning set forth in Section 2.02(d).



     “Notice of Commitment Increase” has the meaning set forth in Section 2.02(b).



     “Note” has the meaning assigned to such term in Section 2.10(e).



     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.



     “Participant” has the meaning set forth in Section 9.04.



13









 





     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.



     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.



     “Preferred Equity Interest” means any Equity Interest that, by its terms (or the terms
of any security into which it is convertible or for which it is exchangeable) or upon the happening
of any event or circumstance either (a) matures, (b) is redeemable (whether mandatorily or
otherwise) at the option of the holder thereof for any consideration other than shares of common
stock or (c) is convertible or exchangeable for Indebtedness or other Preferred Equity Interests,
in each case, in whole or in part, on or prior to the date that is one year after the earlier of
(i) the Maturity Date or (ii) the date on which the Combined Loans have been paid in full, the
Combined Commitments have terminated, all Letters of Credit have expired or terminated and all LC
Disbursements have been reimbursed.



     “Premcor Credit Agreement” means the $1,000,000,000 Credit Agreement dated as of April
13, 2004 among The Premcor Refining Group Inc., as borrower, Citicorp North America, Inc., as
administrative agent, Fleet National Bank, as syndication agent, Bank One, N.A. and SunTrust Bank,
as co-documentation agents, and the lenders and issuers party thereto, as amended.



     “Premcor Inc.” means Premcor Inc., a Delaware corporation.



     “Pricing Schedule” means the Pricing Schedule attached hereto.



     “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.



     “Project Financing” means any Indebtedness that is incurred to finance or refinance
the acquisition, improvement, installation, design, engineering, construction, development,
completion, maintenance, operation, securitization or monetization, in respect of all or any
portion of any project, any group of projects, or any asset related thereto, and any guaranty with
respect thereto, other than such portion of such Indebtedness or guaranty (contingent or otherwise)
that is at any time recourse to or obligates the Borrower or any Subsidiary (other than a Project
Financing Subsidiary) in any way, or subjects any property or asset of the Borrower or any
Subsidiary (other than a Project Financing Subsidiary), directly or indirectly, contingently or
otherwise, to the satisfaction thereof (excluding any obligation to make a capital contribution to
a Project Financing Subsidiary to the extent not otherwise prohibited hereunder).



14









 





     “Project Financing Subsidiary” means any Subsidiary of the Borrower whose principal
purpose is to incur Project Financing and own and operate its permitted assets or to become a
direct or indirect partner, member or other equity participant or owner in a Person so created, and
substantially all the assets of such Subsidiary are limited to (a) those assets for which the
acquisition, improvement, installation, design, engineering, construction, development, completion,
maintenance, operation, securitization or monetization is being financed in whole or in part by one
or more Project Financings, or (b) the equity in, Indebtedness or other obligations of, one or more
other such Subsidiaries or Persons, or (c) proceeds of a substantially concurrent offering of
capital stock of the Borrower, or assets acquired with such proceeds, or (d) capital contributions
from minority shareholders other than the Borrower or a Subsidiary, or assets acquired with such
capital contributions.



     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and
contract rights.



     “Qualified Issuer” means any commercial bank (a) which has capital and surplus in
excess of $250,000,000 and (b) the outstanding long-term debt securities of which are rated at
least A by Standard & Poor’s Ratings Services or at least A2 by Moody’s Investors Service, Inc., or
carry an equivalent rating by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.



     “Reducing Percentage Lender” has the meaning set forth in Section 2.02(d).



     “Reduction Amount” has the meaning set forth in Section 2.02(d).



     “Register” has the meaning set forth in Section 9.04.



     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.



     “Required Lenders” means, at any time, Lenders having Credit Exposures and unused
Commitments representing more than 50% of the sum of the total Credit Exposures and unused
Commitments at such time.



     “Responsible Officer” means the Chief Executive Officer, President, Executive Vice
President and Chief Administrative Officer, Executive Vice President and Chief Financial Officer,
Executive Vice President and Chief Operating Officer or Chief Legal Officer of the Borrower.



     “Revolving Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).



     “Rolling Period” means any period of four consecutive Fiscal Quarters.



     “S&P” means Standard & Poor’s Rating Services, a division of McGraw-Hill Companies,
Inc.




15











 





     “Securitization Transaction” means any transaction in which the Borrower or a
Subsidiary sells or otherwise transfers any accounts receivable (whether now existing or arising in
the future) and any assets related thereto including, without limitation, all books and records
relating to such accounts receivable, all collateral securing such accounts receivable, all
contracts and all Guarantees or other obligations in respect of such accounts receivable, rights
with respect to returned goods the sale or lease of which gave rise to such accounts receivable,
insurance thereon, proceeds of all of the foregoing and lockboxes and bank accounts into which
collections thereon are deposited, and other assets which are customarily transferred or in respect
of which security interests are customarily granted in connection with asset securitization
transactions involving accounts receivable (a) to one or more third party purchasers or (b) to a
special purpose entity that borrows against such accounts receivable (or undivided interests
therein) and related assets or issues securities payable from (or representing interests in)
payments in respect of such accounts receivable and related assets or sells such accounts
receivable (or undivided interests therein) and related assets to one or more third party
purchasers, but only to the extent that amounts received in connection with the sale or other
transfer of such accounts receivable and related assets to an entity referred to in clause (a) or
(b) above would not under GAAP be accounted for as liabilities on a consolidated balance sheet of
the Borrower. The amount of any Securitization Transaction shall be deemed at any time to be the
aggregate outstanding principal or stated amount of the borrowings, securities or residual
obligations under a sale, in each case referred to in clause (b) of the preceding sentence, or if
there shall be no such principal or stated amount, the uncollected amount of the accounts
receivable transferred to such third party purchaser(s) pursuant to such Securitization Transaction
net of any such accounts receivable that have been written off as uncollectible.



     “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.



     “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent. Notwithstanding
anything to the contrary contained herein, it is understood and agreed that



16









 







Valero L.P. shall not be a subsidiary of the Borrower so long as its accounts are not
consolidated with those of the Borrower in the Borrower’s consolidated financial statements if such
financial statements are prepared in accordance with GAAP.



     “Subsidiary” means any subsidiary of the Borrower.



     “Syndication Agent” means RBC Capital Markets, the global brand name for the
corporation and investment banking businesses of Royal Bank of Canada and its affiliates, in its
capacity as syndication agent for the Lenders hereunder.



     “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.



     “Term Credit Agreement” means the $2,000,000,000 5-Year Term Credit Agreement dated as
of August 17, 2005 among the Borrower, Bank of America, N.A., as administrative agent, and the
lenders and other agents from time to time party thereto, as the same may from time to time be
amended, modified, supplemented or restated.



     “Term Lenders” means the “Lenders” under (and as defined in) the Term Credit
Agreement.



     “Ticking Fee Commencement Date” has the meaning set forth in Section 2.12(d).



     “Ticking Fee Termination Date” has the meaning set forth in Section 2.12(d).



     “Transactions” means the execution, delivery and performance by the Borrower of the
Loan Documents, the borrowing of Loans, and the issuance of Letters of Credit hereunder.



     “Transfer” means, with respect to any assets or property, any sale, lease, transfer or
other disposition thereof.



     “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.



     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.



     Section 1.02 Classification of Loans and Borrowings. For purposes of this Agreement, Loans
may be classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings
also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).



     Section 1.03 Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word



17









 




“shall”. Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.




     Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect
from time to time; provided that, if the Borrower notifies the Administrative Agent that
the Borrower requests an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then such provision shall
be interpreted on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in
accordance herewith.



     Section 1.05 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a
Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any Letter of Credit that, by its
terms, provides for one or more automatic increases in the stated amount thereof, the amount of
such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated amount is in effect
at such time.



ARTICLE II

The Credits




     Section 2.01 Commitments. Subject to the terms and conditions set forth herein, each
Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (a) such Lender’s Credit Exposure exceeding such
Lender’s Commitment or (b) the sum of the total Credit Exposures exceeding the total Commitments.
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Loans.



     Section 2.02 Commitment Increase.



          (a) Subject to the terms and conditions set forth herein, the Borrower shall have the right,
without the consent of the Lenders, to cause, but no more than five times, an



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increase in the Commitments of the Lenders (a “Commitment Increase”) by adding to this
Agreement one or more additional lenders that are not already Lenders hereunder and that are
reasonably satisfactory to the Administrative Agent and each Issuing Bank (each, a “CI
Lender”) or by allowing one or more existing Lenders to increase their respective Commitments;
provided that (i) no Event of Default shall have occurred and be continuing as of the
relevant Commitment Increase Effective Date, (ii) no such Commitment Increase shall be less than
$50,000,000, (iii) the aggregate amount of all such Commitment Increases shall not exceed
$500,000,000, (iv) no Lender’s Commitment shall be increased without such Lender’s prior written
consent (which consent may be given or withheld in such Lender’s sole and absolute discretion) and
(v) if, on the effective date of such increase, any Loans have been funded, then the Borrower shall
be obligated to pay any breakage fees or costs that are payable pursuant to Section 2.16 in
connection with the reallocation of such outstanding Loans.




          (b) The Borrower shall provide the Administrative Agent with written notice (a “Notice of
Commitment Increase”) in the form of Exhibit B attached hereto of its intention to increase the
Commitments pursuant to this Section 2.02. Each such Notice of Commitment Increase shall specify
(i) the proposed effective date of such Commitment Increase (each such date, a “Commitment
Increase Effective Date”), which date shall be no earlier than five (5) Business Days after
receipt by the Administrative Agent of such Notice of Commitment Increase, (ii) the amount of the
requested Commitment Increase (provided that after giving effect to such requested
Commitment Increase, the aggregate amount of all Commitment Increases does not exceed the amount
set forth in subsection (a)(iii) above), (iii) the identity of each CI Lender or Lender that has
agreed in writing to increase its Commitment hereunder, and (iv) the amount of the respective
Commitments of the then existing Lenders and the CI Lenders from and after the Commitment Increase
Effective Date (as defined below).




          (c) On each Commitment Increase Effective Date, to the extent that there are Loans outstanding
as of such date, (i) each CI Lender shall, by wire transfer of immediately available funds, deliver
to the Administrative Agent such CI Lender’s New Funds Amount, which amount, for each such CI
Lender, shall constitute Loans made by such CI Lender to the Borrower pursuant to this Agreement on
such Commitment Increase Effective Date, (ii) each existing Lender that has agreed to increase its
Commitment shall, by wire transfer of immediately available funds, deliver to the Administrative
Agent such Lender’s New Funds Amount, which amount, for each such Lender, shall constitute Loans
made by such Lender to the Borrower pursuant to this Agreement on such Commitment Increase
Effective Date, (iii) the Administrative Agent shall, by wire transfer of immediately available
funds, pay to each then Reducing Percentage Lender its Reduction Amount, which amount, for each
such Reducing Percentage Lender, shall constitute a prepayment by the Borrower pursuant to Section
2.11, ratably in accordance with the respective principal amounts thereof, of the principal amounts
of all then outstanding Loans of such Reducing Percentage Lender, and (iv) the Borrower shall be
responsible to pay to each Lender any breakage fees or costs that are payable pursuant to Section
2.16 in connection with the reallocation of any outstanding Loans.




