As filed with the Securities and Exchange Commission
on February 9, 1995
Registration No. 33-56441
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VALERO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-1244795
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
530 McCullough Avenue
San Antonio, Texas 78215
(210) 246-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
RAND C. SCHMIDT, ESQ.
Secretary
530 McCullough Avenue
San Antonio, Texas 78215
(210) 246-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
R. JOEL SWANSON, ESQ.
Baker & Botts, L.L.P.
910 Louisiana
One Shell Plaza
Houston, Texas 77002-4995
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box.
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. (The box has been checked.)
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Proposed
maximum maximum
Title of each class offering aggregate Amount of
of securities to Amount to be price per offering registration
be registered registered unit (1) price (1) fee (2)
<S> <C> <C> <C> <C>
Debt Securities $250,000,000 (3) 100% (4) $250,000,000 $86,207
</TABLE>
<FN1>
(1) Estimated solely for the purpose of calculating the
registration fee.
<FN2>
(2) The registration fee specified in the table has been
computed on the basis of $250,000,000 principal amount of Debt
Securities covered hereby. The requisite registration fee with
respect to the Debt Securities was paid upon the initial filing
of this Registration Statement on Form S-3 on November 14, 1994.
<FN3>
(3) If any Debt Securities are issued at an original issue
discount, such greater amount as shall result in the Debt
Securities having an aggregate maximum public offering price of
$250,000,000.
<FN4>
(4) Unless otherwise specified in a Prospectus Supplement.
______________
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Subject to completion, dated February 9, 1995
PROSPECTUS $250,000,000
[Logo] VALERO ENERGY CORPORATION
Debt Securities
Valero Energy Corporation (the "Company") may from time to
time offer or solicit offers to purchase its unsecured debt
securities consisting of debentures, notes or other unsecured
evidences of indebtedness in one or more series ("Debt
Securities"), having an aggregate initial offering price not to
exceed US$250,000,000 at prices and on terms to be determined at
the time of offering. All securities issued hereunder will be
issued only for consideration in the form of cash.
All specified terms of the offering and sale of the Debt
Securities will be set forth in one or more supplements to this
Prospectus ("Prospectus Supplement"), including the title,
aggregate principal amount, denominations, maturity, rate of
interest (if any, which may be fixed or variable) or method of
calculation thereof, and time of payment of any interest, the
coin or currency in which principal, premium and interest (if
any) will be payable, any terms for redemption or extension of
maturity at the option of the Company or the holder, any terms
for sinking fund payments, any conversion or exchange rights, any
listing on a securities exchange, the initial public offering
price and any other terms in connection with the offering and
sale of the Debt Securities. The Debt Securities will rank
equally with all other unsecured, unsubordinated indebtedness of
the Company. See "Description of Debt Securities."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Debt Securities may be sold directly to purchasers or
through underwriters, dealers or agents. The Prospectus
Supplement will set forth the names of any underwriters, dealers
or agents involved in the sale of the Debt Securities, the
amounts, if any, to be purchased by underwriters, and the
compensation of such underwriters, dealers or agents. The net
proceeds to the Company from sales of Debt Securities will be set
forth in the Prospectus Supplement and will be the purchase price
of the Debt Securities less attributable issuance expenses,
including underwriters', dealers' or agents' compensation
arrangements. See "Plan of Distribution" for indemnification
arrangements for underwriters, dealers and agents.
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
, 1995.
[The following language shall appear in red ink along the left
margin of the outside front cover page of the Prospectus:]
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy
statements, and other information with the Securities and
Exchange Commission (the "Commission"). The reports, proxy
statements, and other information filed by the Company can be
inspected and copied at the Public Reference Room of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the public reference facilities
maintained by the Commission at Seven World Trade Center, Suite
1300, New York, New York 10048 and at Room 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of the materials can be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Documents filed by the
Company can also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, on
which exchange certain of the Company's securities are listed.
This Prospectus constitutes a part of a Registration
Statement on Form S-3 (the "Registration Statement") filed by the
Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the securities
offered hereby. This Prospectus omits certain of the information
contained in the Registration Statement, as permitted by the
Commission's rules and regulations, and reference is hereby made
to the Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and
the securities offered hereby. Any statements contained herein
concerning the provisions of any document are not necessarily
complete, and in each instance reference is made to the copy of
such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates into this Prospectus by
reference its Annual Report on Form 10-K for the year ended
December 31, 1993 (the "Form 10-K"), its Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1994, June 30, 1994,
and September 30, 1994 and its Current Report on Form 8-K dated
May 31, 1994, as amended by Form 8-K/A filed February 9, 1995.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act,
subsequent to the date of this Prospectus and prior to the
termination of the offering made hereby, shall be deemed
incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of the filing of those documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes that statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain,
without charge, upon written or oral request, a copy of any of
the documents incorporated by reference herein, except for the
exhibits to those documents (other than the exhibits expressly
incorporated by reference into the information that this
Prospectus incorporates). Written requests should be directed
to: Investor Relations, Valero Energy Corporation, P.O. Box 500,
San Antonio, Texas 78292-0500 (telephone 210-246-2000).
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS, IF ANY,
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON ANY EXCHANGES ON WHICH THE
SECURITIES ARE LISTED, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
THE COMPANY
The Company was incorporated under the laws of the State of
Delaware in 1955 and became a publicly held corporation in 1979.
Its principal executive offices are located at 530 McCullough
Avenue, San Antonio, Texas 78215 and its telephone number is
(210) 246-2000.
Through subsidiaries, the Company engages in three
principal businesses: petroleum refining, natural gas operations
and processing of natural gas for the extraction of natural gas
liquids ("NGLs"). The Company's subsidiary, Valero Refining
Company, owns a specialized petroleum refinery (the "Refinery")
in Corpus Christi, Texas, and engages in petroleum refining and
marketing operations. The Refinery can produce over 150,000
barrels per day of refined products, with gasoline and
gasoline-related products comprising approximately 85% of the
Refinery's throughput.
Through Valero Natural Gas Company ("VNGC") and its
subsidiaries, the Company owns and operates natural gas pipeline
systems with approximately 8,000 miles of mainlines, lateral
lines and gathering lines principally serving Texas intrastate
markets. The Company also markets gas throughout the United
States and into Mexico and provides gas transportation services
to third parties. Through VNGC, the Company also owns and
operates 11 natural gas processing plants in Texas which extract
NGLs comprised of ethane, propane, butanes and natural gasoline.
The Company's plants process approximately 1.3 billion cubic feet
of gas per day.
VNGC's natural gas and NGL operations are conducted
primarily through Valero Natural Gas Partners, L.P. and its
subsidiaries (the "Natural Gas Partnership"). Effective May 31,
1994, the Company acquired through a merger (the "Merger") the
approximate 51% effective equity interest in the Natural Gas
Partnership previously owned by the public. As a result of the
Merger, the Company changed its method of accounting for its
investment in the Natural Gas Partnership from the equity method
to the full consolidation method as of May 31, 1994.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth for the periods indicated the
ratio of earnings to fixed charges for the Company. The ratio of
earnings to fixed charges is computed by dividing (i) the sum of
pretax income, amortization of previously capitalized interest,
distributions in excess of/(less than) equity in earnings of the
Natural Gas Partnership (prior to the Merger) and fixed charges
(excluding capitalized interest) by (ii) fixed charges. Fixed
charges consist of total interest, whether expensed or
capitalized, amortization of debt expense and one-third of rents,
which is deemed representative of the interest portion of rental
expense.
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1994 December 31, 1993 Year Ended December 31,
Pro Forma (1) Historical Pro Forma (1) Historical 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges. 1.35x 2.00x 1.62x 2.04x 3.36x 4.00x 5.75x 3.50x
</TABLE>
<FN1>
(1) Assuming that the Company owned 100% of the Natural Gas
Partnership during the period indicated.
USE OF PROCEEDS
The Debt Securities may be offered by the Company from time
to time when the Company determines that market conditions are
favorable. Unless otherwise indicated in the applicable
Prospectus Supplement, the net proceeds from the sale of the Debt
Securities will be added to the Company's funds and used for
general corporate purposes, including the repayment of existing
indebtedness, financing of capital projects and additions to
working capital. The Company expects that it will raise
additional funds from time to time through equity or debt
financings, including borrowings under bank credit agreements.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to
which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement (the
"Offered Debt Securities") and the extent, if any, to which these
general provisions do not apply to the Offered Debt Securities
will be described in the Prospectus Supplement relating to the
Offered Debt Securities. The Offered Debt Securities may contain
any terms and provisions not inconsistent with the Indenture
(hereinafter defined).
The Debt Securities to which this Prospectus relates will
be issued only for consideration in the form of cash, and will be
issued under an Indenture, dated as of March 30, 1992, as
supplemented and amended by a First Supplemental Indenture (the
"First Supplemental Indenture") dated as of February ___, 1995
(the "Indenture"), between the Company and Bankers Trust Company,
as trustee (the "Trustee"). The Indenture is filed as an exhibit
to the Registration Statement. The following summary of certain
provisions of the Indenture do not purport to be complete and are
subject to and are qualified in their entirety by reference to
all the provisions of the Indenture, including its definitions of
certain capitalized terms used herein. Numerical references in
parentheses below are to sections in the Indenture.
