Second Amendment to 5-Year Term Credit Agreement



 Exhibit 10.04 
  

 SECOND AMENDMENT 
 TO 
 5-YEAR TERM CREDIT AGREEMENT 
 dated as of 
 May 31, 2006 
 among 
 VALERO
LOGISTICS OPERATIONS, L.P., 
 as Borrower, 
 VALERO L.P., 
 JPMORGAN CHASE BANK, N.A., 
 as Administrative Agent, 
 and 
 The Lenders Party Hereto 
  








 SECOND AMENDMENT TO 5-YEAR TERM CREDIT AGREEMENT 
 THIS SECOND AMENDMENT TO 5-YEAR TERM CREDIT AGREEMENT (this “Second Amendment”) dated as of May 31, 2006, is among VALERO
LOGISTICS OPERATIONS, L.P., a Delaware limited partnership (the “Borrower”); VALERO L.P., a Delaware limited partnership (the “MLP”); JPMORGAN CHASE BANK, N.A., as administrative agent (in such
capacity, together with its successors in such capacity, the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below (collectively, the “Lenders”); and the undersigned Lenders.

 R E C I T A L S 
 A. The Borrower, the Administrative Agent and the Lenders are parties to that certain 5-Year Term Credit Agreement dated as of July 1, 2005 (as amended by the First Amendment to 5-Year Term Credit Agreement dated as of May 15,
2006 among the Borrower, the MLP, the Administrative Agent and the Lenders party thereto, the “Credit Agreement”), pursuant to which the Lenders have made certain extensions of credit available to the Borrower. 
 B. The Borrower has requested and the Lenders have agreed to amend certain provisions of the Credit Agreement. 
 C. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 Section 1. Defined Terms. Each capitalized
term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement. Unless otherwise indicated, all references to Sections in this Second Amendment refer to Sections of the Credit Agreement. 
 Section 2. Amendments to Credit Agreement. 
 2.1 Amendments to Section 1.01. 
 (a) The definition of
“Agreement” is hereby amended in its entirety to read as follows: 
 “Agreement” means this
5-Year Term Credit Agreement, as amended by the First Amendment and the Second Amendment, as the same may be amended, modified, supplemented or restated from time to time in accordance herewith. 







 (b) The grid in the definition of “Applicable Rate” is hereby amended in
its entirety to read as follows: 
  

							
	 Index Debt Ratings:
	  	ABR
Spread	 	 	Eurodollar
Spread	 
	 Tier 1
 Greater than BBB or Baa2
	  	0.00	%	 	0.400	%
	 Tier 2
 BBB or Baa2
	  	0.00	%	 	0.550	%
	 Tier 3
 BBB- or Baa3
	  	0.000	%	 	0.650	%
	 Tier 4
 BB+ or Ba1
	  	0.000	%	 	0.800	%
	 Tier 5
 Less than BB+ or Ba1
	  	0.000	%	 	0.950	%

 (c) The definition of “Consolidated EBITDA” is hereby amended in
its entirety to read as follows: 
 “Consolidated EBITDA” means, without duplication, as to the MLP and its
Subsidiaries, on a consolidated basis for each Rolling Period, the amount equal to Consolidated Operating Income for such period (a) plus the following to the extent deducted from Consolidated Operating Income in such period:
(i) depreciation, amortization and other non-cash charges for such period and (ii) cash distributions received by the Borrower from Skelly-Belvieu Pipeline Company, and similar joint ventures, during such period; (b) minus all
non-cash income added to Consolidated Operating Income in such period; and (c) plus any Material Project EBITDA Adjustments for such period; provided that (i) Consolidated EBITDA shall be adjusted from time to time as necessary to
give pro forma effect to permitted acquisitions or Investments (other than Joint Venture Interests) or sales of property by the MLP and its Subsidiaries and (ii) Consolidated EBITDA shall be adjusted to take into account pro forma
synergies as a result of the Acquisition in an amount equal to (A) $17,500,000 for the Rolling Period ending on September 30, 2005, (B) $15,000,000 for the Rolling Period ending on December 31, 2005, (C) $10,000,000 for the
Rolling Period ending on March 31, 2006 and (D) $5,000,000 for the Rolling Period ending on June 30, 2006. 
  