          (d) For purposes of this Section 2.02 and Exhibit B, the following defined terms shall have
the following meanings: (i) “New Funds Amount” means the amount equal to the product of a
Lender’s increased Commitment or a CI Lender’s Commitment (as applicable) represented as a
percentage of the aggregate Commitments after giving effect to any



19









 






Commitment Increase, times the aggregate principal amount of the outstanding Loans immediately
prior to giving effect to such Commitment Increase, if any, as of any Commitment Increase Effective
Date (without regard to any increase in the aggregate principal amount of Loans as a result of
borrowings made after giving effect to such Commitment Increase on such Commitment Increase
Effective Date); (ii) “Reducing Percentage Lender” means each then existing Lender
immediately prior to giving effect to any Commitment Increase that does not increase its respective
Commitment as a result of such Commitment Increase and whose relative percentage of the Commitments
shall be reduced after giving effect to such Commitment Increase; and (iii) “Reduction
Amount” means the amount by which a Reducing Percentage Lender’s outstanding Loans decrease as
of any Commitment Increase Effective Date (without regard to the effect of any borrowings made on
such Commitment Increase Effective Date after giving effect to the Commitment Increase occurring on
such Commitment Increase Effective Date).




          (e) Each Commitment Increase shall become effective on its Commitment Increase Effective Date
and upon such effectiveness (i) the Administrative Agent shall record in the register each then CI
Lender’s information as provided in the applicable Notice of Commitment Increase and pursuant to an
Administrative Questionnaire that shall be executed and delivered by each CI Lender to the
Administrative Agent on or before such Commitment Increase Effective Date, (ii) Schedule 2.01
hereof shall be amended and restated to set forth all Lenders (including any CI Lenders) that will
be Lenders hereunder after giving effect to such Commitment Increase (which amended and restated
Schedule 2.01 shall be set forth in Annex I to the applicable Notice of Commitment Increase) and
the Administrative Agent shall distribute to each Lender (including each CI Lender) a copy of such
amended and restated Schedule 2.01, and (iii) each CI Lender identified on the Notice of Commitment
Increase for such Commitment Increase shall be a “Lender” for all purposes under this Agreement.




          (f) Each Commitment Increase shall be deemed to constitute a representation and warranty by
the Borrower on the applicable Commitment Increase Effective Date that (i) the representations and
warranties of the Borrower set forth in this Agreement and in the other Loan Documents are true and
correct on and as of such Commitment Increase Effective Date, except to the extent any such
representations and warranties are expressly limited to an earlier date, in which case, on and as
of such Commitment Increase Effective Date, such representations and warranties shall continue to
be true and correct as of such specified earlier date, and (ii) at the time of and immediately
after giving effect to such Commitment Increase, no Default shall have occurred and be continuing.




     Section 2.03 Acquisition Effective Date Commitment Increase. On the Acquisition Effective
Date, the Commitment of each Lender, without any further action, shall automatically be increased
by the amount specified for such Lender on Schedule 2.03 (which increases shall total
$1,000,000,000 in the aggregate for all Lenders). Upon such increase, Schedule 2.01 shall be
automatically amended and restated to set forth the Commitment of each Lender hereunder after
giving effect to such increase and the Administrative Agent shall promptly distribute to the
Borrower and each Lender a copy of such amended and restated Schedule 2.01.



     Section 2.04 Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their respective



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Commitments. The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.



          (b) Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this Agreement.




          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $1,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of
the total Commitments or that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e). Borrowings of more than one Type may be outstanding at the same
time; provided that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.




          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.




     Section 2.05 Requests for Borrowings. To request a Borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 12:00 p.m., New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 p.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Borrowing Request in substantially the form of Exhibit C. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with Section 2.04:



               (i) the aggregate amount of the requested Borrowing;



               (ii) the date of such Borrowing, which shall be a Business Day;



               (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;



               (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and



21









 





               (v) the location and number of the Borrower’s account to which funds are to be disbursed,
which shall comply with the requirements of Section 2.07(a).


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a telephonic or written Borrowing Request in accordance
with this Section, the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender’s Loan to be made as part of the requested Borrowing.




     Section 2.06 Letters of Credit.



          (a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of dollar-denominated, standby Letters of Credit, in a form reasonably
acceptable to the Administrative Agent and the relevant Issuing Bank, at any time and from time to
time during the Availability Period; provided that the aggregate LC Exposure shall not exceed the
lesser of (i) the total Commitments (not to exceed $2,500,000,000) or (ii) the excess of the total
Commitments (not to exceed $2,500,000,000) over the aggregate amount of the Loans then outstanding;
and provided further that, subject to limitations set forth above, no Issuing Bank shall be
obligated to front Letters of Credit to extent that the LC Exposure associated with Letters of
Credit issued by it would exceed the lesser of (A) an amount equal to one-fifth of the total
Commitments (not to exceed $2,500,000,000) and (B) $500,000,000 (it being understood that, as to
Bank of America, N.A., as Issuing Bank, the LC Exposure associated with Letters of Credit deemed
issued by it pursuant to Section 2.06(k)(ii) shall be taken into account for the purpose of such
$500,000,000 limit, but such $500,000,000 limit shall not be deemed exceeded as a result of the
deemed issuance of such Letters of Credit by it pursuant to Section 2.06(k)(ii) to the extent that
the LC Exposure associated with such Letters of Credit exceeds $500,000,000). In the event of any
inconsistency between the terms and conditions of this Agreement and the terms and conditions of
any form of letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the relevant Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.




          (b) Notice of Issuance, Amendment, Extension; Certain Conditions. To request the
issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit),
the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to the relevant Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date of issuance,
amendment or extension) a notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended or extended, and specifying the date of issuance, amendment or
extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit (which
must be a fixed amount), the name and address of the beneficiary thereof and such other information
as shall be necessary to prepare, amend or extend such Letter of Credit. If requested by the
relevant Issuing Bank, the Borrower also shall submit a letter of credit application on its
standard form in connection with any request for a Letter of Credit; provided that no provision in
such application shall be deemed effective to the extent such



22









 






provision contains, provides for, or requires, representations, warranties, covenants,
security interests, Liens, indemnities, reimbursements of costs or expenses, events of default,
remedies, or standards of care or to the extent such provision conflicts or is inconsistent with
this Agreement (provided that, for the avoidance of doubt, nothing in this sentence shall be
construed to relieve any account party in respect of any Letter of Credit deemed issued pursuant to
Section 2.06(k)(ii) of its reimbursement obligations under any letter of credit application or
other agreement related thereto). Following receipt of a notice requesting the issuance of a
Letter of Credit (or the amendment or extension of an outstanding Letter of Credit) in accordance
with this Section, the Administrative Agent shall advise each Lender of the details thereof. A
Letter of Credit shall be issued, amended or extended only if (and upon issuance, amendment or
extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment or extension, (i) the LC Exposure shall not exceed
the total Commitments (not to exceed $2,500,000,000) and (ii) the total Credit Exposures shall not
exceed the total Commitments. Notwithstanding the foregoing or anything else to the contrary
contained herein, no Issuing Bank shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any law
applicable to such Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuing Bank (x) shall prohibit,
or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular, (y) shall impose upon such Issuing Bank with respect to such Letter
of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not
otherwise compensated hereunder) not in effect on the Revolving Effective Date, or (z) shall impose
upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the
Revolving Effective Date and which such Issuing Bank in good faith deems material to it;
provided that, in the cases of clauses (y) and (z), such Issuing Bank shall have provided
written notice to the Borrower of its refusal to issue any Letter of Credit and the specific
reasons therefor and the Borrower shall not have compensated such Issuing Bank for the imposition
of such restriction, reserve or capital requirement or reimbursed such Issuing Bank for such loss,
cost or expense, as applicable; (B) the issuance of such Letter of Credit would violate one or more
polices of such Issuing Bank (as consistently applied); or (C) such Letter of Credit is to be
denominated in a currency other than dollars.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.




          (d) Participation. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the part of the Issuing
Bank that issues such Letter of Credit or the Lenders, such Issuing Bank hereby grants to each
Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of
the relevant Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such
Issuing Bank and not reimbursed by the Borrower on the date due as



23









 






provided in paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute
and unconditional and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit in accordance with this Agreement or the
occurrence and continuance of a Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.




          (e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 2:00 p.m., New York City time, on the
date that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 2:00 p.m., New York
City time, on (i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 11:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that, if such LC Disbursement is not
less than $1,000,000, the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.05 that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment
shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to
the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts so received by it
from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the
relevant Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph
to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as its interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse an Issuing Bank for
any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.




          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any



24









 






Issuing Bank under a Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of any Issuing Bank;
provided that the foregoing shall not be construed to excuse the relevant Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.




          (g) Disbursement Procedures. The relevant Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for payment under a Letter
of Credit. The relevant Issuing Bank shall promptly notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and whether it has made or
will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the
Lenders with respect to any such LC Disbursement.




          (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless
the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the
relevant Issuing Bank, except that interest accrued on and after the date of payment by a Lender
pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account
of such Lender to the extent of such payment.




25









 








          (i) Replacement of an Issuing Bank. An Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(c). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank”
shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to issue additional
Letters of Credit.




          (j) Cash Collateralization. If any Event of Default shall occur and be continuing,
then on the Business Day that the Borrower receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposures
representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest and fees thereon; provided
that the obligation to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i)
of Article VII. As collateral security for the payment and performance of the obligations of the
Borrower under this Agreement, the Borrower hereby grants to the Administrative Agent, for the
benefit of each Issuing Bank and the Lenders, a first priority security interest in such account
and all amounts and other property from time to time deposited or held in such account, and all
proceeds thereof, and any substitutions and replacements therefor. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse ratably the Issuing Banks for LC Disbursements for which they
have not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of
the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of
the Borrower under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.




          (k) Outstanding Letters of Credit.




26









 








               (i) On the Revolving Effective Date, each of the letters of credit listed on Schedule 2.06
shall be deemed to have been issued as Letters of Credit under this Agreement by the Issuing Bank
specified on Schedule 2.06, without payment of any fees otherwise due upon the issuance of a Letter
of Credit, and such Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each Lender, and each Lender shall be deemed, without further action by any party
hereto, to have purchased from such Issuing Bank, a participation, to the extent of such Lender’s
Applicable Percentage, in such Letter of Credit.



               (ii) On the Acquisition Effective Date, the letters of credit issued by Bank of America, N.A.
and/or Bank of America, N.A., as successor by merger to Fleet National Bank, and Citibank, N.A.,
that are outstanding on the Acquisition Effective Date and specified in the certificate delivered
by the Borrower pursuant to Section 4.02(f) shall be deemed to have been issued as Letters of
Credit under this Agreement by Bank of America, N.A., as Issuing Bank, or Citibank, N.A., as
Issuing Bank, as applicable, without payment of any fees otherwise due upon the issuance of a
Letter of Credit, and each such Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any
party hereto, to have purchased from such Issuing Bank, a participation, to the extent of such
Lender’s Applicable Percentage, in such Letter of Credit. The Borrower covenants and agrees to
cause the Letters of Credit deemed issued by Citibank, N.A. pursuant to this Section 2.06(k)(ii) to
be cancelled, terminated or replaced no later than 90 days after the Acquisition Effective Date.