General
The Company is primarily a holding company and the Debt
Securities will not be guaranteed by any of the Company's
subsidiaries. Thus, the ability of the Company to pay the
principal of and any premium and interest on the Debt Securities
is largely dependent upon the receipt by the Company of dividends
or other payments from its subsidiaries. (The prior two
sentences will appear in bold face.) Certain of the Company's
subsidiaries are parties to agreements containing net worth
maintenance covenants or other provisions that restrict the
subsidiaries ability to make distributions to the Company. None
of the Company's subsidiaries is prohibited by the Indenture from
entering into agreements limiting its ability to make
distributions to the Company. Furthermore, because the Company's
subsidiary corporations are incorporated in Delaware, they are
subject to the restrictions of Delaware law that permit a
corporation to pay dividends to its stockholders only out of its
surplus or out of its net profits for the current and/or
preceding fiscal year. The Company does not believe, however,
that existing contractual or statutory restrictions should reduce
the level of dividends and other payments that the Company is
able to receive from its subsidiaries below the level necessary
for the Company to meet all of its debt service obligations,
including obligations with respect to any series of Offered Debt
Securities.
The rights of creditors of the Company upon its liquidation,
reorganization, or otherwise are necessarily subject to the prior
claims of lenders and other creditors of the Company's
subsidiaries, except to the extent that claims of the Company
itself as a creditor of any of its subsidiaries may be
recognized. As a result, the Debt Securities will be
structurally subordinated to any indebtedness of the Company's
subsidiaries. Except as described below, the Indenture does not
limit the amount of other indebtedness or securities that may be
issued by the Company or its subsidiaries.
The Indenture does not limit the amount of Debt Securities
that may be issued thereunder. Debt Securities may be issued
under the Indenture from time to time in one or more series up to
the aggregate principal amount that may be authorized by the
Company. All Debt Securities will be unsecured and will rank
pari passu with all other unsecured, unsubordinated indebtedness
of the Company. Unless otherwise specified in the Prospectus
Supplement, the principal and any premium and interest on the
Debt Securities will be payable in U.S. Dollars.
Reference is made to the Prospectus Supplement regarding the
particular series of Offered Debt Securities offered thereby for
the following terms: (i) the designation, aggregate principal
amount, and authorized denominations of the Offered Debt
Securities; (ii) the purchase price of the Offered Debt
Securities (expressed as a percentage of the principal amount
thereof); (iii) the date or dates on which the Offered Debt
Securities will mature; (iv) the rate or rates, if any (which may
be fixed or variable), at which the Offered Debt Securities will
bear interest or the method by which the rate or rates will be
determined; (v) the dates on which any interest will be payable
and the record dates for payment of interest; (vi) the coin or
currency in which payment of the principal of and any premium or
interest on the Offered Debt Securities will be payable; (vii)
the terms of any mandatory or optional redemption (including any
sinking fund) or any obligation of the Company to repurchase
Offered Debt Securities; (viii) the terms of any option of the
Company to extend the stated maturity of the Offered Debt
Securities; (ix) whether the Offered Debt Securities will be
issued in whole or in part in the form of one or more temporary
or permanent global Debt Securities ("Global Securities") and, if
so, the identity of any depositary for the Global Security or
Securities; and (x) any additional provisions or specific terms
not inconsistent with the Indenture applicable to the series of
Offered Debt Securities, including any additional events of
default or specific covenants with respect to the Offered Debt
Securities.
Debt Securities may be presented for exchange, and
registered Debt Securities may be presented for transfer, in the
manner prescribed in the Indenture, the Debt Securities and the
Prospectus Supplement. No service fee will be charged for any
registration of transfer or exchange of the Debt Securities, but
the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith
(Section 305).
Principal, premium and interest (if any) will be payable at
the office or agency of the Company designated for that purpose
in San Antonio, Texas (initially at the offices of the Company),
or in New York City (initially at the office of the Trustee).
Unless otherwise indicated in the Prospectus Supplement, the
Company may act as paying agent for payments of interest (other
than interest payable at the stated maturity of the Debt
Securities) on the Debt Securities in San Antonio, Texas.
Payments of interest (other than interest payable at the stated
maturity of the Debt Securities) may be made at the option of the
Company by check mailed to the registered holders. Upon written
notice to the Trustee on or before the record date for any
interest payment, the interest payment may be made by wire
transfer to an account designated by a registered holder of $1
million or more in aggregate principal amount of Debt Securities
of a series pursuant to arrangements satisfactory to the Trustee
and the Company. Interest, if any, will be payable on any
interest payment date to the persons in whose names the Debt
Securities are registered at the close of business on the record
date (Sections 305, 307 and 1202). Specific details regarding
the payment of principal and any premium and interest on any
series of Offered Debt Securities will be stated in the
Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Debt Securities will be issued only in
fully registered form, without coupons, in denominations of
$1,000 or any integral multiple thereof (Section 302). Some or
all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at
the time of issuance is below market rates) to be sold at a
substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations
applicable to discounted Debt Securities will be described in any
Prospectus Supplement relating thereto.
Neither the Indenture nor any Debt Securities will contain
any provision permitting the holders of the Debt Securities to
require prepayment in the event of a change in the management or
control of the Company, or in the event the Company enters into
one or more highly leveraged transactions, nor are any such
events deemed to be events of default under the terms of the
Indenture or the Debt Securities.
Global Securities
The Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities that will be
deposited with or on behalf of a depositary located in the United
States (the "Depositary"). The Depositary and the specific
depositary arrangements with respect to any Debt Securities of a
series will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following
provisions will apply to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus
Supplement, Debt Securities that are to be represented by a
Global Security to be deposited with or on behalf of the
Depositary will be represented by a Global Security registered in
the name of the Depositary or its nominee. Upon the issuance of
a Global Security in registered form, the Depositary for the
Global Security will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt
Securities represented by the Global Security to the accounts of
institutions that have accounts with the Depositary or its
nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents of the Debt Securities
or by the Company, if the Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in
the Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of
beneficial interests by participants in the Global Securities
will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by the
Depositary or its nominee for the Global Security. Ownership of
beneficial interests in Global Securities by persons that hold
through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only
through, records maintained by such participant. The laws of
some jurisdictions may require that certain purchasers of
securities take physical delivery of the securities in definitive
form. Such limits and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security in
registered form, or its nominee, is the registered owner of the
Global Security, the Depositary or nominee, as the case may be,
will be considered the sole owner or holder of the Debt
Securities represented by the Global Security for all purposes
under the Indenture. Except as set forth below, owners of
beneficial interests in the Global Security will not be entitled
to have Debt Securities of the series represented by the Global
Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities of such
series in definitive form, and will not be considered the owners
or holders thereof under the Indenture.
Payment of principal of, premium and interest (if any) on
Debt Securities registered in the name of or held by a Depositary
or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner or the holder of the
Global Security representing the Debt Securities. Neither the
Company, the Trustee, any paying agent, nor the security
registrar for the Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a Global
Security for the Debt Securities, or for maintaining,
supervising, or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for Debt Securities
of a series represented by a Global Security, upon receipt of any
payment of principal, premium, or interest in respect of a
permanent Global Security, will credit immediately the
participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of
the Global Security as shown on the records of the Depositary.
The Company also expects that payments by participants to owners
of beneficial interests in the Global Security will be governed
by standing instructions and customary practices, as is now the
customary practice with respect to securities held for the
accounts of customers in bearer form or registered in "street
name," and will be the responsibility of the participants.
However, the Company has no control over the practices of the
Depositary or the participants and there can be no assurance that
these practices will not change.
A Global Security may be transferred only as a whole by the
Depositary for the Global Security to a nominee of such
Depositary, or by a nominee of such Depositary to the Depositary
or another nominee of the Depositary, or by the Depositary or any
nominee to a successor of the Depositary or a nominee of the
successor. If a Depositary for Debt Securities of a series is
unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, the
Company will issue Debt Securities in definitive registered form
in exchange for the Global Security or Securities representing
the Debt Securities. In addition, the Company may at any time
and in its sole discretion determine not to have any Debt
Securities in registered form represented by one or more Global
Securities and, in such event, will issue Debt Securities in
definitive form in exchange for the Global Security or Securities
representing the Debt Securities, whereupon, an owner of a
beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Debt Securities of the
series represented by the Global Security equal in principal
amount to its beneficial interest and to have the Debt Securities
registered in its name. (Section 304).