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 (d) The definition of “Maturity Date” is hereby amended in its entirety
to read as follows: 
 “Maturity Date” means May 31, 2011, and for any Lender agreeing to extend its
Maturity Date pursuant to Section 2.17, the date on May 31 in each year thereafter pursuant to which the Maturity Date has been extended, but in no event later than May 31, 2013. 
 (e) The following definitions are hereby added where alphabetically appropriate to read as follows: 
 “Consenting Lenders” has the meaning set forth in Section 2.17(b). 
 “Extension Confirmation Date” has the meaning set forth in Section 2.17(b). 
 “Extension Effective Date” has the meaning set forth in Section 2.17(b). 
 “Material Project” means each new pipeline, storage facility, processing plant or other capital expansion project wholly
owned by the MLP or its Subsidiaries, the construction of which commenced after May 31, 2006 and which has a budgeted capital cost exceeding $25,000,000. 
 “Material Project EBITDA Adjustments” means, with respect to each Material Project, (a) for any Rolling Period
ending on or prior to the last day of the fiscal quarter during which the Material Project is completed, a percentage (based on the then-current completion percentage of the Material Project) of an amount to be approved by the Required Lenders as
the projected Consolidated EBITDA attributable to such Material Project (such amount to be determined based on contracts relating to such Material Project, the creditworthiness of the other parties to such contracts and projected revenues from such
contracts, capital costs and expenses, scheduled completion, and other factors deemed appropriate by the Lenders) shall be added to actual Consolidated EBITDA for the MLP and its Subsidiaries for the fiscal quarter in which construction of such
Material Project commences and for each fiscal quarter thereafter until completion of the Material Project (net of any actual Consolidated EBITDA attributable to such Material Project following its completion), provided that if construction
of the Material Project is not completed by the scheduled completion date, then the foregoing amount shall be reduced by the following percentage amounts depending on the period of delay for completion (based on the period of actual delay or
then-estimated delay, whichever is longer): (i) longer than 90 days, but not more than 180 days, 25%, (ii) longer than 180 days but not more than 270 days, 50%, and (iii) longer than 270 days, 100%; and (b) for each Rolling
Period ending on the last day of the first, second and third fiscal quarters, respectively, immediately following the fiscal quarter during which the Material Project is completed, an amount equal to the projected Consolidated EBITDA attributable to
the Material Project for the period from but excluding the end of such Rolling Period through and including the last day of the fourth fiscal quarter following the 
  