     Section 2.07 Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00
p.m., New York City time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the
Borrower designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans
made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the relevant Issuing Bank.



          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to such Borrowing. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Loan included in such Borrowing.




27









 








     Section 2.08 Interest Elections. (a) Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.



          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.05 if the Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.




          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.04:




               (i) the Borrowing to which such Interest Election Request applies and, if different options
are being elected with respect to different portions thereof, the portions thereof to be allocated
to each resulting Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);



               (ii) the effective date of the election made pursuant to such Interest Election Request, which
shall be a Business Day;



               (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and



               (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period contemplated by
the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.




          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision



28









 






hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.




     Section 2.09 Termination and Reduction of Commitments. (a) Unless previously terminated,
the Commitments shall terminate on the Maturity Date.



          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.11, the sum of the Credit Exposures would exceed the total
Commitments.




          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon the occurrence of identified events, in
which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments shall be permanent and may not be reinstated except pursuant to
Section 2.02. Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.




     Section 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Maturity Date.



          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.




          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the



29









 






obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and otherwise substantially in the form of Exhibit D hereto (a “Note”).
Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).




     Section 2.11 Prepayment of Loans. (a) The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.



          (b) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than
12:00 p.m., New York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Borrowing, not later than 12:00 p.m., New York City time, on the date
of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such
notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any ABR Borrowing shall be in a minimum amount of
$1,000,000 with additional increments of $1,000,000. Each partial prepayment of any Eurodollar
Borrowing shall be in a minimum amount of $5,000,000 with additional increments of $1,000,000.
Each prepayment of any Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section
2.13 and any break funding costs pursuant to Section 2.16.




     Section 2.12 Fees. (a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily
amount of the Commitment of such Lender (whether used or unused) during the period from and
including the Revolving Effective Date to but excluding the date on which such Commitment
terminates; provided that, if such Lender continues to have any Credit Exposure after its
Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such
Lender’s Credit Exposure from and including the date on which its Commitment terminates to but
excluding the date on which such Lender ceases to have any Credit Exposure. Accrued facility fees
shall be payable in arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such date to occur after
the date hereof; provided that any facility fees accruing after the date on which the
Commitments terminate shall be payable on demand. All facility fees shall be



30









 




computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).




          (b) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a
utilization fee which shall accrue at a per annum rate equal to 0.125% on the daily amount of such
Lender’s Credit Exposure during the time the sum of the total Credit Exposures equals or exceeds
50% of the total Commitments. Utilization fees shall be computed on the basis of a year of 360 days
and shall be payable in arrears on the last day of March, June, September and December of each
year.




          (c) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender
a participation fee with respect to such Lender’s participations in Letters of Credit, which shall
accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar
Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the Revolving
Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates
and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount
(except in the case of Letters of Credit issued by Bank of America, N.A., as Issuing Bank, which
rate shall accrue on the daily amount) of the LC Exposure associated with Letters of Credit issued
by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Revolving Effective Date to but excluding the later of the
date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as
well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder. Participation fees and
fronting fees accrued through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Revolving Effective Date; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees payable to any Issuing
Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day).




          (d) If the Acquisition Effective Date has not occurred on or prior to the date that is sixty
(60) days after the Revolving Effective Date (such date, the “Ticking Fee Commencement
Date”), then the Borrower agrees to pay to the Administrative Agent for the account of each
Lender a ticking fee, which shall accrue on such Lender’s “Commitment Increase Amount” as specified
on Schedule 2.03, at a rate per annum equal to one-half of the rate per annum set forth on the
Pricing Schedule under the caption “Facility Fee”, based upon the ratings by Moody’s and S&P,
respectively, applicable on the Ticking Fee Commencement Date to the Index Debt, during the period
from and including the Ticking Fee Commencement Date to but excluding the earliest to occur of (i)
the Acquisition Effective Date, (ii) the date on which the Borrower delivers written notice to the
Administrative Agent that the Acquisition will not be consummated or (iii) January 31, 2006 (such
earliest date, the “Ticking Fee Termination Date”). Accrued ticking fees shall be payable
in arrears on the Ticking Fee Termination Date. All



31









 






ticking fees shall be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last).




          (e) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.




          (f) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to each Issuing Bank, in the case of fees payable to it) for
distribution, in the case of facility fees, utilization fees and participation fees, to the
Lenders. Fees payable that have been paid shall not be refundable under any circumstances.




     Section 2.13 Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Rate.



          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.




          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.




          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.




          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination shall be conclusive
absent manifest error.




     Section 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:



32









 





          (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period; or




          (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or
the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in such Borrowing for such
Interest Period;



then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect only one
Type of Borrowings, then the other Type of Borrowings shall be permitted.




     Section 2.15 Increased Costs. (a) If any Change in Law shall:



               (i) impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by, any Lender (except
any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or



               (ii) impose on any Lender or any Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein (excluding for purposes of this subsection (ii) any Indemnified Taxes or
Other Taxes as to which Section 2.17 shall apply);


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
such Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.




          (b) If any Lender or any Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or such
Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company,
if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below
that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or such
Issuing Bank’s policies and the policies of such Lender’s



33









 






or such Issuing Bank’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company for any such reduction suffered.




          (c) A certificate of a Lender or an Issuing Bank setting forth in reasonable detail the basis
for, the calculation of and the amount or amounts necessary to compensate such Lender or such
Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay to such Lender or such Issuing Bank, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof. In determining such amount, such
Lender agrees to act in good faith and to use reasonable averaging and attribution methods.




          (d) Failure or delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s
right to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above shall be extended to include
the period of retroactive effect thereof.




     Section 2.16 Break Funding Payments. In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(b) and is revoked in accordance therewith),
or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any
such event, the Borrower shall compensate each Lender (other than, in the case of a claim for
compensation based on the failure to borrow as specified in clause (c) above, any Lender whose
failure to make a Loan required to be made by it hereunder has resulted in such failure to borrow)
for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender
to be the excess, if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for
the period that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A certificate of any
Lender setting forth in reasonable detail the basis for and



34









 







any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.



     Section 2.17 Taxes. (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (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) the Administrative Agent, Lender or Issuing Bank (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 and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.



          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) The Borrower shall indemnify the Administrative Agent, each Lender, and each Issuing Bank,
within 15 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender, or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in
reasonable detail the basis for and the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.




          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.




          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction(s) in which the Borrower is located, or any treaty to which such
jurisdiction(s) is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a
reduced rate.




35









 








          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it
shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower or any other Person.




     Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The
Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
Section 2.16 or Section 2.17, or otherwise) prior to 2:00 p.m., New York City time, on the date
when due, in immediately available funds, without deduction, set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park
Avenue, New York, New York, except payments to be made directly to each Issuing Bank as expressly
provided herein and except that payments pursuant to Section 2.15, Section 2.16, Section 2.17 and
Section 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on
a day that is not a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments hereunder shall be made in dollars.



          (b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements then due to such parties.




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and



36









 






accrued interest thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans and participations
in LC Disbursements; provided that (i)if any such participations are purchased and all or
any portion of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a participation in any of
its Loans or participations in LC Disbursements to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.




          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Banks hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Banks, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Banks, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.06(d) or (e), Section 2.07(b), Section 2.18(d) or Section 9.03(c), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.




     Section 2.19 Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then
such Lender shall use reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or Section



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2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.




          (b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender is a Defaulting Lender, or if any Lender fails to
execute and deliver any amendment, consent or waiver to any Loan Document requested by the Borrower
by the date specified by the Borrower (or gives the Borrower or the Administrative Agent written
notice prior to such date of its intention not to do so), or if any Lender delivers a notice to the
Borrower and/or the Administrative Agent pursuant to Section 2.20, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Commitment is being assigned, each Issuing
Bank), which consent (or consents) shall not unreasonably be withheld or delayed, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee or the Borrower, as applicable, and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments.




     Section 2.20 Illegality. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for any Lender or its applicable lending office to honor its
obligation to make or maintain Eurodollar Loans either generally or having a particular Interest
Period hereunder, then (a) such Lender shall promptly notify the Borrower and the Administrative
Agent thereof and such Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain such
Eurodollar Loans and (b) all Affected Loans which would otherwise be made by such Lender shall be
made instead as ABR Loans (and, if such Lender so requests by notice to the Borrower and the
Administrative Agent, all Affected Loans of such Lender then outstanding shall be automatically
converted into ABR Loans on the date specified by such Lender in such notice) and, to the extent
that Affected Loans are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied instead to its ABR
Loans.



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ARTICLE III

Representations and Warranties




          The Borrower represents and warrants to the Lenders that:




     Section 3.01 Organization; Powers. Each of the Borrower and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and
is qualified to do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.



     Section 3.02 Authorization; Enforceability. The Transactions are within the Borrower’s
corporate powers and have been duly authorized by all necessary corporate and, if required,
stockholder action. The Loan Documents have been duly executed and delivered by the Borrower and
constitute legal, valid and binding obligations of the Borrower, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.



     Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not require the
Borrower or any Subsidiary to obtain any consent or approval of, or make any registration or filing
with, or request any other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect (except for any reports required to be filed by the
Borrower with the Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934), (b) will not result in a violation by the Borrower or any Subsidiary of any law or
regulation or the charter, by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to require any material
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.



     Section 3.04 Financial Condition. The Borrower has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholder’s equity and cash flows (i) as of
and for the fiscal year ended December 31, 2004, reported on by KPMG LLP, independent public
accountants, and (ii) as of and for the Fiscal Quarter and the portion of the fiscal year ended
June 30, 2005, certified by its chief financial officer. Such financial statements present fairly,
in all material respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.



     Section 3.05 Environmental Matters. Except for the Disclosed Matters and except with
respect to any other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries



39









 




(a) has failed to comply with any applicable Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any applicable Environmental Law, (b) has
become subject to any Environmental Liability, (c) has received notice of any claim with respect to
any Environmental Liability or (d) knows of any basis for any Environmental Liability.




     Section 3.06 No Default. No Default has occurred and is continuing.



     Section 3.07 Investment and Holding Company Status. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended or (b) a “holding company” as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended.



     Section 3.08 Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good
faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in a Material Adverse
Effect.



     Section 3.09 ERISA. Each ERISA Affiliate has fulfilled its obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code with respect to
each Plan. No ERISA Affiliate has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any contribution or payment to
any Plan or Multiemployer 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 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 3.10 Disclosure. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other written information furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other written information so
furnished) contained as of the date such reports, financial statements, certificates or other
written information were so furnished, any untrue statement of a material fact or omitted to state
any material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that, with respect to (i) projections, estimates,
pro forma financial information, engineering reports and forward-looking statements (within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934) contained in the materials referenced above, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be reasonable at the
time, (ii) financial statements, the Borrower represents only that such financial statements were
prepared as represented in Section 3.04 and as required by Sections 5.01(a) and (b), as applicable,
and (iii) prior to the Acquisition Effective Date, no
representation is made as to (x) information prepared by or on behalf of Premcor Inc. or (y) any
information that is necessarily based upon such information provided by or on behalf of Premcor
Inc.



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ARTICLE IV

Conditions




     Section 4.01 Revolving Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):



          (a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of this Agreement.