Certain Covenants of the Company
Limitations on Mortgages. The Indenture provides that
neither the Company nor any Subsidiary may create or assume any
mortgage, lien, pledge, security interest or other encumbrance
("Mortgage") upon any of its assets or upon any stock or
indebtedness of any Subsidiary, whether now owned or hereafter
acquired (all property and assets of whatever kind or description
being referred to herein as "property"), without effectively
providing that all Debt Securities then outstanding and
thereafter created under the Indenture (together with, if the
Company so determines, any other indebtedness or obligation then
existing and any other indebtedness or obligation thereafter
created ranking equally with the Debt Securities) will be secured
equally and ratably with (or prior to) any Mortgage as long as
such Mortgage is so secured. The foregoing restriction does not
apply to, among others:
(i) Mortgages securing all or part of the purchase
price of any property (or to refinance all or part of the
purchase price within 12 months of the acquisition of the
property) or to secure a loan made to enable the Company or a
Subsidiary to acquire the property described in the Mortgage;
(ii) Mortgages existing on any property at the time of
its acquisition by the Company or a Subsidiary, whether or not
assumed by the Company or a Subsidiary; Mortgages on property
acquired or constructed by the Company or a Subsidiary and
created not later than 12 months after the acquisition or
completion of construction or commencement of full operation of
the property, whichever is later; and Mortgages on any property
with respect to which the Company or a Subsidiary has made
additions, substantial repairs, alterations or improvements and
created not later than 12 months after completion thereof;
provided, that in the case of any Mortgage described in clause
(i) above or this clause (ii), the principal amount of the
indebtedness secured by such Mortgage, together with all other
indebtedness secured by a Mortgage on the property, does not
exceed the purchase price of the property acquired, the cost of
the property constructed or the cost of additions, repairs,
alterations or improvements, and, except as described in clause
(xi) below, such Mortgage does not extend to or cover any
property other than the property acquired, constructed, repaired,
altered or improved;
(iii) Mortgages created or assumed by the Company
or a Subsidiary on any contract for the sale of any product or
service or any rights thereunder or any proceeds therefrom,
including accounts and other receivables, related to the
operation or use of any property acquired or constructed by the
Company or a Subsidiary and created not later than 12 months
after the acquisition, or completion of construction, or
commencement of full operation of the property, whichever is
later;
(iv) Mortgages existing on any property of an entity at
the time it is acquired by the Company or a Subsidiary, whether
through merger, consolidation, purchase of assets or otherwise;
provided that, except as described in clause (xi) below, the
Mortgage does not extend to any other property of the Company or
its Subsidiaries;
(v) Mortgages incidental to the conduct of the
business of the Company or its Subsidiaries or the ownership of
the property of the Company and its Subsidiaries (including
warehousemen's and attorneys' liens, operators' liens, brokers'
liens, landlords' liens and liens granted in favor of
partnerships or joint ventures or the participants therein) that
were not incurred in connection with the borrowing of money (or
as payment for property) or the obtaining of advances or credit
(other than trade credit, including margin accounts with
brokerage firms), and that do not materially interfere with the
conduct of the business of the Company and of its Subsidiaries
taken as a whole;
(vi) Mortgages on property of any Subsidiary to secure
obligations of the Subsidiary to the Company or to another
Subsidiary; provided that the obligation secured thereby is not
thereafter assigned, sold or otherwise transferred to a Person
other than the Company or a Subsidiary unless otherwise permitted
under the Indenture;
(vii) Mortgages on current assets of the Company or
a Subsidiary created to secure indebtedness and letter of credit
reimbursement obligations incurred in connection with the
extension of working capital financing;
(viii) Mortgages existing on any property of the
Company or any Subsidiary at the date of the Indenture;
(ix) Mortgages incurred in connection with the
borrowing of funds if, within 120 days following the date of such
borrowing, the funds are used to repay indebtedness in the same
(or greater) principal amount secured by other Mortgages (other
than Mortgages referred to in clause (vii) above) on property of
the Company or any Subsidiary having a fair market value at least
equal to the fair market value of the property that secures the
new Mortgage;
(x) Mortgages incurred within 90 days (or any longer
period, not in excess of one year, as permitted by law) after
acquisition of the property subject to the Mortgage arising
solely in connection with certain transfers of tax benefits;
(xi) Mortgages on property constituting substitutions
or replacements for or accessions to property which is encumbered
pursuant to after-acquired property provisions of other permitted
Mortgages; and
(xii) Mortgages on any property of the Natural Gas
Partnership or any Subsidiary thereof existing as of the date of
the First Supplemental Indenture (or property constituting
substitutions or replacements for, or accessions to, property
that is encumbered pursuant to after-acquired property provisions
of the agreements in accordance with which such Mortgages were
granted);
(xiii) renewals, refundings or extensions of any
Mortgage referred to in clauses (i), (ii), (iii), (iv), (viii),
(ix), (x), (xi) or (xii) above; provided that the principal
amount of the indebtedness secured is not increased and the
Mortgage is limited, except as provided in clause (xi) above, to
the same property that secured the prior Mortgage (Section 1205).
Limitations on Sale and Leaseback Transactions. The
Indenture provides that neither the Company nor any Subsidiary
may enter into any arrangement with any Person (other than the
Company or a Subsidiary) providing for the leasing to the Company
or a Subsidiary for a period of more than three years of any
asset that has been or is to be sold or transferred by the
Company or the Subsidiary to such Person or to any other Person
(other than the Company or a Subsidiary), and with respect to
which the funds have been or are to be advanced by the Person on
the security of the leased property (a "Sale and Leaseback
Transaction"), unless either (i) the Company or such Subsidiary
would be entitled, pursuant to the provisions described under
"Limitations on Mortgages" above, to incur debt secured by a
Mortgage on the asset to be leased without equally and ratably
securing the Debt Securities, or (ii) the Company during or
immediately after the expiration of 90 days after the effective
date of the transaction applies to the voluntary retirement of
its funded debt an amount equal to the greater of the net
proceeds of the sale of the property leased in the transaction or
the fair value of the leased property at the time the transaction
was entered into, in each case net of the principal amount of all
Debt Securities delivered for retirement and cancellation under
the Indenture and the principal amount of other funded debt
voluntarily retired by the Company during such 90-day period
(Section 1206).
Exempted Transactions. Notwithstanding the foregoing, the
Company and any one or more Subsidiaries may, without securing
the Debt Securities, issue, assume, or guarantee debt secured by
Mortgages and enter into Sale and Leaseback Transactions that
would otherwise be subject to the foregoing restrictions in an
aggregate principal amount which, together with (i) all other
such debt of the Company and its Subsidiaries secured by
Mortgages that would otherwise be subject to the restrictions on
the creation of Mortgages described under "Limitations on
Mortgages" above (not including Mortgages permitted to be created
under "Limitations on Mortgages" above) and (ii) the aggregate
Attributable Debt (as defined below) in respect of Sale and
Leaseback Transactions (not including those permitted as
described under "Limitations on Sale and Leaseback Transactions"
above), does not exceed, at the time of incurrence thereof, 10%
of Consolidated Net Tangible Assets (as defined below) of the
Company and its consolidated Subsidiaries (Section 1207).
Certain Definitions. The term "Consolidated Net Tangible
Assets" at any date means the total assets shown on a
consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with generally accepted accounting
principles, less (i) all current liabilities (other than current
maturities of long-term debt and notes payable), and (ii)
goodwill and other intangible assets included on such balance
sheet.
The term "Attributable Debt" means (a) for any capitalized
lease obligations, the debt carried on the balance sheet in
accordance with generally accepted accounting principles, and (b)
for any operating leases, the total net amount of rent required
to be paid under such leases during the remaining term thereof
discounted at the rate of 1% per annum plus the weighted average
yield to maturity of all Debt Securities issued and outstanding
under the Indenture, compounded semi-annually.
The term "Subsidiary" means, with respect to any Person, (i)
a corporation of which at least a majority of the outstanding
stock having ordinary voting rights is owned or controlled
directly or indirectly by that Person or (ii) any other Person in
which the Person has directly or indirectly a greater than 50%
equity interest. Notwithstanding the foregoing, neither the
Natural Gas Partnership nor any Subsidiary thereof that may
otherwise be deemed a "Subsidiary" pursuant to the provisions of
the foregoing sentence shall be deemed a "Subsidiary" for any
purposes of the Indenture for any period prior to the date of the
First Supplemental Indenture to the Indenture.
Consolidation, Merger, Conveyance of Assets. The Indenture
provides that the Company may not consolidate with or merge into
any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless (i) the
Person formed by the consolidation or into which the Company is
merged or the Person that acquires such assets is a corporation
organized under the laws of the United States or any State
thereof and such corporation expressly assumes the Company's
obligations under the Indenture and the Debt Securities issued
thereunder, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of
Default, has happened and is continuing and (iii) certain other
conditions are met (Section 1001).
Events of Default
The following are "Events of Default" under the Indenture
with respect to Debt Securities of any series: (i) failure to pay
principal of or any premium on any Debt Security of that series
when due and payable; (ii) failure to pay any interest on any
Debt Security of that series when due and payable, and the
continuation of the default for 30 days; (iii) failure to deposit
any sinking fund payment or analogous obligation in respect of
any Debt Security of that series when due; (iv) failure to
perform any other covenant, or breach of any warranty, of the
Company in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of
Debt Securities other than such series), continued for 60 days
after written notice is given or received as provided in the
Indenture; (v) certain events of bankruptcy, insolvency, or
reorganization; (vi) failure to pay at final maturity or upon the
declaration of acceleration of payment of indebtedness for
borrowed money of the Company or any Subsidiary in excess of $10
million (whether the indebtedness now exists or is hereafter
created) as a result of the occurrence of one or more events of
default as defined in any mortgages, indentures, or instruments
under which such indebtedness may have been issued or by which
the indebtedness may have been secured, and the failure to pay is
not cured or the acceleration is not rescinded, annulled, or
cured, in any case prior to the expiration of 30 days after the
date the failure to pay or acceleration occurred; and (vii) any
other Event of Default provided with respect to Debt Securities
of that series (Section 501). If any Event of Default (except an
Event of Default described in clause (v) above) with respect to
Debt Securities of any series at any time outstanding occurs and
is continuing, either the Trustee or the holders of at least 25%
in aggregate principal amount of the outstanding Debt Securities
of that series may declare the principal amount (or, if the Debt
Securities of that series are discounted Debt Securities, such
portion of the principal amount as may be specified in the terms
of that series) of all the Debt Securities of that series to be
due and payable immediately. If an Event of Default with respect
to Debt Securities of any series at any time outstanding
described in clause (v) above occurs and is continuing, then the
principal amount of all the Debt Securities of such series will
be immediately due and payable without any act on the part of the
Trustee or any holder. At any time after a declaration or
occurrence of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on
acceleration has been obtained, the holders of a majority in
aggregate principal amount of outstanding Debt Securities of that
series may, under certain circumstances, rescind and annul the
acceleration (Section 502).