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 fiscal quarter during which the Material Project is completed shall be added to Consolidated EBITDA for
such Rolling Period (net of any actual Consolidated EBITDA attributable to the Material Project for the period from and including the date of completion through and including the last day of the fiscal quarter during which the Material Project is
completed). Notwithstanding the foregoing, (i) no such additions shall be allowed with respect to any Material Project unless not later than 45 days prior to commencement of construction thereof, the Borrower shall have delivered to the
Administrative Agent and the Lenders written pro forma projections of Consolidated EBITDA attributable to such Material Project and such other information and documentation as the Administrative Agent or any Lender may reasonably request, all in
form and substance satisfactory to the Administrative Agent and the Required Lenders, and (ii) the aggregate amount of all Material Project EBITDA Adjustments during any period shall be limited to 20% of the total actual Consolidated EBITDA of
the MLP and its Subsidiaries for such period (which total actual Consolidated EBITDA shall be determined without including any Material Project EBITDA Adjustments or any adjustments in respect of any acquisitions or dispositions as provided in the
definition of Consolidated EBITDA). 
 “Responsible Officer” means, as to any Person, the Chief Executive
Officer, the President, any Financial Officer or any Vice President of such Person. Unless otherwise specified, all references to a Responsible Officer herein shall mean a Responsible Officer of the Borrower. 
 “Second Amendment” means the Second Amendment to 5-Year Term Credit Agreement dated as of May 31, 2006 among the
Borrower, the MLP, the Administrative Agent and the Lenders party thereto. 
 (f) The definitions of “Consolidated
Interest Coverage Ratio” and “Consolidated Interest Expense” are hereby deleted. 
 2.2 Amendment to
Section 2.16(b). Section 2.16(b) is hereby amended by inserting the words “, or if any Lender shall fail to agree to extend the Maturity Date pursuant to Section 2.17 if the Required Lenders have agreed to do so,” after
the word “hereunder,” and before the word “then” in the fourth line thereof. 
 2.3 Amendment to Article II.
Article II is hereby amended to add the following new Section 2.17 to read as follows: 
 “Section 2.17.
Extension of Maturity Date. 
 (a) Not earlier than 90 days prior to, nor later than 30 days prior to, each anniversary
of May 31, 2006, and on not more than two occasions, the Borrower may, upon notice to the Administrative Agent (which shall promptly notify the Lenders), request a one-year extension of the Maturity Date then in effect. Within 30 days of
delivery of such notice, each Lender shall notify the Administrative Agent whether or not it consents to such extension (which consent may be given or withheld in such Lender’s sole and absolute discretion). Any Lender not responding within the
above time period shall be deemed not to have consented to such extension. The Administrative Agent shall promptly notify the Borrower and the Lenders of the Lenders’ responses. 
  

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 (b) The Maturity Date shall be extended only if the Required Lenders (calculated
excluding any Lender in default in its obligation to fund Loans hereunder and prior to giving effect to any replacements of Lenders permitted herein) (the “Consenting Lenders”) have consented thereto. If so extended, the Maturity
Date, as to the Consenting Lenders, shall be extended to the same date in the year following the Maturity Date then in effect (such existing Maturity Date being the “Extension Effective Date”). The Administrative Agent and the
Borrower shall promptly confirm to the Lenders such extension, specifying the date of such confirmation (the “Extension Confirmation Date”), the Extension Effective Date, and the new Maturity Date (after giving effect to such
extension). As a condition precedent to such extension, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Extension Confirmation Date (in sufficient copies for each Lender) signed by a Responsible
Officer of the Borrower (i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such extension and (ii) certifying that, (A) before and after giving effect to such extension, the representations
and warranties contained in Article III made by it are true and correct on and as of the Extension Confirmation Date, except to the extent that such representations and warranties specifically refer to an earlier date, (B) before and after
giving effect to such extension no Default exists or will exist as of the Extension Confirmation Date, and (C) since December 31, 2004, no event, development or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect has occurred. The Borrower shall prepay any Loans outstanding on the Extension Effective Date (and pay any additional amounts required pursuant to Section 2.13) to the extent necessary to keep outstanding Loans ratable with any
revised and new Applicable Percentages of all the Lenders effective as of the Extension Effective Date.” 
 2.4 Amendment to
Section 6.01(f). Section 6.01(f) is hereby amended by: 
 (a) deleting the words “(i) the Consolidated
Interest Coverage Ratio set forth in Section 6.11(a) and (ii)”; and 
 (b) changing the reference to “Section
6.11(b)” therein to “Section 6.11”. 
 2.5 Amendments to Section 6.04(f) and (g). Section 6.04(f) and
(g) are each hereby amended by: 
 (a) deleting the words “, (ii) the Consolidated Interest Coverage Ratio set
forth in Section 6.11(a),”; 
 (b) renumbering “(iii)” to “(ii)”; and 
 (c) changing the reference to “Section 6.11(b)” therein to “Section 6.11”. 
  