          (b) The Administrative Agent shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Revolving Effective Date) of (i) Jay Browning,
in-house counsel of the Borrower, providing the opinions set forth in Exhibit E and (ii) Baker
Botts L.L.P., counsel for the Borrower, providing the opinions set forth in Exhibit F, and each
such opinion covering such other matters relating to the Borrower or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests each such counsel to
deliver its applicable opinion to the Administrative Agent and the Lenders.




          (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any other legal matters
relating to the Borrower, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent.




          (d) The Administrative Agent shall have received the financial statements referred to in
Section 3.04.




          (e) The Administrative Agent shall have received a certificate, dated the Revolving Effective
Date and signed by a Responsible Officer of the Borrower, certifying (which statements shall
constitute a representation and warranty made by the Borrower to the Lenders hereunder on the
Revolving Effective Date) that, as of the Revolving Effective Date, (i) there are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Responsible Officer of the Borrower, threatened against or affecting the Borrower
or any of its Subsidiaries (A) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or
(B) that involve the Loan Documents or the Transactions; and (ii) since December 31, 2004, there
has been no material adverse change in the business, financial
position, or results of operations of the Borrower together with its Subsidiaries on a
consolidated basis.




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          (f) The Administrative Agent shall have received a certificate, dated the Revolving Effective
Date and signed by a Responsible Officer of the Borrower, confirming compliance, as of the
Revolving Effective Date, with the conditions set forth in paragraphs (a) and (b) of Section 4.03.




          (g) The Administrative Agent shall have received all fees and other amounts due and payable on
or prior to the Revolving Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.




          (h) The Administrative Agent shall have received evidence satisfactory to it that all
outstanding obligations owing pursuant to the Existing Agreements shall have been or are
concurrently being repaid in full, and all commitments thereunder shall have been or are
concurrently being terminated.



The Administrative Agent shall notify the Borrower and the Lenders of the Revolving Effective Date,
and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of
the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions contained in this Section 4.01 is
satisfied (or waived pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
October 1, 2005 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).




     Section 4.02 Acquisition Effective Date. The Commitment increase referred to in Section
2.03 shall not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):



          (a) The Administrative Agent shall have received evidence satisfactory to it that the
Acquisition has been or is being concurrently consummated substantially in accordance with the
terms of the Acquisition Document (with all of the material conditions precedent thereto having
been satisfied in all material respects by the parties thereto other than as consented to by the
Lenders).




          (b) The Administrative Agent shall have received a certificate of the President or a Vice
President of the Borrower certifying (which statements shall constitute a representation and
warranty made by the Borrower to the Lenders hereunder on the Acquisition Effective Date) as of the
Acquisition Effective Date: (A) that the Acquisition has been or is concurrently being consummated
substantially in accordance with the terms of the Acquisition Document (with all of the material
conditions precedent thereto having been satisfied in all material respects by the parties thereto
other than as consented to by the Lenders); and (B) that attached thereto is a true and complete
executed copy of the Acquisition Document (including all exhibits, schedules and supplements) and
that the Acquisition Document has not been amended since April 24, 2005 in any material respect
except as otherwise consented to by the Administrative Agent and the Lenders (which consent will
not be unreasonably withheld).




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          (c) The Administrative Agent shall have received a certificate, dated the Acquisition
Effective Date and signed by a Responsible Officer of the Borrower, certifying (which statements
shall constitute a representation and warranty made by the Borrower to the Lenders hereunder on the
Acquisition Effective Date), as of the Acquisition Effective Date, that (i) there are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to
the knowledge of any Responsible Officer of the Borrower, threatened against or affecting the
Borrower or any of its Subsidiaries (A) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or
(B) that involve the Loan Documents or the Transactions; and (ii) since December 31, 2004, there
has been no material adverse change in the business, financial position, or results of operations
of the Borrower together with its Subsidiaries on a consolidated basis (provided that, with
respect to Premcor Inc. and its subsidiaries, the Borrower certifies, represents and warrants only
as to its knowledge).




          (d) The Administrative Agent shall have received (i) the consolidated balance sheet and
statements of income, stockholder’s equity and cash flows of Premcor Inc. (A) as of and for the
fiscal year ended December 31, 2004, reported on by Deloitte & Touche LLP, independent public
accountants, and (B) as of and for the fiscal quarter and the portion of the fiscal year ended June
30, 2005, certified by its chief financial officer; (ii) the selected unaudited pro forma condensed
combined financial data set forth in the joint proxy statement/prospectus included in the
Registration Statement on Form S-4 filed with the Securities and Exchange Commission on May 19,
2005 in connection with the Acquisition; and (iii) a certificate, dated the Acquisition Effective
Date and signed by a Responsible Officer of the Borrower, certifying (which statements shall
constitute a representation and warranty made by the Borrower to the Lenders hereunder) that the
financial statements referred to in clause (i) above present fairly, in all material respects, the
financial position and results of operations and cash flows of Premcor Inc. and its consolidated
subsidiaries as of the dates and for the periods referred to in such clause (i) in accordance with
GAAP, subject to year-end audit adjustments and the absence of footnotes. It is understood that,
with respect to the financial data referred to in clause (ii) above, (A) such financial data was
prepared for illustrative purposes only and is based on available information and assumptions that
are believed to be reasonable as of the Revolving Effective Date, (B) the financial results
reflected in such financial data may have been different had the Borrower and Premcor Inc. always
been combined due to certain factors, (C) the unaudited pro forma combined statements of income do
not reflect anticipated synergies or costs and charges that may result from the Acquisition, (D)
such pro forma financial information does not reflect any actions the Borrower and Premcor Inc. may
be required to take in connection with obtaining the necessary regulatory approvals for the
Acquisition, and (E) such financial data should not be relied upon as being indicative of the
historical results that would have been achieved had the Borrower and Premcor Inc. always been
combined or the future results that the Borrower will experience after the Acquisition Effective
Date.




          (e) The Administrative Agent shall have received a certificate, dated the Acquisition
Effective Date and signed by a Responsible Officer of the Borrower, confirming compliance, as of
the Acquisition Effective Date, with the conditions set forth in paragraphs (a) and (b) of Section
4.03.




43









 








          (f) The Administrative Agent shall have received (i) evidence satisfactory to it that all
outstanding obligations owing pursuant to the Premcor Credit Agreement shall have been or are
concurrently being repaid in full, and all commitments thereunder shall have been or are
concurrently being terminated and (ii) a certificate, satisfactory to the Administrative Agent,
Bank of America, N.A. and Citibank N.A., dated the Acquisition Date, and signed by a Responsible
Officer, setting forth all outstanding letters of credit on the Acquisition Effective Date that are
to be issued hereunder pursuant to Section 2.06(k)(ii) (including the name of the applicable
Issuing Bank, the letter of credit reference number, the issue date, the expiration date, the
amount thereof, the name of the beneficiary, and such other pertinent information as the
Administrative Agent may reasonably require).



The Administrative Agent shall notify the Borrower and the Lenders of the Acquisition Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the
Commitment increase referred to in Section 2.03 shall not become effective unless each of the
foregoing conditions contained in this Section 4.02 is satisfied (or waived pursuant to Section
9.02) at or prior to 5:00 p.m., New York City time, on January 31, 2006 (and, in the event such
conditions are not so satisfied or waived, the availability of the Commitment increase referred to
in Section 2.03 shall terminate at such time).




     Section 4.03 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of each Issuing Bank to issue, amend or extend any Letter of Credit,
is subject to the satisfaction of the following conditions:



          (a) The representations and warranties of the Borrower set forth in this Agreement and in the
other Loan Documents shall be true and correct on and as of the date of such Borrowing or the date
of issuance, amendment or extension of such Letter of Credit, as applicable, except to the extent
any such representations and warranties are expressly limited to an earlier date, in which case, on
and as of the date of such Borrowing or the date of issuance, amendment or extension of such Letter
of Credit, as applicable, such representations and warranties shall continue to be true and correct
as of such specified earlier date.




          (b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment or extension of such Letter of Credit, as applicable, no Default shall have occurred and
be continuing.




          (c) The Administrative Agent shall have received a Borrowing Request in accordance with
Section 2.05.



Each Borrowing and each issuance, amendment or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.




ARTICLE V

Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters
of Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders that:




44









 








     Section 5.01 Financial Statements and Other Information. The Borrower will furnish to the
Administrative Agent:



          (a) within 65 days after the end of each fiscal year of the Borrower, its audited consolidated
balance sheet and related statements of income, stockholders’ equity and cash flows as of the end
of and for such year, setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by KPMG LLP or other independent public accountants of recognized
national standing (without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, except for deviations from the application of GAAP concurred with
by the Borrower’s independent public accountants;




          (b) within 45 days after the end of each of the first three Fiscal Quarters of each fiscal
year of the Borrower, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
except for deviations from the application of GAAP concurred with by the Borrower’s independent
public accountants, subject to normal year-end audit adjustments and the absence of footnotes;




          (c) concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has
occurred and is continuing and, if a Default has occurred and is continuing, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, and (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section 6.01 and Section 6.07;




          (d) promptly after the same become publicly available, notice of all registration statements
or reports filed by the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said Commission, on Form
S-1, S-3, S-4, 10-K, 10-Q, 8-K or 12b-25, and notice of any financial statements, reports, notices
or proxy statements distributed by the Borrower to its shareholders generally, as the case may be;
and




          (e) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender through the Administrative Agent
may reasonably request.




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Documents required to be delivered pursuant to Section 5.01(a), Section 5.01(b) or Section 5.01(d)
(to the extent any such documents are included in materials otherwise filed with the Securities and
Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower’s website on the Internet at www.valero.com; or (ii) on which such
documents are posted on the Borrower’s behalf on the website of the Securities and Exchange
Commission or any other Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that the Borrower shall notify the Administrative
Agent, which shall then promptly notify each Lender (by telecopier or electronic mail) of the
posting of any such documents, and the Borrower shall provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to provide paper copies
of the compliance certificate required by Section 5.01(c) to the Administrative Agent, which shall
then promptly furnish such compliance certificate to the Lenders. Except for such compliance
certificates, the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of such documents.




     Section 5.02 Notices of Material Events. The Borrower will furnish to the Administrative
Agent, which shall then promptly furnish to each Lender, prompt written notice of the following:



          (a) the occurrence of any Default of which any Responsible Officer of the Borrower obtains
knowledge; and




          (b) if and when any ERISA Affiliate (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 Multiemployer 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 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



46









 






Borrower setting forth details as to such occurrence and action, if any, which the Borrower or
applicable ERISA Affiliate is required or proposes to take.



Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.




     Section 5.03 Existence; Conduct of Business. The Borrower will, and will cause each of its
Material Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises necessary or desirable in the normal conduct of its business; provided that the
foregoing shall not prohibit any merger or consolidation of the Borrower permitted under
Section 6.03 or any merger, consolidation, liquidation or dissolution of any Subsidiary that is not
otherwise prohibited by the terms of this Agreement; and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to preserve, renew or keep in
full force and effect any right, license, permit, privilege or franchise to the extent that the
failure to do so would not reasonably be expected to have a Material Adverse Effect.