The Indenture provides that, subject to the duty of the
Trustee during the continuance of an Event of Default to act with
the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders
unless the holders have offered to the Trustee reasonable
indemnity (Section 603). Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of
any series will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series
(Section 512). The Company is required to furnish the Trustee
annually with a statement of the performance by the Company of
certain of its obligations under the Indenture and of any default
in such performance (Section 1208).
Modification and Waiver
The Indenture provides that the Company and the Trustee may
enter into supplemental indentures (which conform to the
provisions of the Trust Indenture Act of 1939) without the
consent of the holders in order to, among other things: (i)
secure any Debt Securities; (ii) evidence the assumption by a
successor Person of the obligations of the Company; (iii) add
further covenants for the protection of the holders or additional
events of default; (iv) cure any ambiguity or correct any
inconsistency in the Indenture, so long as such action will not
adversely affect the interests of the holders; (v) establish the
form or terms of Debt Securities of any series; and (vi) evidence
the acceptance of appointment by a successor trustee (Section
1101).
Modifications of and amendments to the Indenture may also be
made by the Company and the Trustee with the consent of the
holders of not less than a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected by the
modification or amendment; provided that no such modification or
amendment may, without the consent of the holder of each
outstanding Debt Security affected thereby, (i) change the stated
maturity of the principal of or any installment of interest on
any Debt Security, (ii) reduce the principal amount of, or any
premium or interest on, any Debt Security, (iii) reduce the
amount of principal of discounted Debt Securities payable upon
acceleration of the stated maturity thereof, (iv) change the
currency of payment for any Debt Security, (v) impair the right
to institute suit for the enforcement of any payment with respect
to any Debt Security, or (vi) reduce the percentage in principal
amount of outstanding Debt Securities of any series, the consent
of whose holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults (Section 1102).
The holders of a majority in aggregate principal amount of
the outstanding Debt Securities of each series, on behalf of all
holders of Debt Securities of that series, may waive any past
default under the Indenture with respect to Debt Securities of
that series, except a default in the payment of principal,
premium or interest, or in the payment of any sinking fund
installment, or a covenant or provision that cannot be modified
or amended without the consent of the holders of each outstanding
Debt Security affected thereby (Section 513).
Defeasance
The Indenture provides that the Company, at its option, (i)
will be discharged from any and all obligations in respect of any
series of Debt Securities except for certain obligations to
register the transfer or exchange of the Debt Securities; replace
stolen, lost, or mutilated Debt Securities; maintain paying
agencies; and hold money for payment in trust, or (ii) will not
be subject to provisions of the Indenture concerning limitations
upon Mortgages, Sale and Leaseback Transactions and
consolidation, merger, and sale of assets, or (iii) may obtain
the benefits described in both clauses (i) and (ii), in each case
if the Company deposits with the Trustee, in trust, money, or
U.S. Government Obligations (as defined in the Indenture) that
through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount
sufficient to pay all principal, premium and interest on the Debt
Securities of such series on the dates the payments are due in
accordance with the terms of the Debt Securities. To exercise
this option, the Company is required, among other things, to
deliver to the Trustee an opinion of counsel to the effect that
(a) the deposit and related defeasance would not cause the
holders of that series of Debt Securities to recognize income,
gain, or loss for United States federal income tax purposes and
(b) with respect to any such series of Debt Securities then
listed on any national securities exchange, if any, the Debt
Securities would not be delisted from such exchange as a result
of the exercise of such option (Article Four).
Notices
Notices to holders will be given by mail to the addresses of
such holders as they appear in the Security Register (Sections
105 and 703).
Governing Law
The Indenture and the Debt Securities will be governed by
and construed in accordance with the laws of the State of New
York (Section 111).
Concerning the Trustee
Bankers Trust Company is Trustee under the Indenture.
Bankers Trust Company is a party to and serves as agent under
bank loan agreements with the Company and certain of its
Subsidiaries. Bankers Trust Company also serves as one of the
depositaries of funds of, and has other financial relationships
with, the Company and its Subsidiaries.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in the following
ways: (i) through agents, (ii) through underwriters, (iii)
through dealers and (iv) directly to purchasers. Sales of Debt
Securities may be made in or outside the United States. Any
sales of Debt Securities outside the United States will comply
with all applicable laws of the jurisdiction in which any sale of
Debt Securities is made.
The Prospectus Supplement with respect to the Debt
Securities will set forth the terms of the offering of the Debt
Securities, including the name or names of any underwriters,
dealers, or agents, the purchase price of the Debt Securities and
the proceeds to the Company from such sale, any delayed delivery
arrangements, any underwriting discounts and other items
constituting underwriters' compensation, the initial public
offering price, any discounts or concessions allowed or reallowed
or paid to dealers, and any securities exchanges on which the
Debt Securities may be listed. No assurances can be given that
there will be a market for the Debt Securities or, if a market is
created, that it will continue.
If underwriters are used in the sale, the Debt Securities
will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The
Debt Securities may be offered to the public either through
underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as
underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Debt Securities will be named
in the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of the Prospectus
Supplement. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters or agents to
purchase the Debt Securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all
the Debt Securities if any are purchased. The initial public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If dealers are used in the sale of Debt Securities with
respect to which this Prospectus is delivered, the Company will
sell the Debt Securities to the dealers as principals. The
dealers may then resell the Debt Securities to the public at
varying prices to be determined by the dealers at the time of
resale. The names of the dealers and the terms of the
transaction will be set forth in the Prospectus Supplement.
The Debt Securities may be sold directly by the Company or
through agents designated by the Company from time to time at
fixed prices, which may be changed, or at varying prices
determined at the time of sale. Any agent involved in the offer
or sale of the Debt Securities with respect to which this
Prospectus is delivered will be named, and any commissions
payable by the Company to the agent will be set forth, in the
Prospectus Supplement relating thereto. Any such agent will act
on a best efforts basis for the period of its appointment.
In connection with the sale of the Debt Securities,
underwriters or agents may receive compensation from the Company
or from purchasers of Debt Securities for whom they may act as
agents in the form of discounts, concessions, or commissions.
Underwriters, agents, and dealers participating in the
distribution of the Debt Securities may be deemed to be
underwriters, and any discounts or commissions received by them
from the Company and any profit on the resale of the Debt
Securities by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
Debt Securities may be sold directly by the Company to
institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any sales to
institutional investors will be described in the Prospectus
Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company
will authorize agents, underwriters, or dealers to solicit offers
from certain types of institutions to purchase Debt Securities
from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the
future. These contracts will be subject only to those conditions
set forth in the Prospectus Supplement, and the Prospectus
Supplement will set forth the commission payable for solicitation
of the contracts.
Agents, dealers, and underwriters may be entitled under
agreements with the Company to indemnification by the Company
against certain civil liabilities, including liabilities under
the Securities Act, or to contribution with respect to payments
that such agents, dealers, or underwriters may be required to
make with respect thereto. Agents, dealers, and underwriters may
be customers of, engage in transactions with, or perform services
for the Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the Debt Securities will be passed upon
for the Company by Stan L. McLelland, Esq., Executive Vice
President and General Counsel of the Company. Mr. McLelland is
an employee of the Company and at January 31, 1995, beneficially
owned approximately 100,000 shares of the Company's Common Stock
(including shares held under employee benefit plans) and held
options under employee stock option plans of the Company to
purchase approximately 50,000 additional shares of the Company's
Common Stock. None of such shares or options were granted in
connection with the offering of the Debt Securities. Fulbright &
Jaworski L.L.P., Dallas, Texas, will render an opinion to the
Company regarding certain tax matters in connection with the
issuance of the Debt Securities. Certain legal matters in
connection with the Debt Securities will be passed upon for
underwriters, dealers or agents by Baker & Botts, L.L.P.,
Houston, Texas.
EXPERTS
The audited consolidated financial statements and schedules
of the Company contained in the Form 10-K incorporated by
reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports
with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in accounting and auditing
in giving said reports.
The reports of independent auditors relating to the audited
consolidated financial statements and schedules of the Company in
any documents filed pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior
to the termination of the offering will, to the extent covered by
consents thereto filed with the Commission, be incorporated by
reference in reliance upon the authority of such independent
auditors as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by
the Company in connection with the issuance and distribution of
the securities being registered. All the amounts shown are
estimates, except the registration fee.
SEC Registration Fee . . . . . . . . . . .$ 86,207
Printing and Engraving Expenses. . . . . . 20,000
Legal Fees and Expenses. . . . . . . . . . 35,000
Accounting Fees and Expenses . . . . . . . 75,000
Fees and Expenses of Trustee and Counsel . 15,000
Blue Sky Fees and Expenses . . . . . . . . 9,000
Rating Agency Fees . . . . . . . . . . . . 100,000
Miscellaneous. . . . . . . . . . . . . . . 9,793
Total. . . . . . . . . . . . . . . . . .$ 350,000
Item 15. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation (the
"Restated Certificate of Incorporation") contains a provision
that eliminates the personal liability of a director to the
Company and its stockholders for monetary damages for breach of
the director's fiduciary duty to the extent currently allowed
under the Delaware General Corporation Law. Except as provided
below, if a director is found to have breached his or her
fiduciary duty as a director, neither the Company nor its
stockholders could recover monetary damages from the director,
and the only course of action available to the Company's
stockholders would be equitable remedies, including an action to
enjoin or rescind a transaction involving a breach of fiduciary
duty. To the extent certain claims against directors are limited
to equitable remedies, the provision in the Company's Restated
Certificate of Incorporation may reduce the likelihood of
derivative litigation and may discourage stockholders or
management from initiating litigation against directors for
breach of their fiduciary duty. Additionally, equitable remedies
may not be effective in many situations. If a stockholder's only
remedy is to enjoin the completion of the Board of Directors'
action, this remedy would be ineffective if the stockholder does
not become aware of a transaction or event until after it has
been completed. In these situations, it is possible that the
stockholders and the Company would have no effective remedy
against the directors. Under the Company's Restated Certificate
of Incorporation, liability for monetary damages remains for (i)
any breach of the duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) payment of an improper dividend or improper repurchase or
redemption of the Company's stock under Section 174 of the
Delaware General Corporation Law, or (iv) any transaction from
which the director derived an improper personal benefit.