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 2.6 Amendment to Section 6.11. Section 6.11 is hereby amended in its entirety to read as
follows: 
 “Section 6.11. Financial Condition Covenants. The MLP will not permit at any time its Consolidated Debt
Coverage Ratio to be in excess of (a) 5.00 to 1.00 for any Rolling Period ending on or before June 30, 2006 and (b) 4.75 to 1.00 for any Rolling Period ending on or subsequent to September 30, 2006; provided that if at any time
the MLP or any of its Subsidiaries consummates an acquisition (including the Acquisition) for which the MLP or any of its Subsidiaries has paid aggregate net consideration of at least $100,000,000, then, for the two Rolling Periods the last day of
which immediately follow the date on which such acquisition is consummated, the numerator of the maximum Consolidated Debt Coverage Ratio otherwise permitted above shall be increased by 0.5; thereafter, compliance shall be determined by reverting
back to clause (a) or (b) above, as applicable.” 
 2.7 Amendment to Section 10.02(b). Clause (v) of
Section 10.02(b) is hereby amended by inserting the words “or Section 2.17” after the words “Section 4.01” and before the word “or” in the second line of such clause (v). 
 Section 3. Conditions Precedent. This Second Amendment shall not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.02 of the Credit Agreement) (the “Effective Date”): 
 3.1 The
Administrative Agent and the Lenders shall have received all fees and other amounts due and payable, if any, in connection with this Second Amendment on or prior to the Effective Date. 
 3.2 The Administrative Agent shall have received from all of the Lenders, the Borrower and the MLP, counterparts (in such number as may be requested by
the Administrative Agent) of this Second Amendment signed on behalf of such Persons. 
 3.3 The Administrative Agent shall have received such
other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. 
 3.4 No Default shall
have occurred and be continuing, after giving effect to the terms of this Second Amendment. 
 Section 4. Miscellaneous.

 4.1 Confirmation. The provisions of the Credit Agreement, as amended by this Second Amendment, shall remain in full force and effect
following the effectiveness of this Second Amendment. 
 4.2 Ratification and Affirmation; Representations and Warranties. The
Borrower and the MLP each hereby (a) acknowledges the terms of this Second Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a
party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, notwithstanding the amendments contained herein and (c) represents and warrants to the Lenders that as of the
date hereof, after giving effect to the terms of this Second Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are 
  

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 true and correct, unless such representations and warranties are stated to relate to a specific earlier date, in which
case, such representations and warranties shall continue to be true and correct as of such earlier date and (ii) no Default has occurred and is continuing. 
 4.3 Loan Document. This Second Amendment is a “Loan Document” as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan Documents
shall apply hereto. 
 4.4 Counterparts. This Second Amendment may be executed by one or more of the parties hereto in any number of
separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. 
 4.5 NO ORAL AGREEMENT. THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN
CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 4.6 GOVERNING LAW. THIS SECOND AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
 [SIGNATURES BEGIN NEXT PAGE] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed as of the
date first written above. 
  

					
	
	VALERO LOGISTICS OPERATIONS, L.P.
		
	By:	 	Valero GP, Inc., its General Partner
			
		 	By:	 	 /s/ Steven A. Blank

		 		 	Steven A. Blank
		 		 	Senior Vice President and
		 		 	Chief Financial Officer
	
	VALERO L.P.
		