     Section 5.04 Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay or discharge, before the same shall become delinquent or in default, its
obligations, including liabilities for Taxes, that, if not paid, could reasonably be expected to
result in a Material Adverse Effect, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, and (b) the Borrower or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with GAAP.



     Section 5.05 Maintenance of Properties; Insurance. The Borrower will, and will cause each
of its Material Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations (including, without limitation, by the maintenance of
adequate self-insurance reserves to the extent customary among such companies).



     Section 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which complete and accurate
entries are made of its financial and business transactions to the extent required by GAAP and
applicable law. The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, at such Administrative
Agent’s or Lender’s expense, upon reasonable prior notice and subject to any applicable
restrictions or limitations on access to any facility or information that is classified or
restricted by contract or by law, regulation or governmental guidelines, to visit and inspect its
properties, to examine and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at such reasonable times
and as often as reasonably requested; provided that advance notice of any discussion with
such independent accountants shall be given to the Borrower and, so long as no Event of Default
shall



47









 







have occurred and be continuing, the Borrower shall have the opportunity to be present at any such
discussion. The Administrative Agent and each Lender agree to keep all information obtained by
them pursuant to this Section confidential in accordance with Section 9.12.



     Section 5.07 Compliance with Laws. The Borrower will, and will 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,
applicable Environmental Laws and ERISA and the rules and regulations thereunder), except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.



     Section 5.08 Use of Proceeds. The proceeds of the Loans will be used for general corporate
purposes, including the refinancing of existing Indebtedness of (a) the Borrower and (b) subject to
consummation of the Acquisition, Premcor Inc. in connection with the Acquisition. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and X. Letters of
Credit will be issued only for general corporate purposes.



ARTICLE VI

Negative Covenants




     Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:



     Section 6.01 Indebtedness. The Borrower will not permit Consolidated Net Debt at any time
to exceed 60% of the sum of Consolidated Net Debt plus the Consolidated Net Worth of the Borrower
plus the involuntary liquidation value of any Preferred Equity Interests.



     Section 6.02 Liens. The Borrower will not, and will not permit any of its Subsidiaries to,
create, assume or suffer to exist any Lien to secure payment of any Indebtedness or any Derivatives
Obligations on any asset now owned or hereafter acquired by it, except for:



          (a) Liens in favor of the Administrative Agent securing Indebtedness or other obligations
existing pursuant to this Agreement;




          (b) Liens created by Capital Lease Obligations, provided that the Liens created by any
such Capital Lease Obligations attach only to the Property leased to the Borrower or one of its
Subsidiaries pursuant thereto and general intangibles and proceeds related thereto, and
improvements, accessories and upgrades to the property leased pursuant thereto;




          (c) purchase money Liens and Liens on property acquired, constructed or improved by the
Borrower or any Subsidiary (including such Liens securing Indebtedness incurred within 180 days of
the date on which such Property was acquired or the date of completion of such construction or
improvement), provided that all such Liens attach only to the Property purchased, constructed or
improved with the proceeds of the Indebtedness secured thereby and improvements, accessions,
general intangibles and proceeds related thereto;




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          (d) Liens on Property of a Person which exist at the time such Person becomes a Subsidiary of
the Borrower as a result of an acquisition, merger or other combination, or at the time such Person
is merged or consolidated with or into, or otherwise acquired by, the Borrower or a Subsidiary
(including improvements, accessions, general intangibles and proceeds related thereto), which Liens
were not granted in contemplation of such acquisition, merger, or other combination;




          (e) any Lien existing on any asset prior to the acquisition thereof by the Borrower or a
Subsidiary (including improvements, accessions, general intangibles and proceeds related thereto),
which Liens were not granted in contemplation of such acquisition;




          (f) Liens on property of a non wholly-owned Subsidiary to secure obligations of such
Subsidiary to the Borrower or to a wholly-owned 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 wholly-owned Subsidiary unless such Liens are otherwise permitted
hereunder;




          (g) 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;




          (h) to the extent (i) Securitization Transactions are determined pursuant to a change in GAAP
or a change in the interpretation of GAAP after the Revolving Effective Date to constitute
Indebtedness or (ii) the Borrower elects to treat Securitization Transactions as Indebtedness after
the Revolving Effective Date (it being understood that, as of the Revolving Effective Date,
Securitization Transactions do not constitute Indebtedness), Liens customarily granted on accounts
receivable and related assets in connection with Securitization Transactions in an aggregate amount
at any time not to exceed $1,000,000,000;




          (i) any Lien arising out of refinancing, extending, renewing or refunding (or successively
refinancing, extending, renewing or refunding) any Indebtedness secured by any Lien permitted by
any of the foregoing clauses of this Section, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by any additional assets;




          (j) Liens securing any Indebtedness that constitutes Project Financing in an aggregate amount
at any time not to exceed $1,000,000,000; and




          (k) (i) Liens securing Derivatives Obligations and (ii) Liens not otherwise permitted by the
foregoing clauses of this Section securing Indebtedness; provided that the sum of (x) the
aggregate amount of assets subject to Liens described in clause (i) of this Section 6.02(k)
(excluding Liens arising as a result of customary netting and offset provisions in Hedging
Agreements) and (y) the aggregate principal or face amount of Indebtedness secured by Liens
described in clause (ii) of this Section 6.02(k) shall at no time exceed 10% of Consolidated Net
Worth.




     Section 6.03 Fundamental Changes. (a) The Borrower will not merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with the Borrower, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series of



49









 







transactions) all or substantially all of the Borrower’s assets, whether now owned or hereafter
acquired (including stock of its Subsidiaries), or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Person may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, and (ii) any Person may merge with the Borrower as long as the surviving
entity, if other than the Borrower, is of an Investment Grade Rating equal to or higher than the
Borrower’s rating and so long as the surviving entity assumes, pursuant to the terms of such
transaction, each of the obligations of the Borrower under the Transactions and such assumption is
evidenced by an agreement executed and delivered to the Lenders within 30 days of such transaction
in a form reasonably satisfactory to the Required Lenders. Without limiting the generality of the
foregoing, the transfer of more than 50% of the Borrower’s Consolidated Total Assets shall be
deemed, for the purposes of this Section 6.03(a), a transfer of all or substantially all of the
assets of the Borrower.



          (b) The Borrower will not, and will not permit any of its Material Subsidiaries to, engage to
any material extent in any business other than businesses of the type conducted by the Borrower,
Premcor Inc. and their respective subsidiaries on the Revolving Effective Date and businesses
reasonably related thereto.




     Section 6.04 Hedging Agreements. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in
the ordinary course of business.



     Section 6.05 Transactions with Affiliates. The Borrower will not, and will not permit any
of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, provided that the foregoing
restriction shall not apply to:



          (a) transactions between or among the Borrower and its Subsidiaries or between or among
Subsidiaries;




          (b) transactions pursuant to any contract or agreement in effect on the date hereof, as the
same may be amended, modified or replaced from time to time, so long as any such contract or
agreement as so amended, modified or replaced is, taken as a whole, no less favorable to the
Borrower and its Subsidiaries in any material respect than the contract or agreement in effect on
the date hereof;




          (c) transactions between Controlled Affiliates of Valero GP, LLC and the Borrower or its
Subsidiaries conforming to agreements described in Registration Statement No. 333-43668 filed with
the Securities and Exchange Commission on Form S-1; and




          (d) transactions pursuant to which (i) taxes are allocated among the Borrower and its
Affiliates in any manner consistent with Section 1552 (or any successor provision) of the Code,
(ii) general and administrative expenses are allocated among the Borrower and its



50









 






Affiliates in any manner consistent with Section 482 (or any successor provision) of the Code,
and (iii) interest is charged or credited to Affiliates in any reasonable manner not inconsistent
with the Code.




     Section 6.06 Subsidiary Indebtedness. The Borrower will not permit the aggregate principal
amount of Indebtedness of its Subsidiaries (excluding (a) Indebtedness of Subsidiaries existing on
the Revolving Effective Date and described on Schedule 6.06, (b) Indebtedness existing at the time
such Person becomes a Subsidiary or at the time such Person is merged or consolidated with or into,
or otherwise acquired by, a Subsidiary and not created in contemplation of such event,
(c) refinancings, extensions, renewals, or refundings of any Indebtedness permitted by clauses (a)
and (b) above, (d) to the extent (i) Securitization Transactions are determined pursuant to a
change in GAAP or a change in the interpretation of GAAP after the Revolving Effective Date to
constitute Indebtedness or (ii) the Borrower elects to treat Securitization Transactions as
Indebtedness after the Revolving Effective Date (it being understood that, as of the Revolving
Effective Date, Securitization Transactions do not constitute Indebtedness), Indebtedness of
Subsidiaries in respect of Securitization Transactions in an aggregate amount at any time not to
exceed $1,000,000,000, (e) any Indebtedness of a Subsidiary owed to the Borrower or another
wholly-owned Subsidiary, (f) any Indebtedness owing by the Controlled Affiliates of Valero GP, LLC,
(g) any Indebtedness not otherwise permitted by this Section 6.06 owed by a Subsidiary organized
under the laws of Canada or any province thereof not to exceed C$1,000,000,000 in the aggregate at
any time, (h) any Indebtedness that constitutes Project Financing in an aggregate amount at any
time not to exceed $1,000,000,000 and (i) any Guarantees by The Premcor Refining Group Inc. of
Indebtedness of the Borrower) at any time to exceed 5% of Borrower’s Consolidated Net Worth;
including in any case (subject to the exceptions contained in clause (i) above) any Guarantee by a
Subsidiary of Indebtedness of the Borrower other than Indebtedness owing to the Lenders or the
Administrative Agent.



     Section 6.07 Consolidated Interest Coverage Ratio. The Borrower will not permit at any
time its Consolidated Interest Coverage Ratio for any Rolling Period to be less than 2.75 to 1.00.



     Section 6.08 Project Financing Indebtedness. The Borrower will not permit the aggregate
principal amount of Indebtedness of the Borrower and its Subsidiaries that constitutes Project
Financing at any time to exceed $1,000,000,000.



ARTICLE VII

Events of Default




     If any of the following events (“Events of Default”) shall occur:



          (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;




          (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under the



51









 






Loan Documents, when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five Business Days;




          (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any
Subsidiary in or in connection with the Loan Documents or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with the Loan Documents or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed
made;




          (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, Section 5.03 (with respect to the Borrower’s existence) or Section 5.08
or in Article VI;




          (e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in the Loan Documents (other than those specified in clause (a), (b) or (d) of this
Article), and such failure shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent to the Borrower (which notice will be given at the request of any
Lender);




          (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable (after giving effect to any applicable notice requirement or grace
period);




          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (any condition requiring the giving of notice,
the lapse of time, or both, having been satisfied) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;




          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other similar relief in respect of the Borrower or any
Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or
(ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Material Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;




          (i) the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief with respect to itself or its
debts under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now
or hereafter in effect, (ii) consent to the institution of, or fail to contest in a



52









 






timely and appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding provided such petition on its face is sufficient
such that admission of the material allegations therein provides a basis for granting the relief
requested, (v) make a general assignment for the benefit of creditors or (vi) take any corporate
action to authorize any of the foregoing;




          (j) the Borrower or any Material Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;




          (k) one or more judgments for the payment of money in an aggregate amount in excess of
$100,000,000 (to the extent not covered by independent third party insurance as to which the
respective insurer does not dispute coverage and is not subject to an insolvency proceeding) shall
be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Borrower or any Subsidiary to enforce any such judgment;




          (l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse Effect; or




          (m) a Change in Control shall occur;




then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i)terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to
the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.