Under Article V of the Restated Certificate of
Incorporation, Article VII of the Company's Bylaws and an
indemnification agreement with the Company's officers and
directors (the "Indemnification Agreement"), each person who is
or was a director or officer of the Company or a subsidiary of
the Company, or who serves or served any other enterprise or
organization at the request of the Company or a subsidiary of the
Company, shall be indemnified by the Company to the full extent
permitted by the Delaware General Corporation Law.
Under the Delaware law, to the extent that a person is
successful on the merits or otherwise in defense of a suit or
proceeding brought against that person by reason of the fact that
he or she is or was a director or officer of the Company, or
serves or served any other enterprise or organization at the
request of the Company, then that person shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred in connection with such action.
Under the Delaware law, the Company generally has the power
to indemnify its present and former directors, officers,
employees and agents against expenses and liabilities incurred by
them in connection with any suit to which they are or are
threatened to be made a party by reason of their office so long
as they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action, they had no
reasonable cause to believe their conduct was unlawful. With
respect to suits by or in the right of the Company, however,
indemnification is generally limited to attorneys' fees and other
expenses, and indemnification is not available if the person is
adjudged to be liable to the Company unless the court determines
that indemnification is appropriate.
The Indemnification Agreement gives directors and officers
specific contractual assurance that indemnification and
advancement of expenses will be available to them regardless of
any amendments to or revocation of the indemnification provisions
of the Company's Bylaws. The Indemnification Agreement provides
for indemnification of directors and officers against both
stockholder derivative claims and third-party claims. Sections
145(a) and 145(b) of the Delaware General Corporation Law, which
grant corporations the power to indemnify directors and officers,
specifically authorize lesser indemnification in connection with
derivative claims than in connection with third-party claims.
The distinction is that Section 145(a), concerning third-party
claims, authorizes expenses and judgments and amounts paid in
settlement (as is provided in the Indemnification Agreement),
while Section 145(b), concerning derivative suits, generally
authorizes only indemnification of expenses. However, Section
145(f) expressly provides that the indemnification and
advancement of expenses provided by or granted pursuant to the
subsections of Section 145 shall not be exclusive of any other
rights to which those seeking indemnification or advancement of
expenses may be entitled under any agreement. No Delaware case
directly answers the question whether Delaware's public policy
would support this aspect of the Indemnification Agreement under
the authority of Section 145(f), or would cause its invalidation
because it does not conform to the distinctions contained in
Sections 145(a) and 145(b). However, Delaware courts have
determined that a corporation can obligate itself, with explicit
contractual wording, to provide advancement of expenses not
otherwise required by statute, and that the public policy of
Delaware does not prevent a corporation from making such advances
mandatory.
Delaware corporations also are authorized to obtain
insurance to protect officers and directors from certain
liabilities, including liabilities against which the corporation
cannot indemnify its directors and officers. The Company
currently has in effect a directors' and officers' liability
insurance policy.
Item 16. Exhibits.
* 1.1 Form of Distribution Agreement among Valero Energy
Corporation, Lehman Brothers Inc., Salomon Brothers
Inc and BT Securities Corporation.
4.1 Form of Indenture between Valero Energy Corporation
and Bankers Trust Company -- incorporated by reference
from Exhibit 4.1 to the Valero Energy Corporation
Registration Statement on Form S-3 (Commission File
No. 33-45457, filed February 4, 1992).
+ 4.2 Form of First Supplemental Indenture to be dated
February ___, 1995, between Valero Energy Corporation
and Bankers Trust Company.
+ 5.1 Opinion of Stan L. McLelland, Esq. with respect to
legality of securities.
+12.1 Computation of ratio of earnings to fixed charges.
*23.1 Consent of Arthur Andersen LLP.
+23.2 Consent of Stan L. McLelland (contained in Exhibit 5.1).
+24.1 Powers of Attorney (contained on page II-5 of the
Registration Statement as originally filed).
+25.1 Form T-1 Statement of Eligibility and Qualification Under
the Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee.
____________________
*Filed herewith.
+Previously filed.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement: (i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act"); (ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; (iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Antonio, State of
Texas, on February 9, 1995.
VALERO ENERGY CORPORATION
(Registrant)
By: /s/ DON M. HEEP
(Don M. Heep)
Senior Vice President and
Chief Financial Officer
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, this Amendment No. 1 to the Registration Statement has been
signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C> <C>
WILLIAM E. GREEHEY* Chairman of the Board and Chief February 9, 1995
William E. Greehey Executive Officer
(Principal Executive Officer),
Valero Energy Corporation
DON M. HEEP* Senior Vice President and February 9, 1995
Don M. Heep Chief Financial Officer
(Principal Financial and
Accounting Officer),
Valero Energy Corporation
EDWARD C. BENNINGER* Director, Valero Energy Corporation February 9, 1995
Edward C. Benninger
ROBERT G. DETTMER* Director, Valero Energy Corporation February 9, 1995
Robert G. Dettmer
A. RAY DUDLEY* Director, Valero Energy Corporation February 9, 1995
A. Ray Dudley
RUBEN M. ESCOBEDO* Director, Valero Energy Corporation February 9, 1995
Ruben M. Escobedo
JAMES L. JOHNSON* Director, Valero Energy Corporation February 9, 1995
James L. Johnson
LOWELL H. LEBERMANN* Director, Valero Energy Corporation February 9, 1995
Lowell H. Lebermann
SUSAN KAUFMAN PURCELL* Director, Valero Energy Corporation February 9, 1995
Susan Kaufman Purcell
By: /s/ RAND C. SCHMIDT
(Rand C. Schmidt,
Attorney-in-Fact of each of
the persons indicated)
</TABLE>
[DRAFT OF FEBRUARY 7, 1995]
$250,000,000
VALERO ENERGY CORPORATION
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
______________, 1995
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
BT Securities Corporation
130 Liberty Street
New York, New York 10006
Dear Sirs:
Valero Energy Corporation, a Delaware corporation (the
"Company"), confirms its agreement with each of you
(individually, an "Agent" and collectively, the "Agents") (which
terms shall, for all purposes of this Agreement, include Lehman
Government Securities Inc., an affiliate of Lehman Brothers Inc.)
with respect to the issuance and sale by the Company of the notes
registered under the Registration Statement referred to in
Section 1(a) below (the "Notes"). The Notes are to be issued
from time to time pursuant to an indenture, dated as of March 30,
1992 and as amended by the First Supplemental Indenture dated as
of ___________________, 1995 (as it may be supplemented or
amended from time to time, the "Indenture"), between the Company
and Bankers Trust Company, as trustee (the "Trustee").
The Notes shall have the maturity ranges, applicable
interest rates or interest rate formulas, issue prices,
redemption and repayment provisions and other terms set forth in
the Prospectus referred to in Section 1(a) as it may be amended
or supplemented from time to time, including any supplement
providing for the terms of a particular issue of the Notes (a
"Pricing Supplement"). The Notes will be issued, and the terms
thereof established, from time to time, by the Company in
accordance with the Indenture and the Procedures (as defined in
Section 2(f) hereof). This Agreement shall apply only to sales
of the Notes and not to sales of any other securities or
evidences of indebtedness of the Company and only on the specific
terms set forth herein.
Subject to the terms and conditions stated herein and
to the reservation by the Company of the right to sell its Notes
directly on its own behalf, the Company hereby (i) appoints each
of the Agents as the agent of the Company for the purpose of
soliciting and receiving offers to purchase Notes from the
Company and (ii) agrees that whenever the Company determines to
sell Notes directly to an Agent as principal it will enter into a
separate agreement (each a "Purchase Agreement"). Each such
Purchase Agreement, whether oral (and confirmed in writing, which
may be by facsimile transmission) or in writing, shall be with
respect to such information (as applicable) as specified in
Exhibit C hereto, relating to such sale in accordance with
Section 2(f) hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to each Agent as of
the date hereof, as of the Closing Date (as defined in Section
2(g) hereof) and as of the times referred to in Sections 6(a) and
6(b) hereof (the Closing Date and each such time being
hereinafter referred to as a "Representation Date"), as follows:
(a) General. A registration statement on Form S-3
(Registration No. 33-56441) with respect to the Notes has been
prepared and filed by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Rules and Regulations (as defined
below) of the Securities and Exchange Commission (the
"Commission") thereunder, and has become effective under the
Securities Act. The Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
As used in this Agreement, (i) "Registration Statement" means
such registration statement when it became effective under the
Securities Act, and as from time to time amended or supplemented
thereafter (if any post-effective amendment to such registration
statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the time the most
recent such amendment has been declared effective by the
Commission); (ii) "Basic Prospectus" means the prospectus
(including the Incorporated Documents (as defined below))
included in the Registration Statement; (iii) "Prospectus" means
the Basic Prospectus (including the Incorporated Documents) and
any amendments or supplements thereto (including the applicable
Pricing Supplement) relating to the Notes, as filed with the
Commission pursuant to paragraph (b) of Rule 424 of the Rules and
Regulations under the Securities Act; (iv) "Incorporated
Document" means any document heretofore or hereafter filed by the
Company pursuant to Section 12, 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to
the termination of the offering of the Notes and incorporated or
deemed to be incorporated by reference in the Registration
Statement and the Prospectus; (v) "Rules and Regulations" means
the rules and regulations adopted by the Commission under either
the Securities Act or the Exchange Act, as applicable; and (vi)
"Subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations under the Securities Act. The Commission has not
issued and, to the best knowledge of the Company, is not
threatening to issue any order preventing or suspending the use
of the Prospectus.