	By:	 	Riverwalk Logistics, L.P., its General
		 	Partner
		
	By:	 	Valero GP, LLC, its General Partner
			
		 	By:	 	 /s/ Steven A. Blank

		 		 	Steven A. Blank
		 		 	Senior Vice President and
		 		 	Chief Financial Officer


  

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	 JPMORGAN CHASE BANK, N.A., individually and
 as Administrative Agent

		
	By	 	 /s/ Robert Traband

	Name:	 	Robert Traband
	Title:	 	Vice President


  

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	BARCLAYS BANK PLC, individually and as Syndication Agent
		
	By	 	 /s/ Peter Harrington

	Name:	 	Peter Harrington
	Title:	 	Director


  

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	 MIZUHO CORPORATE BANK, individually and
 as
Co-Documentation Agent

		
	By	 	 /s/ Raymond Ventura

	Name:	 	Raymond Ventura
	Title:	 	Deputy General Manager


  

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	ROYAL BANK OF CANADA, individually and as
	Co-Documentation Agent
		
	By	 	 /s/ Don J. McKinnerney

	Name:	 	Don J. McKinnerney
	Title:	 	Authorized Signatory


  

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	THE ROYAL BANK OF SCOTLAND, plc,
	individually and as Co-Documentation Agent
		
	By	 	 /s/ Matthew Main

	Name:	 	Matthew Main
	Title:	 	Managing Director


  

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	SCOTIABANC INC., individually and as Co-Documentation Agent
		
	By	 	 /s/ William E. Zarrett

	Name:	 	William E. Zarrett
	Title:	 	Managing Director


  

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	SUNTRUST BANK, individually and as Co-Documentation Agent
		
	By	 	 /s/ Peter Panos

	Name:	 	Peter Panos
	Title:	 	Vice President


  

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	THE BANK OF TOKYO-MITSUBISHI, LTD., individually and as Managing Agent
		
	By	 	 /s/ Kelton Glasscock

	Name:	 	Kelton Glasscock
	Title:	 	Vice President & Manager


  

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	BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH
		
	By	 	 /s/ Stephen Christenson

	Name:	 	Stephen Christenson
	Title:	 	First Vice President
		
	By	 	 /s/ Norman McClave

	Name:	 	Norman McClave
	Title:	 	First Vice President


  

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	SUMITOMO MITSUI BANKING CORPORATION,
	individually and as Managing Agent
		
	By	 	 /s/ William M. Ginn

	Name:	 	William M. Ginn
	Title:	 	General Manager


  

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	BANK OF AMERICA, N.A., individually and as
	Co-Agent
		
	By	 	 /s/ Claire Liu

	Name:	 	Claire Liu
	Title:	 	Senior Vice President


  

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	BNP PARIBAS, individually and as
	Co-Agent
		
	By	 	 /s/ Mark A. Cox

	Name:	 	Mark A. Cox
	Title:	 	Director
		
	By	 	 /s/ Larry Robinson

	Name:	 	Larry Robinson
	Title:	 	Director


  

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	CITIBANK, N.A., individually and as
	Co-Agent
		
	By	 	 /s/ Amy K. Pincu

	Name:	 	Amy K. Pincu
	Title:	 	Attorney-in-Fact


  

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	WELLS FARGO BANK, NATIONAL
	ASSOCIATION, individually and as
	Co-Agent
		
	By	 	 /s/ Jo Ann Vasquez

	Name:	 	Jo Ann Vasquez
	Title:	 	Vice President


  

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	LEHMAN BROTHERS BANK, FSB
		
	By	 	 /s/ Janine M. Shugan

	Name:	 	Janine M. Shugan
	Title:	 	Authorized Signatory


  

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	UBS LOAN FINANCE LLC
		
	By	 	 /s/ Richard L. Tavrow

	Name:	 	Richard L. Tavrow
	Title:	 	Director, Banking Products Services, US
		
	By	 	 /s/ Irja R. Otsa

	Name:	 	Irja R. Otsa
	Title:	 	Associate Director, Banking Products Services, US


  

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	MIZUHO CORPORATE BANK (USA)
		
	By	 	 /s/ Raymond Ventura

	Name:	 	Raymond Ventura
	Title:	 	Senior Vice President


  

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	COMPASS BANK
		
	By	 	 /s/ Payton K. Swope

	Name:	 	Payton K. Swope
	Title:	 	Vice President


  

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