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ARTICLE VIII

The Administrative Agent and the Global Administrative Agent




          Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.




          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank 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 other Affiliate
thereof as if it were not the Administrative Agent hereunder.




          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise as directed in
writing by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof
is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or
any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.




          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be



54









 






counsel for the Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.




          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.




          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Banks and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent
which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while it was acting as Administrative
Agent.




          None of the Arrangers, Syndication Agent and Co-Documentation Agents shall have any duties,
responsibilities or liabilities under this Agreement and the other Loan Documents other than their
duties, responsibilities and liabilities in their capacity as Lenders (or Issuing Banks, if
applicable) hereunder.




          Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Global
Administrative Agent as its agent and authorizes the Global Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Global Administrative
Agent by the terms hereof, together with such actions and powers as are reasonably incidental
thereto. Except for acting as agent for the Combined Lenders in connection with waivers,
amendments and modifications as specified in Section 9.02(b), the Global Administrative Agent shall
have no duties, responsibilities or liabilities under this Agreement or any other Loan Document.
Subject to the appointment and acceptance of a successor Global Administrative Agent as provided in
this paragraph, the Global Administrative Agent may resign at any time by notifying the Combined
Required Lenders, the Issuing Banks and the Borrower. Upon any such





55











 




resignation, the Combined Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed by the Combined
Required Lenders and shall have accepted such appointment within 30 days after the retiring Global
Administrative Agent gives notice of its resignation, then the retiring Global Administrative Agent
may, on behalf of the Combined Lenders and the Issuing Banks, appoint a successor Global
Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Global Administrative Agent hereunder by
a successor, such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Global Administrative Agent, and the retiring Global
Administrative Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Global Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such successor. After
the Global Administrative Agent’s resignation hereunder, the provisions of this Article and Section
9.03 shall continue in effect for the benefit of such retiring Global Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Global Administrative Agent.




          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Global Administrative Agent or any other Lender 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 Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent, the Global Administrative Agent or any other Lender
and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or thereunder.



ARTICLE IX

Miscellaneous




     Section 9.01 Notices. (a)  Notices Generally. Except in the case of notices and
other communications expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or sent by
facsimile, as follows:



                  (i) if to the Borrower, to it at Valero Energy Corporation, One Valero Way, San Antonio, Texas
78249, Attention of Donna M. Titzman, Treasurer (Facsimile No. (210) 345-2267);



                  (ii) if to the Administrative Agent, the Global Administrative Agent or to JPMorgan Chase
Bank, N.A., as an Issuing Bank, to JPMorgan Chase Bank, N.A., Loan and Agency Services, 1111 Fannin
Street, 10th Floor, Houston, Texas 77002, Attention of Claudette Reid (Facsimile No. (713)
427-6307), with a copy to JPMorgan Chase Bank, N.A., 600 Travis,



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20th Floor, Houston, Texas 77002, Attention of Bob Mertensotto (Facsimile No. (713) 216-8870);




               (iii) if to Bank of America, N.A., as an Issuing Bank, to Bank of America, N.A., Trade
Services, Mail Code — CA9-703-19-23, 333 S. Beaudry Avenue, Los Angeles, California 90017-1466,
Attention of Stella Rosales (Facsimile No. (213) 345-6684), with a copy to Bank of America, N.A.,
700 Louisiana Street, 8th Floor, Houston, Texas 77002, Attention of Pamela Rodgers (Facsimile No.
(713) 247-7278);



               (iv) if to BNP Paribas, as an Issuing Bank, to BNP Paribas, 919 Third Avenue, New York, New
York 10022, Attention of Luasanne Chin (Facsimile No. (212) 471-699l) with a copy to the attention
of Lucrece Francois (Facsimile No. (212) 471-6991);



               (v) if to Royal Bank of Canada, as an Issuing Bank, to Royal Bank of Canada, New York Branch,
One Liberty Plaza, New York, New York, 10006-1404, Attention of Chandran Panicker (Facsimile No.
(212) 428-3015);



               (vi) if to Mizuho Corporate Bank, Ltd., as an Issuing Bank, to Mizuho Corporate Bank, Ltd.,
1800 Plaza Ten, Jersey City, New Jersey 07311, Attention of Hema Divatia (Facsimile No. (201)
626-9142); and



               (vii) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.



          (b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including email and Internet
or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that
the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices under such Article II
by electronic communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures may be limited to
particular notices or communications.



     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its email address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.



          (c) Change of Address. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties hereto.



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All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt.




     Section 9.02 Waivers; Amendments.



          (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks
and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to any departure by
the Borrower therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) or (c) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing
Bank may have had notice or knowledge of such Default at the time.



          (b) No provision contained in Article III, V, VI or VII hereof, and none of the definitions of
any defined terms related to such provisions, may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the Combined Required
Lenders or by the Borrower and the Global Administrative Agent with the consent of the Combined
Required Lenders; provided that the same waiver, amendment or modification is requested by
the Borrower in connection with the Term Credit Agreement.



          (c) Except as provided for in Section 9.02(b), neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with
the consent of the Required Lenders.



          (d) Notwithstanding anything to the contrary contained in paragraphs (b) and (c) above, no
such agreement or agreements referred to in such paragraphs shall (i) increase or extend the
Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration or termination of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or Section 2.18(c) in a manner
that would alter the pro rata treatment of Lenders or pro rata sharing of payments required
thereby, without the written consent of each Lender, or (vi) change Section 2.12(d), Section 4.01,
Section 4.02 or any of the provisions of this Section or the definition of “Required Lenders”,
“Combined Required Lenders” or any other provision hereof specifying the number or percentage of
Lenders or Combined Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent



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hereunder, without the written consent of each Lender. In addition, no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Global
Administrative Agent or any Issuing Bank hereunder without the prior written consent of the
Administrative Agent, the Global Administrative Agent or such Issuing Bank, as the case may be.



     Section 9.03 Expenses; Indemnity; Damage Waiver.



          (a) The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the
Administrative Agent, the Global Administrative Agent and their Affiliates, including the
reasonable fees, charges and disbursements of a single law firm, as counsel for the Administrative
Agent and the Global Administrative Agent, in connection with the syndication of the credit
facilities provided for herein and the preparation and administration of this Agreement, (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the Global Administrative
Agent and their Affiliates, including the reasonable fees, charges and disbursements of a single
law firm, as counsel for the Administrative Agent and the Global Administrative Agent, in
connection with any amendments, modifications or waivers of the provisions hereof (in the case of
clauses (i) and (ii), whether or not the transactions contemplated hereby or thereby shall be
consummated), (iii) all reasonable out-of-pocket expenses incurred by each Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of Credit issued by it
or any demand for payment thereunder and (iv) all out-of-pocket expenses incurred by the
Administrative Agent, the Global Administrative Agent, any Issuing Bank or any Lender, including
the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, the
Global Administrative Agent, any Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.



          (b) The Borrower shall indemnify the Administrative Agent, the Global Administrative Agent,
the Arrangers, each Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related expenses, including
settlement costs and the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or
as a result of (i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective obligations
hereunder or the consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by
any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not,



59









 







as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct
of such Indemnitee.



          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Global Administrative Agent, any Arranger or any Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative
Agent, the Global Administrative Agent, such Arranger or such Issuing Bank, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the Global Administrative
Agent, such Arranger or such Issuing Bank in its capacity as such.



          (d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.



          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.



     Section 9.04 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 permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), except that, other than as
permitted in Section 6.03, (i) the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and assigns permitted
hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.



          (b)



               (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to
one or more assignees all or a portion of its rights and obligations under



60









 







this Agreement (including all or a portion of its Commitment and the Loans at the time owing
to it) with the prior written consent (such consent not to be unreasonably withheld) of:



                    A. the Borrower, provided that no consent of the Borrower shall be required for an assignment
to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and
is continuing, any other assignee;



                    B. the Administrative Agent, provided that no consent of the Administrative Agent shall be
required for an assignment of any Commitment to an assignee that is a Lender with a Commitment
immediately prior to giving effect to such assignment; and



                    C. each Issuing Bank.



               (ii) Assignments shall be subject to the following additional conditions:



                    A. except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount
of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;



                    B. each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement;



                    C. the parties to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500 (which, for
the avoidance of doubt, shall not be for the account of the Borrower, other than in respect of an
assignment initiated by the Borrower pursuant to Section 2.19(b)); and



                    D. the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.



          For the purposes of this Section 9.04(b), the term “Approved Fund” has the following meaning:



          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



               (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and



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Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Section 2.15, Section 2.16, Section 2.17 and Section 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with paragraph (c) of this
Section.



               (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitment of, and
principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, any Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.



          
     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register; provided that if either the assigning Lender or the
assignee shall have failed to make any payment required to be made by it pursuant to Section
2.06(d) or (e), Section 2.07(b), Section 2.18(d) or Section 9.03(c), the Administrative Agent shall
have no obligation to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full, together with all accrued
interest thereon. No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.



          (c)



          
     (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or any
Issuing Bank, sell participations to one or more banks or other entities (other than Competitors)
(a “Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and
(C) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue
to deal solely and directly with such Lender in



62









 







connection with such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first sentence of Section 9.02(d) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.15, Section 2.16 and Section 2.17 to the
same extent as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.



                    (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or
Section 2.17 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.



     Section 9.05 Survival. All covenants, agreements, representations and warranties made by
the Borrower herein and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto
and shall survive the execution and delivery of this Agreement and the making of any Loans and the
issuance of any Letters of Credit, regardless of any investigation made by any such other party or
on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement
is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Section 2.15, Section 2.16, Section 2.17 and
Section 9.03 and Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.



     Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single



63









 







contract. This Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.



     Section 9.07 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



     Section 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower that are due and payable at such time held by such
Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement.
Each Lender agrees to promptly notify the Borrower after any such setoff and application by it or
any of its Affiliates, provided that the failure to give such notice shall not affect the validity
of such setoff and application. The rights of each Lender under this Section are in addition to
and shall not be affected by any other rights and remedies (including other rights of setoff) which
such Lender may have.



     Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.



          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 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. Nothing in this Agreement shall



64









 







affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement against the Borrower or its
properties in the courts of any jurisdiction.



          (c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.



          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.



     Section 9.10 Waiver Of Jury Trial. Each Party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal
proceeding directly or indirectly arising out of or relating to this Agreement or the transactions
contemplated hereby (whether based on contract, tort or any other theory). Each Party hereto
(A) certifies that no representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of litigation, seek to
enforce the foregoing waiver and (B) acknowledges that it and the other Parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers and certifications
in this Section.



     Section 9.11 Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.