(b) Registration Statement, Prospectus and Indenture:
Contents. The Registration Statement and the Prospectus comply
in all material respects, and the Registration Statement and the
Prospectus will comply in all material respects, as of the
applicable Representation Date and at all times during each
period during which, in the opinion of counsel for the Agents, a
prospectus relating to the Notes is required to be delivered
under the Securities Act (each a "Marketing Period"), with the
requirements of the Securities Act and the Rules and Regulations
thereunder; the Indenture, including any amendments and
supplements thereto, conforms with the requirements of the Trust
Indenture Act and the rules and regulations of the Commission
thereunder; and the Registration Statement and the Prospectus do
not, and will not as of the applicable Representation Date and at
all times during each Marketing Period, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company makes
no representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Agents
specifically for inclusion therein or to any statements in or
omissions from the statement of eligibility and qualification on
Form T-1 of the Trustee under the Trust Indenture Act.
(c) No Defaults. Neither the Company nor any of its
Subsidiaries is in violation of its corporate charter or by-laws
or other constitutive document or in default under any agreement,
indenture or instrument, which default could reasonably be
expected to have a material adverse effect on the business,
properties, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, and no event or
condition has occurred or exists which, with the giving of notice
or the lapse of time or both, would result in any such violation
or default which would have such an effect. Neither the Company
nor any of its Subsidiaries is in violation of any law,
ordinance, governmental rule or regulation or court decree to
which it may be subject, which violation could reasonably be
expected to have a material adverse effect on the business,
properties, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
(d) No Violation. The execution, delivery and
performance by the Company of this Agreement, the Indenture, the
Notes, and each applicable Purchase Agreement, if any, will not
cause a breach of, result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company
or any of its Subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or
instrument, or result in a violation of the corporate charter or
by-laws or other constitutive document of the Company or any of
its Subsidiaries or result in a violation of any existing law,
rule or regulation or any judgment, order or decree of any court
or governmental agency having jurisdiction over the Company, any
of its Subsidiaries or their respective properties.
(e) No Consents Required. Except as required by the
Securities Act, the Trust Indenture Act, the Exchange Act and
applicable state securities laws, no consent, authorization or
order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
performance of the transactions contemplated by this Agreement,
the Notes, each applicable Purchase Agreement, if any, or the
Indenture.
(f) Material Changes or Material Transactions. Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise
stated therein or contemplated thereby, (i) there has not been
any adverse change in the business, properties, financial
condition or results of operations of the Company that materially
adversely affects the Company or the Company and its
Subsidiaries, taken as a whole, and (ii) there has been no
material transaction entered into by the Company or any of its
Subsidiaries other than those in the ordinary course of business.
(g) Accountants. To the knowledge of the Company,
Arthur Andersen LLP, whose report appears in the Company's most
recent Annual Report on Form 10-K, which is incorporated by
reference in the Prospectus, are independent public accountants
with respect to the Company as required by the Securities Act and
the Rules and Regulations thereunder.
(h) Validity of Indenture and Notes. (i) The
Indenture has been duly authorized, executed and delivered by the
Company and constitutes the valid and legally binding obligation
of the Company, enforceable in accordance with its terms (except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law)); (ii) the Notes,
when executed by the Company and authenticated by the Trustee in
accordance with the Indenture and delivered against payment
therefor in accordance with the terms hereof, will have been duly
authorized and validly issued and delivered, and will constitute
valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with
their terms (except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally
and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law)); and (iii) the Notes and the Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(i) Due Incorporation, Formation and Qualification.
Each of the Company and its Subsidiaries that is a corporation
has been duly incorporated and is validly existing in good
standing under the laws of its respective jurisdiction of
incorporation and is duly qualified and in good standing in each
jurisdiction in which its ownership of property or the conduct of
its business requires such qualification (except where the
failure to so qualify would not have a material adverse effect
upon the Company and its Subsidiaries, taken as a whole). Each
of the Company and its Subsidiaries that is a corporation has the
corporate power and authority, and holds all valid permits and
other required authorizations from governmental authorities
necessary, to carry on its business as now conducted and as to be
conducted on each Representation Date (except where the failure
to have such permits would not have a material adverse effect
upon the Company and its Subsidiaries, taken as a whole), and
none of such entities has received any notice relating to the
revocation or modification of any such permits or authorizations
that are singly or in the aggregate material to the Company and
its Subsidiaries, taken as a whole. Each of the Company's
Subsidiaries that is not a corporation is a duly formed and
validly existing limited partnership under the laws of its
jurisdiction of organization, is duly qualified to do business
and is in good standing as a foreign limited partnership in each
jurisdiction in which its ownership of property or the conduct of
its business requires such qualification (except where the
failure so to qualify would not have a material adverse effect
upon the Company and its Subsidiaries, taken as a whole), and has
full power and authority under the laws of its jurisdiction of
organization and its partnership agreement, and holds all valid
permits and other required authorizations from governmental
authorities necessary, to carry on its business as now conducted
and as to be conducted on each Representation Date (except where
the failure to have such permits would not have a material
adverse effect upon the Company and its Subsidiaries, taken as a
whole), and none of such entities has received any notice
relating to the revocation or modification of any such permits or
authorizations that are singly or in the aggregate material to
the Company and its Subsidiaries, taken as a whole.
(j) Authority and Authorization. The Company has all
requisite power and authority to enter into this Agreement and to
issue, sell and deliver the Notes in accordance with and upon the
terms and conditions set forth in this Agreement and the
Registration Statement and the Prospectus. This Agreement has
been duly authorized, executed and delivered by the Company.
(k) Legal Proceedings. Except as described in the
Registration Statement and the Prospectus, there is no action,
suit or proceeding pending before any court, arbitrator or
governmental body, nor, to the knowledge of the Company, is any
such action threatened that (i) could reasonably be expected to
affect the consummation of the transactions contemplated by this
Agreement, (ii) is required to be disclosed in the Registration
Statement or, in the case of any threatened action, would be
required to be so disclosed if such action were pending or (iii)
could reasonably be expected to result in any material adverse
change in the business, properties, financial condition or
results of operations of the Company and its Subsidiaries, taken
as a whole.
(l) Financial Statements. The financial statements
(including the related notes) and selected financial information
included or incorporated by reference in the Registration
Statement or the Prospectus present fairly or, in the case of
information incorporated by reference from documents filed with
the Commission after the date hereof, will present fairly the
financial condition and results of operations and selected
financial information of the entities purported to be shown
thereby at the dates and for the periods indicated and have been
or will be, as the case may be, prepared in accordance with
generally accepted accounting principles applied on a consistent
basis throughout the periods presented (except for changes in the
method of accounting referred to in the notes accompanying such
financial statements), and the supporting schedules of the
Company incorporated by reference in the Registration Statement
or the Prospectus present fairly in all material respects the
information required to be presented therein in relation to the
basic financial statements taken as a whole, subject in each case
to the qualifications, limitations and other information
presented therewith. Certain information and footnote disclosure
normally included in unaudited, quarterly financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the Rules
and Regulations under the Exchange Act.
(m) Incorporated Documents. The Incorporated
Documents, at the time they were filed with the Commission,
complied in all material respects with the requirements of the
Securities Act and the Rules and Regulations thereunder and the
Exchange Act and the Rules and Regulations thereunder. Any
Incorporated Documents hereafter filed will, when they are filed
with the Commission, comply in all material respects with the
requirements of the Securities Act and the Rules and Regulations
thereunder and the Exchange Act and the Rules and Regulations
thereunder.
(n) Exhibits to Registration Statement. There are no
contracts or other documents that are required to be filed as
exhibits to the Registration Statement by the Securities Act or
by the Rules and Regulations thereunder, or which were or are
required to be filed as exhibits to any Incorporated Document by
the Exchange Act or the Rules and Regulations thereunder, which
have not been or will not be filed as exhibits to the
Registration Statement or to such Incorporated Document as
permitted by the Rules and Regulations under the Securities Act
or the Exchange Act, as the case may be. There are no contracts
or other documents that are required to be summarized in the
Prospectus that have not been so summarized.
(o) Holding Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company", a "subsidiary
company" of a "holding company", an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or
a "public utility", as each of such terms is defined in the
Public Utility Holding Company Act of 1935, as amended, and the
rules and regulations thereunder (the "Holding Company Act").
(p) Investment Company Act. The Company is not
required to register under the provisions of the Investment
Company Act of 1940, as amended (the "Investment Company Act"),
and no action need be taken with respect to or under the
Investment Company Act by reason of the issuance of the Notes by
the Company.
(q) Form S-3. The Company meets the eligibility
requirements for the use of Form S-3 under the Securities Act and
the Rules and Regulations thereunder.
(r) Licenses, Approvals and Consents. The Company has
all licenses, approvals and consents for the conduct of its
business the failure of which to have would have a material
adverse effect on the business, properties, financial condition
or results of operations of the Company.
(s) Rating. The Notes have been rated by a
"nationally recognized statistical rating agency" (as that term
is defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act), including one or both of Moody's Investor
Services, Inc. and Standard & Poor's Corporation, in one of its
four highest generic rating categories.