     Section 9.12 Confidentiality. Each of the Administrative Agent, the Global Administrative
Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information confidential), (b)
to the extent requested by any regulatory authority or self-regulatory authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f)
subject to an agreement containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or prospective Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap, securitization or derivative transaction relating to
the Borrower and its obligations under this Agreement, (g) with the consent of the Borrower or (h)
to the extent such Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative



65









 







Agent, the Global Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section, “Information” means all
information received from or on behalf of the Borrower relating to the Borrower, Premcor Inc.,
their respective subsidiaries or their respective businesses, other than any such information that
is available to the Administrative Agent, the Global Administrative Agent, any Issuing Bank or any
Lender on a nonconfidential basis prior to disclosure by or on behalf of the Borrower. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.



     Section 9.13 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if
at any time the interest rate applicable to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



     Section 9.14 USA PATRIOT Act. Each Lender that is subject to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby
notifies the Borrower that pursuant to the requirements of the Act, it is required to obtain,
verify and record information that identifies the Borrower, which information includes the name and
address of the Borrower and other information that will allow such Lender to identify the Borrower
in accordance with the Act.



     Section 9.15 Waiver of Notice of Termination. Contemporaneously with the Revolving
Effective Date, the commitments under each Existing Agreement will be terminated. Each Lender that
is a party to either of the Existing Agreements hereby consents to such termination and waives any
notice it might be entitled to in connection therewith pursuant to the terms of the Existing
Agreements.



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66









 





     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/
Michael S. Ciskowski	 
	 	 	Michael S. Ciskowski 	 
	 	 	Executive Vice President and

Chief Financial Officer 	 







Signature Page to

$2,500,000,000 5-Year Revolving Credit Agreement




S- 1









 






	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

individually and as Administrative Agent and

as Global Administrative Agent

 	 
	 	By:  	/s/ Robert C. Mertensotto 	 
	 	 	Robert C. Mertensotto 	 
	 	 	Managing Director 	 
	 





Signature Page to

$2,500,000,000 5-Year Revolving Credit Agreement



     We have omitted the “Pricing Schedule” and “Commitment Schedule” from this Exhibit. We will furnish a copy of these schedules to the Commission upon request.




S- 2









 








EXHIBIT A




FORM OF

ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below (the “Effective Date”) and is entered into by and between
[Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the meanings given
to them in the Credit Agreement identified below (as amended, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth herein in full.



     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit and
guarantees included in such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and assignment is
without recourse to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.



	 	 	 	 	 
	1.

	 	Assignor:
	 	                                                            
	 
	 	 	 	 
	2.

	 	Assignee:
	 	                                                            
	 

	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]1]
	 
	 	 	 	 
	3.

	 	Credit Agreement:
	 	The $2,500,000,000 5-Year Credit Agreement dated as of August 17, 2005 among Valero Energy
Corporation, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto.








 




			
	1	 	Select as applicable.





Exhibit A-1









 







	6.	 	Assigned Interest:





	 	 	 	 	 
	Aggregate Amount of	 	Amount of	 	Percentage Assigned
	Commitment/Loans	 	Commitment/Loans	 	of
	for all Lenders	 	Assigned	 	Commitment/Loans2
	$
	 	$
	 	%
	$
	 	$
	 	%
	$
	 	$
	 	%





Effective
Date:
                    
___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 
	 	ASSIGNOR



[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 



	 	 	 	 	 
	 	ASSIGNEE


[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 





 




			
	2	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Loans of all Lenders thereunder.






Exhibit A-2









 







[Consented to and]3 Accepted:




JPMORGAN CHASE BANK, N.A., as

    Administrative Agent and Issuing Bank




By                                                             

    Title:




[other issuing banks]




 




			
	3	 	To be added only if the consent of the Administrative
Agent is required by the terms of the Credit Agreement.





Exhibit A-3









 





[Consented to:]4




VALERO ENERGY CORPORATION, as

Borrower




By                                                             

    Title:






 




			
	4	 	To be added only if the consent of the Borrower is
required by the terms of the Credit Agreement.





Exhibit A-4









 





ANNEX 1




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




     1. Representations and Warranties.



     1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.



     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, and
such other documents and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on
the basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the
Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms
of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent, the Assignor or any other
Lender, 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 action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a Lender.



     2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.



Exhibit A-5









 





     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.




Exhibit A-6









 








EXHIBIT B




FORM OF

NOTICE OF COMMITMENT INCREASE




[Date]




JPMorgan Chase Bank, N.A.

1111 Fannin Street, 10th Floor

Houston, Texas, 77002

Attention:                                         



Ladies and Gentlemen:



The undersigned, Valero Energy Corporation (the “Borrower”), refers to the $2,500,000,000
5-Year Revolving Credit Agreement dated as of August 17, 2005 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”, with terms defined in the
Credit Agreement and not otherwise defined herein being used herein as therein defined) among the
Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders and other agents
party thereto. The Borrower hereby notifies you, pursuant to Section 2.02 of the Credit Agreement,
that it has arranged for the aggregate amount of the Commitments under the Credit Agreement to be
increased by adding to the Credit Agreement the CI Lenders referenced below and/or by allowing one
ore more existing Lenders to increase their respective Commitments. In that connection, the
Borrower sets forth below the information relating to such proposed Commitment Increase as required
by Section 2.02(b) of the Credit Agreement:




(a) the effective date of such increase of aggregate amount of the Lenders’ Commitments is
                                        ;



(b) the amount of the requested increase of the Commitments is $                                        ;



(c) the CI Lenders that have agreed with the Borrower to provide their respective Commitments are
                                         [INSERT NAMES OF THE CI LENDERS];



(d) the existing Lenders that have agreed with the Borrower to increase their respective
Commitments are                                          [INSERT NAMES OF THE LENDERS]; and



(e) set forth on Annex I attached hereto is the amount of the respective Commitments of all
Reducing Percentage Lenders, all CI Lenders and all existing Lenders increasing their respective
Commitments as of effective date of such Commitment Increase.



Exhibit B-1









 





Delivery of an executed counterpart of this Notice of Commitment Increase by telecopier shall be
effective as delivery of an original executed counterpart of this Notice of Commitment Increase.



Very truly yours,




VALERO ENERGY CORPORATION




By:
 





Name:

 





Title:

 





Acknowledged by:




JPMORGAN CHASE BANK, N.A.,

    as Administrative Agent




By:
 





Name:  





Title:  






Exhibit B-2









 









EXHIBIT C




FORM OF

BORROWING REQUEST




JPMorgan Chase Bank, N.A., as Administrative Agent

   for the Lenders parties

   to the Credit Agreement

   referred to below

270 Park Avenue

New York, New York 10017

[Date]





Reference: Valero Energy Corporation




Ladies and Gentlemen:




          The undersigned, VALERO ENERGY CORPORATION, refers to the $2,500,000,000 5-Year Revolving
Credit Agreement, dated as of August 17, 2005 (the “Credit Agreement,” the terms defined
therein being used herein as therein defined), among the undersigned, the Lenders parties thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party thereto, and hereby
gives you notice, irrevocably, pursuant to Section 2.05 of the Credit Agreement, that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the “Proposed Borrowing”) as
required by Section 2.05 of the Credit Agreement:





     (i) The aggregate amount of the Proposed Borrowing is $                                        .




     (ii) The Business Day of the Proposed Borrowing is                                         , 200_.




     (iii) The Type of the Proposed Borrowing is [an ABR Borrowing] [a Eurodollar
Borrowing].




     (iv) The Interest Period for each Eurodollar Borrowing made as part of the Proposed
Borrowing is [                     month[s]].




     (v) The Borrower’s transit routing and bank account for loan funding is
                                        .



	 	 	 	 	 
	 	Very truly yours,

VALERO ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Title: 	 




Exhibit C-1









 





EXHIBIT D




FORM OF PROMISSORY NOTE




	 	 	 
	 
	 	 
	$                    

	 	New York, New York
	 

	 	August 17, 2005






     FOR VALUE RECEIVED, the undersigned, VALERO ENERGY CORPORATION, a Delaware corporation (the
“Borrower”), hereby unconditionally promises to pay
to the order of                                          (the
“Lender”) at the office of JPMorgan Chase Bank, N.A., located at 270 Park Avenue, New York,
New York 10017, in lawful money of the United States of America and in same day funds, on the
Maturity Date the principal amount of (a)
                     DOLLARS ($                    ), or, if less, (b) the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to the Credit
Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in the Credit Agreement.



     The holder of this Note is authorized to, and prior to any transfer hereof shall, endorse on
the schedules attached hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each Loan made pursuant to the
Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another Type and, in the case
of a Eurodollar Loan, the length of each Interest Period with respect thereto. The failure to make
any such endorsement shall not affect the obligations of the Borrower in respect of such Loan.



     This Note (a) is one of the Notes referred to in the $2,500,000,000 5-Year Revolving Credit
Agreement, dated as of August 17, 2005 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Valero Energy Corporation, the Lenders named therein,
JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders, and the other agents party
thereto, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional
and mandatory prepayment in whole or in part as provided in the Credit Agreement.



     Reference is made to the Credit Agreement for provisions for the acceleration of the maturity
hereof.



     All parties now and hereafter liable with respect to this Note, whether maker, principal,
surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and all other notices of any kind except those
expressly required under the Credit Agreement.



     Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.



Exhibit D-1









 





     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.



	 	 	 	 	 
	 	VALERO ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Title: 	 




Exhibit D-2









 






SCHEDULE A

to

Promissory Note




LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Interest Period and	 	 	 	Amount of	 	 	 	 
	 	 	 	 	Amount Continued or	 	Eurodollar Rate	 	Amount of Principal	 	Eurodollar Loans	 	Unpaid Principal	 	 
	 	 	Amount of	 	Converted to	 	with Respect	 	of Eurodollar Loans	 	Converted to ABR	 	Balance of	 	Notation Made
	Date	 	Eurodollar Loans	 	Eurodollar Loans	 	Thereto	 	Repaid	 	Loans	 	Eurodollar Loans	 	By
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 





Exhibit D-3









 






SCHEDULE B

to

Promissory Note




LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 		 	 	 	 
	 	 	 	 	 	 	 	 	Amount of ABR Loans	 	 	 	 
	 	 	Amount of ABR	 	Amount Converted	 	Amount of Principal of	 	Converted to Eurodollar	 	Unpaid Principal	 	Notation
	Date	 	Loans	 	to ABR Loans	 	ABR Loans Repaid	 	Loans	 	Balance of ABR Loans	 	Made By
	 
	 	 	 	 	 	 	 	 	 	 	 	 





Exhibit D-4









 





EXHIBIT E




OPINION OF IN-HOUSE COUNSEL FOR THE BORROWER




August 17, 2005




To the Lenders and the Administrative

   Agent Referred to Below

c/o JPMorgan Chase Bank, N.A., as

   Administrative Agent

270 Park Avenue

New York, New York 10017




Ladies and Gentlemen:




     I am Vice President — Corporate Law and Secretary of Valero Energy Corporation, a Delaware
corporation (the “Borrower”) and have acted as counsel for Borrower in connection with the
$2,500,000,000 5-Year Revolving Credit Agreement dated as of August 17, 2005 (the “Credit
Agreement”), among the Borrower, the banks and other financial institutions identified therein
as Lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party
thereto. Terms defined in the Credit Agreement are used herein with the same meanings.



     I, or individuals under my direction, have examined originals or copies, certified or
otherwise identified to my satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other investigations of fact and law
as I have deemed necessary or advisable for purposes of this opinion.