(t) Doing Business with Cuba. The Company confirms as
of the date hereof, and each acceptance by the Company of an
offer to purchase Notes will be deemed to be an affirmation, that
the Company is in compliance with all provisions of Section 1 of
Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of
Doing Business with Disclosure of Doing Business with Cuba, and
the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or
with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information
reported in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in
a form acceptable to the Department.
(u) Ownership of Subsidiaries. All of the outstanding
shares of capital stock or partnership interests of each
Subsidiary of the Company are validly issued and outstanding,
fully paid and nonassessable, and all of such shares or interests
of each such Subsidiary are owned directly or indirectly by the
Company, free and clear of all liens and encumbrances, equities
or claims.
SECTION 2. SOLICITATIONS AS AGENT; PURCHASES AS
PRINCIPAL.
(a) Appointment; Reasonable Best Efforts to Solicit.
Upon the terms and subject to the conditions stated herein, the
Company hereby appoints the Agents as the exclusive agents of the
Company for the purpose of soliciting or receiving offers to
purchase the Notes from the Company by others. On the basis of
the representations and warranties contained herein, but subject
to the terms and conditions herein set forth, each Agent agrees,
as an agent of the Company, to use its reasonable best efforts to
solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus. Except as otherwise
provided herein, so long as this Agreement shall remain in effect
with respect to any Agent, the Company shall not, without the
consent of each such Agent, solicit or accept offers to purchase
Notes otherwise than through one of the Agents; provided,
however, the Company expressly reserves the right to sell Notes
directly to investors and, upon five business days' prior notice
to, and with the prior consent of, the Agents, to appoint other
persons, partnerships or corporations ("Additional Agents") to
act as its agent to solicit offers for the purchase of Notes
pursuant to this Agreement; provided, further, each Additional
Agent shall execute this Agreement and become a party hereto and
thereafter the term "Agent" as used in this Agreement shall mean
the Agents and such Additional Agents.
(b) Suspension of Solicitation. The Company reserves
the right, in its sole discretion, to suspend solicitation of
offers to purchase any or all of the Notes commencing at any time
for any period of time or indefinitely. Upon receipt of at least
one business day's prior written notice from the Company, the
Agents will forthwith suspend solicitation of offers to purchase
Notes from the Company until such time as the Company has advised
the Agents in writing that such solicitation may be resumed. For
the purpose of the foregoing sentence, "business day" shall mean
any day which is not a Saturday or Sunday and which is not a day
on which (i) banking institutions are generally authorized or
obligated by law to close in the City of New York and (ii) The
New York Stock Exchange, Inc. is closed for trading.
Upon receipt of notice from the Company as contemplated
by Section 3(c) hereof, each Agent shall suspend its solicitation
of offers to purchase Notes until such time as the Company shall
have furnished it with an amendment or supplement to the
Registration Statement or the Prospectus, as the case may be,
contemplated by Section 3(c) and shall have advised such Agent
that such solicitation may be resumed.
(c) Agent's Commission. Promptly upon the closing of
the sale of any Notes sold by the Company as a result of a
solicitation made by or offer to purchase received by an Agent,
the Company agrees to pay such Agent a commission in accordance
with the schedule set forth in Exhibit A hereto.
(d) Solicitation of Offers. The Agents are authorized
to solicit offers to purchase the Notes only in denominations as
are specified in the Prospectus at a purchase price as shall be
specified by the Company. Each Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase
Notes received by it as an Agent. The Company shall have the
sole right to accept offers to purchase the Notes and may reject
any such offer in whole or in part. Each Agent shall have the
right, in its discretion reasonably exercised without advising
the Company, to reject any offer to purchase Notes received by
it, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant
to this Agreement shall be deemed to have been purchased and paid
for, or sold by the Company, until such Note shall have been
delivered to the purchaser thereof against payment by such
purchaser.
(e) Purchases as Principal. Each sale of Notes to any
Agent as principal, for resale to one or more investors or to
another broker-dealer (acting as principal for purposes of
resale), shall be made in accordance with the terms of this
Agreement and a Purchase Agreement whether oral (and confirmed in
writing by such Agent to the Company, which may be by facsimile
transmission) or in writing, which will provide for the sale of
such Notes to, and the purchase thereof by, such Agent. A
Purchase Agreement may also specify certain provisions relating
to the reoffering of such Notes by such Agent. The commitment of
any Agent to purchase Notes from the Company as principal shall
be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each
Purchase Agreement shall specify the principal amount and terms
of the Notes to be purchased by an Agent, the time and date (each
such time and date being referred to herein as a "Time of
Delivery") and place of delivery of and payment for such Notes
and such other information (as applicable) as is set forth in
Exhibit C hereto. The Company agrees that if any Agent purchases
Notes as principal for resale such Agent shall receive such
compensation, in the form of a discount or otherwise, as shall be
indicated in the applicable Purchase Agreement or, if no
compensation is indicated therein, a commission in accordance
with Exhibit A hereto. Any Agent may utilize a selling or dealer
group in connection with the resale of such Notes. In addition,
any Agents may offer the Notes they have purchased as principal
to other dealers. Any Agent may sell Notes to any dealer at a
discount. Such Purchase Agreement shall also specify any
requirements for delivery of opinions of counsel, accountant's
letters and officers' certificates pursuant to Section 5 hereof.
(f) Administrative Procedures. Administrative
procedures respecting the sale of Notes (the "Procedures") are
set forth in Exhibit B hereto and may be amended in writing from
time to time by the Agents and the Company. Each Agent and the
Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and
in the Procedures. The Procedures shall apply to all
transactions contemplated hereunder including sales of Notes to
any Agent as principal pursuant to a Purchase Agreement, unless
otherwise set forth in such Purchase Agreement.
(g) Delivery of Documents. The documents required to
be delivered by Section 5 hereof shall be delivered at the
offices of Lehman Brothers Inc., 3 World Financial Center, New
York, New York, not later than 10:00 A.M., New York City time, on
the date of this Agreement or at such other place or at such
later time as may be mutually agreed upon by the Company and the
Agents, which later time shall in no event be later than the time
at which the Agents commence solicitation of offers to purchase
Notes hereunder (the "Closing Date").
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Agent that:
(a) Delivery of Signed Registration Statement. The
Company shall furnish promptly to the Agents and to their counsel
a signed copy of the Registration Statement as originally filed
and each amendment or supplement thereto, all Incorporated
Documents and all consents and exhibits filed therewith.
(b) Delivery of Other Documents. The Company shall
deliver promptly to the Agents, and in such number as they may
reasonably request, each of the following documents: (i)
conformed copies of the Registration Statement (excluding
exhibits other than the computation of the ratio of earnings to
fixed charges, the Indenture and this Agreement and such other
exhibits that the Agents may reasonably request), (ii) the Basic
Prospectus, (iii) the Prospectus and (iv) all Incorporated
Documents.
(c) Revisions to Prospectus Material Changes. If,
during any Marketing Period, any event occurs as a result of
which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply
with the Securities Act, the Company shall notify the Agents
promptly, in writing, to suspend solicitation of purchases of the
Notes; and if the Company decides to amend or supplement the
Registration Statement or the Prospectus, the Company shall
promptly advise the Agents by telephone (with confirmation in
writing) and shall promptly prepare and file with the Commission
an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance;
provided, however, that if during the period referred to above
any Agent shall own any Notes which it has purchased from the
Company as principal with the intention of reselling them, the
Company shall promptly prepare and timely file with the
Commission any amendment or supplement to the Registration
Statement or the Prospectus that may, in the judgment of the
Company or the Agents, be required by the Securities Act or
requested by the Commission.
(d) Commission Filings. The Company shall, during any
Marketing Period, timely file with the Commission all documents
(and any amendments to previously filed documents) required to be
filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act. The Company shall prepare and file
with the Commission, promptly upon the request of the Agents, any
amendments or supplements to the Registration Statement or
Prospectus that, in the opinion of the Agents, may be reasonably
necessary or advisable in connection with the distribution of the
Notes.
(e) Notice of Certain Proposed Filings. The Company
shall give prompt written notice to the Agents of any proposal to
file or prepare any additional registration statement with
respect to the registration of additional Notes, any amendment to
the Registration Statement, any amendment or supplement to the
Prospectus, or any Incorporated Document or any amendment or
supplement to any such Incorporated Document, and shall furnish
the Agents with preliminary copies of any such amendment or
supplement or other documents proposed to be filed or prepared a
reasonable time in advance of such proposed filing or
preparation, as the case may be.
(f) Notice to Agents of Certain Events. The Company
shall advise the Agents immediately (i) when any post-effective
amendment to the Registration Statement relating to or covering
the Notes becomes effective, (ii) of any request or proposed
request by the Commission for an amendment or supplement to the
Registration Statement, to the Prospectus, to any Incorporated
Document or for any additional information related to the
Registration Statement, (iii) of the issuance by the Commission
or any state or other regulatory body of any stop order or other
order suspending the effectiveness of the Registration Statement
or any part thereof or of any order directed to the Prospectus or
any Incorporated Document or of any challenge by the Commission,
any state or other regulatory body of the accuracy or adequacy of
any Incorporated Document or of any order suspending the
qualification of the Notes for offering or sale in any
jurisdiction or of the initiation or threat of any proceeding for
any such purpose and (iv) of any downgrading in the rating of the
Notes or any other debt securities of the Company, or any
proposal to downgrade the rating of the Notes or any other debt
securities of the Company, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no
implication of a possible downgrading of such rating) as soon as
the Company learns of any such downgrading, proposal to downgrade
or public announcement.