     As to matters of fact material to this opinion, I have relied on certificates of public
officials and certificates of officers of the Borrower and I have made such inquiry of officers of
the Borrower as I have deemed necessary or appropriate in connection with the matters set forth in
this opinion.



     As a basis for this opinion, I have assumed that (i) each of the Loan Documents and all other
documents and certificates examined by me have been duly authorized, executed and delivered by each
party thereto, other than the Borrower, (ii) all signatures other than those of the Borrower are
authentic, all documents submitted to me as originals are authentic, and all documents submitted to
me as certified or photostatic copies conform to authentic or original documents, (iii) each party
to the Loan Documents, other than the Borrower, has been duly formed, and is validly existing and
in good standing under the laws of the jurisdiction in which it is formed, (iv) each party to the
Loan Documents, other than the Borrower, has all requisite power and authority to enter into and
perform each of the Loan Documents to which it is a party and (v) each such document is or
evidences the legal, valid and binding obligation of such parties thereto (other than the
Borrower).



     Upon the basis of the foregoing, I am of the opinion that:



     1. Each of the Borrower and its Material Subsidiaries (a) is a corporation or partnership duly
organized or formed, as applicable, validly existing and in good standing under



Exhibit E-1









 







the laws of the jurisdiction in which it was organized or formed, as applicable, (b) has all
corporate or partnership, as applicable, power and authority to carry on its business as now
conducted and (c) except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and
is in good standing in, every jurisdiction where such qualification is required.



     2. The Transactions are within the Borrower’s corporate powers and have been duly authorized
by all necessary corporate and, if required, stockholder action. The Loan Documents have been duly
executed and delivered by the Borrower and constitute legal, valid and binding obligations of the
Borrower, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting creditors’ rights generally, general
principles of equity, regardless of whether considered in a proceeding in equity or at law, and an
implied covenant of good faith and fair dealing.



     3. In any action or proceeding arising out of or relating to the Credit Agreement in any court
of the State of Texas or in any federal court sitting in the State of Texas, such court would
recognize and give effect to the provisions of Section 9.09(a) of the Credit Agreement wherein the
parties thereto agree that the Credit Agreement shall be governed by the laws of the State of New
York.



     4. The Transactions (a) do not require the Borrower or any Subsidiary to obtain any consent or
approval of, or make any registration or filing with, or request any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect
(except for any reports required to be filed by the Borrower with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934), (b) will not result in a violation by
the Borrower or any Subsidiary of any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets,
and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.



     5. There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to my knowledge, threatened against or affecting the Borrower or any
of its Subsidiaries (a) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect (other than the Disclosed Matters) or (b) that involve the Loan
Documents or the Transactions.



     6. Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940, as amended.



     7. Each of the Borrower and its Subsidiaries is not subject to, or is exempt from, regulation
as a “holding company” under the Public Utility Holding Company Act of 1935, as amended.



Exhibit E-2









 





     I am a member of the Bar of the State of Texas and the foregoing opinions are limited to the
laws of the State of Texas, the statutory laws and regulations of the United States of America and
the General Corporation Law of the State of Delaware, and in each case, exclusive of municipal,
local and county ordinances, laws, rules and regulations. The foregoing opinions are limited in
all respects to such laws in existence as of the date hereof, and I undertake no obligation or
responsibility to update or supplement this opinion in response to subsequent changes in the law or
future events affecting the transactions contemplated by the Credit Agreement.



     The opinions expressed herein are subject to the following further assumptions,
qualifications, limitations and comments:



     a. For purposes of the opinions herein expressed, except for the opinion given in paragraph 3
regarding the enforceability of the choice of law provision of the Credit Agreement, I have assumed
that the laws of the State of New York are the same as the laws of the State of Texas in all
relevant respects.



     b. No opinion is expressed as to whether a court would grant specific performance or any other
equitable remedy with respect to the Credit Agreement, or whether a court would grant a particular
remedy sought under the Credit Agreement as opposed to another remedy provided therein or at law or
in equity.



     c. No opinion is expressed as to the validity, binding effect, enforceability or legality of
any provision of the Credit Agreement which purports to grant the Administrative Agent the right to
accelerate the obligations owned by any non-consenting Lender.



     d. No opinion is expressed as to the enforceability of provisions in the Credit Agreement, if
any, that purport to: (i) grant rights of indemnification; (ii) provide that any provision therein
is severable from any other provision; (iii) restrict access to legal or equitable remedies; (iv)
establish evidentiary standards for suits or proceedings to enforce any agreements or evidentiary
standards relating to any powers granted thereunder; (v) waive or affect any rights or demands or
notices; (vi) waive either illegality as a defense to the performance of contract obligations or
any other defense to such performance which cannot, as a matter of law, be effectively waived;
(vii) ratify actions to be taken in the future; (viii) provide for self-help, subrogation, delay or
omission to enforce rights or remedies; (ix) provide rights or remedies to third parties; (x)
bestow subject matter or in personam jurisdiction on any court or to determine the sufficiency or
effectiveness of any service of process or similar judicial procedure; or (xi) provide rights of
set-off.



     This opinion is rendered solely to you in connection with the above matter, and may not be
relied on by you for any other purpose or relied upon by any other Person (other than your
successors who are not Governmental Authorities and your permitted assigns who become Lenders)
without my prior written consent, and is not to be used, circulated, quoted, relied upon, published
or otherwise referred to or disseminated (other than to any permitted assign, or any prospective
assignee under the Credit Agreement) for any other purpose without my prior written consent;
provided that, copies of this opinion may be included with copies of documents to be furnished to
Participants or prospective Participants and may be furnished to the regulatory



Exhibit E-3









 







authorities having supervisory authority over the addressees hereof, for the purpose of
confirming the existence of this opinion, as may be expressly required by law or court proceedings,
and as otherwise expressly permitted pursuant to Section 9.12 of the Credit Agreement.



Very truly yours,




Jay D. Browning





Exhibit E-4









 








EXHIBIT F




OPINION OF BAKER BOTTS L.L.P., COUNSEL FOR THE BORROWER




August 17, 2005




To:    The Lenders party to the Credit Agreement referred to below




     JPMorgan Chase Bank, N.A., as Administrative Agent under said Credit Agreement



     We have acted as special counsel to Valero Energy Corporation, a Delaware corporation (the
“Borrower”), in connection with the preparation, execution and delivery of the
$2,500,000,000 5-Year Revolving Credit Agreement, dated as of August 17, 2005 (the “Credit
Agreement”), among the Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent (“Agent”), and others as agents, and in connection with the execution
and delivery pursuant thereto of the Notes dated the date hereof.



     This opinion is delivered to you pursuant to Section 4.01(b)(ii) of the Credit Agreement.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.



     In arriving at the opinion expressed below, we have examined the following documents:



     (a) a counterpart of the Credit Agreement signed by the Borrower, the Administrative Agent and
the Lenders;



     (b) Notes signed by the Borrower dated the date hereof payable to the order of each Lender
party to the Credit Agreement that has requested a Note; and



     (c) a copy of the opinion letter of Jay D. Browning, internal counsel for the Borrower,
addressed to you and dated the date hereof.



     In rendering the opinion expressed below, we have assumed, with your permission, without
independent investigation or inquiry, (a) the authenticity of all documents submitted to us as
originals, (b) the genuineness of all signatures on all documents that we examined and (c) the
conformity to authentic originals of documents submitted to us as certified, conformed or
photostatic copies.



     Insofar as our opinion expressed below relates to the matters set forth in the above-mentioned
opinion letter of Jay D. Browning, we have assumed without independent investigation the
correctness of the matters set forth in such opinions, and our opinion is subject to the
assumptions, qualifications and limitations set forth in such opinion letter.



     Based upon the foregoing, and subject to the qualifications and comments set forth below, we
are of the opinion that, insofar as the law of the State of New York is concerned, each of the
Credit Agreement and the Notes dated the date hereof constitutes a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except
as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,



 









 







moratorium and other similar laws relating to or affecting 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.



     Our opinion is subject to the following qualifications:



     1. We express no opinion as to Section 9.09 of the Credit Agreement insofar as it relates to
methods of service of process or to an action brought in the United States District Court for the
Southern District of New York and note that such matters may be raised by such court.



     2. We express no opinion as to any indemnification obligations under the Credit Agreement to
the extent such obligations might be deemed to be inconsistent with public policy.



     3. We express no opinion as to Section 9.08 of the Credit Agreement purporting to grant to
Participants a right to set-off.



     4. We express no opinion as to any provision of the Credit Agreement that purports to
establish an evidentiary standard for determinations by the Lenders or the Agent.



     5. We express no opinion with respect to the validity or enforceability of the following
provisions to the extent that they are contained in the Loan Documents: (i) provisions releasing,
exculpating or exempting a party from, or requiring indemnification or contribution of a party for,
liability for its own negligence or to the extent that the same are inconsistent with the public
policy underlying any law, rule or regulation; (ii) provisions purporting to waive, subordinate, or
not give effect to rights to notice, demands, legal defenses or other rights or benefits that
cannot be waived, subordinated, or rendered ineffective under applicable law; (iii) provisions
purporting to waive remedies inconsistent with applicable law; (iv) provisions purporting to render
void and of no effect any transfers of the Company’s rights in any collateral in violation of the
terms of the Loan Documents; (v) provisions relating to powers of attorney, severability or
set-offs; (vi) provisions stating that a guarantee will not be affected by a modification of the
obligation guaranteed in cases in which that modification materially changes the nature or amount
of such obligation; (vii) provisions restricting access to courts or purporting to affect the
jurisdiction or venue of courts (other than the courts of the State of New York with respect to
Loan Documents governed by the State of New York); (viii) provisions relating to waiver of jury
trial; (ix) provisions purporting to exclude all conflicts-of-law rules; (x) provisions setting out
methods or procedures for service of process; (xi) provisions pursuant to which a party agrees that
a judgment rendered by a court or other tribunal in one jurisdiction may be enforced in any other
jurisdiction and (xii) provisions providing that decisions by a party are conclusive or may be made
in its sole discretion.



     6. Insofar as our opinion above relates to the enforceability under New York law of the
provisions in the Loan Documents choosing New York law as the governing law thereof, such opinion
is rendered solely in reliance upon the Act of July 19, 1984, ch. 421, 1984 McKinney’s Sess. Law of
NY 1406 (codified as N.Y. Gen. Oblig. Law §§ 5-1401 (McKinney 1989)) (the “Act”) and is
subject to the qualifications that such enforceability (i) may be limited by public policy
considerations of any jurisdictions in which enforcement of such provisions, or



 









 







of a judgment upon an agreement containing such provisions, is sought and (ii) as specified in
the Act, does not apply to the extent provided to the contrary in subsection two of Section 1-105
of the New York Uniform Commercial Code.



     We are members of the Bar of the State of New York and we do not express any opinion herein
concerning any law other than the law of the State of New York.



     This opinion letter is rendered as of the date set forth above and we expressly disclaim any
obligation to update this letter after the date hereof.



     This opinion has been rendered solely for your benefit in connection with the Credit Agreement
and the transactions contemplated thereby and may not be relied upon by you for any other purpose,
or relied upon by any other Person, firm or corporation without our prior written consent.



Very truly yours,




Baker Botts L.L.P.