(g) Stop Orders. The Company shall use its best
efforts to prevent the issuance by the Commission or any state or
other regulatory body of any stop order or other such order and
should a stop order or other such order be issued, to obtain as
soon as possible the lifting thereof.
(h) Earnings Statements. The Company shall, as soon
as practicable, but not later than 18 months after the date of
each acceptance by the Company of an offer to purchase Notes
hereunder, make generally available to its security holders an
earnings statement covering a period of at least 12 months
beginning after the later of (i) the effective date of the
Registration Statement, (ii) the effective date of the most
recent post-effective amendment to the Registration Statement to
become effective prior to the date of such acceptance and (iii)
the date of the Company's most recent Annual Report on Form 10-K
filed with the Commission prior to the date of such acceptance
which will satisfy the provisions of Section 11(a) of the
Securities Act (including, at the option of the Company, through
reliance upon Rule 158(a) of the Rules and Regulations under the
Securities Act).
(i) Copies of Reports, Releases and Financial
Statements. For a period of not less than one year following the
last sale of a Note, to furnish to the Agents, promptly after the
same are filed, copies of all public reports or releases and all
reports and financial statements filed by the Company with the
Commission pursuant to the Exchange Act or any Rule or Regulation
thereunder.
(j) Blue Sky Qualifications. The Company shall take,
or cause to be taken, all necessary action and furnish to
whomever the Agents may direct such information as may be
required in qualifying the Notes for offering and sale under the
laws of such jurisdictions which the Agents shall designate, and
to continue such qualifications in effect for as long as may be
necessary for the distribution of the Notes unless the Agents
agree that such action is not necessary or advisable; except that
in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation or to execute a
general consent to service of process in any such jurisdiction.
(k) Holdback. Between the date of a Purchase
Agreement and the date of delivery of the Notes with respect
thereto, the Company will not offer or sell, or enter into any
agreement to sell, any of its debt securities, other than
borrowings under the Company's revolving credit agreements and
lines of credit, the private placement of securities and
issuances of its commercial paper.
(l) Pricing Supplement. The Company shall prepare,
with respect to any Notes to be sold through or to the Agents
pursuant to this Agreement, a Pricing Supplement with respect to
such Notes in a form previously approved by the Agents and to
file such Pricing Supplement pursuant to Rule 424 under the
Securities Act with the Commission.
SECTION 4. PAYMENT OF EXPENSES.
The Company will pay:
(i) the costs incident to the authorization, issuance, sale
and delivery of the Notes and any taxes payable in that
connection,
(ii) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement,
the Prospectus and any amendments and exhibits thereto,
(iii) the costs incident to the preparation, printing
and filing of any document and any amendments and exhibits
thereto required to be filed by the Company under the Exchange
Act,
(iv) the costs of distributing the Registration Statement,
as originally filed, and each amendment and post-effective
amendment thereto (including exhibits), the Basic Prospectus, the
Prospectus, any supplement or amendment to the Prospectus and any
Incorporated Documents,
(v) the fees and disbursements of the Trustee, any paying
agent, any calculation agent, any exchange rate agent and any
other agents appointed by the Company in connection with the sale
of the Notes, and their respective counsel,
(vi) the cost and fees in connection with any filings with
the National Association of Securities Dealers, Inc. in
connection with the sale of the Notes,
(vii) the fees and disbursements of the Company's
accountants and of counsel to the Company, and the reasonable
fees and disbursements of counsel to the Agents,
(viii) the fees paid to rating agencies in connection
with the rating of the Notes,
(ix) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in
Section 3(j) hereof and of preparing and printing a Blue Sky
Memorandum and a memorandum concerning the legality of the Notes
as an investment (including fees and expenses of counsel for the
Agents in connection therewith),
(x) all advertising expenses in connection with the
offering of the Notes incurred with the written consent of the
Company, and
(xi) all other costs and expenses incident to the
performance of the Company's obligations under this Agreement.
SECTION 5. CONDITIONS OF OBLIGATIONS OF AGENTS.
The obligation of the Agents, as agents of the Company,
under this Agreement to solicit offers to purchase the Notes, the
obligation of any person who has agreed to purchase Notes to make
payment for and take delivery of Notes, and the obligation of any
Agent to purchase Notes pursuant to any Purchase Agreement, is
subject to the accuracy on each Representation Date of the
representations and warranties of the Company contained herein,
to the accuracy of the statements of the Company's officers made
in any certificate furnished pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder,
and to each of the following additional terms and conditions:
(a) Registration Statement. The Prospectus as amended
or supplemented (including the Pricing Supplement) with respect
to such Notes shall have been filed with the Commission pursuant
to Rule 424(b) under the Securities Act within the applicable
time period prescribed for such filing by the Rules and
Regulations and in accordance with Section 3(l) hereof; no stop
order or other order suspending the effectiveness of the
Registration Statement or any part thereof nor any order directed
to any Incorporated Document or any order suspending the
qualification of the Notes for offering or sale in any
jurisdiction shall have been issued and no stop order proceeding
or other proceeding for any such purpose shall have been
initiated or threatened by the Commission or any state or other
regulatory body and no challenge shall have been made to the
accuracy or adequacy of any Incorporated Document; any request of
the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have
been complied with; and the Company shall not have filed with the
Commission any amendment or supplement to the Registration
Statement or the Prospectus or any Incorporated Document without
the consent of the Agents.
(b) No Suspension of Sale of the Notes. No order
suspending the sale of the Notes in any jurisdiction designated
by the Agents pursuant to Section 3(j) hereof shall have been
issued, and no proceeding for that purpose shall have been
initiated or threatened.
(c) No Material Omissions or Untrue Statements. No
Agent shall have discovered and disclosed to the Company that the
Registration Statement or the Prospectus or any Incorporated
Document contains an untrue statement of a fact which, in the
opinion of the Agents, is material, or omits to state a fact
which, in the opinion of the Agents, is material and is required
to be stated therein or is necessary to make the statements
therein not misleading.
(d) Legal Matters Satisfactory to Counsel. All
corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Notes,
the Indenture, the form of the Registration Statement, each
Prospectus (other than financial statements and other financial
data) and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all
respects to counsel for the Agents and the Company shall have
furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(e) Opinion of Stan L. McLelland, Esq. At the Closing
Date, the Agents shall have received the opinion, addressed to
the Agents and dated the Closing Date, of Stan L. McLelland,
Esq., Executive Vice President and General Counsel of the
Company, in form and substance satisfactory to the Agents and
their counsel, to the effect that:
(i) Each of the Company and its Subsidiaries that is a
corporation has been duly incorporated and is validly existing in
good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which
its ownership of property or the conduct of its business requires
such qualification (except where the failure to so qualify would
not have a material adverse effect upon the Company and its
Subsidiaries taken as a whole), and each has all corporate power
and authority necessary to own or hold its properties and to
conduct the business in which it is engaged.
(ii) Each of the Company's Subsidiaries that is not a
corporation is a duly formed and validly existing limited
partnership under the laws of the jurisdiction of its
organization, is duly qualified to do business and is in good
standing as a foreign limited partnership in each jurisdiction in
which it owns or leases a material amount of property or conducts
a material amount of business so as to require such registration
or qualification (except where the failure to so qualify would
not have a material adverse effect upon the Company and its
Subsidiaries taken as a whole) and has full power and authority
under the laws of the jurisdiction of its organization and its
respective partnership agreement to own or hold its properties
and to conduct the business in which it is engaged.
(iii) All of the outstanding shares of capital stock or
partnership interests of each of the Subsidiaries of the Company
are validly issued and outstanding, fully paid and nonassessable
and are wholly owned by the Company free and clear of any
security interest perfected under the Uniform Commercial Code,
and, to such counsel's knowledge, any liens, claims or
encumbrances.
(iv) The Registration Statement is effective under the
Securities Act, and, to the knowledge of such counsel, no stop
order suspending its effectiveness has been issued and no
proceeding for that purpose is pending or threatened by the
Commission. Any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b).
(v) To the knowledge of such counsel, no order of the
Commission directed to any Incorporated Document has been issued,
and no challenge by appropriate proceedings has been made to the
accuracy or adequacy of any Incorporated Document.
(vi) The Company has filed all documents and amendments to
previously filed documents required to be filed by it pursuant to
Section 12, 13, 14 or 15(d) of the Exchange Act, which are or
would constitute, if so filed, Incorporated Documents.
(vii) The statements in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 [headings
to be updated for 1994 10-K] (the "Form 10-K") (as modified by
any subsequent filings under the Exchange Act or by the
Registration Statement) under the captions "Business -- Recent
Developments," "Business -- Valero Natural Gas Partners, L.P. --
Natural Gas Pipelines," "Business -- Other Natural Gas
Operations," "Business -- Governmental Regulations," "Business --
Environmental Matters" and "Legal Proceedings," insofar as they
are, or refer to, statements of law or legal conclusions, are, as
so modified, fair and accurate in all material respects.
(viii) Such counsel does not know of any contracts or
other documents that are required to be filed as exhibits to the
Registration Statement by the Securities Act or the Rules and
Regulations thereunder that have not been filed as exhibits to
the Registration Statement or incorporated therein by reference
as permitted by the Rules and Regulations thereunder; such
counsel does not know of any contracts or other documents that
are required by the Exchange Act or by the Rules and Regulations
thereunder to be filed as exhibits to the Form 10 K or any other
Incorporated Document, as the case may be, that have not been
filed as exhibits to the Form 10-K or any other Incorporated
Document, as the case may be, or incorporated therein by
reference as permitted by the rules and regulations under the
Exchange Act.
(ix) The Registration Statement and the Prospectus and each
amendment or supplement thereto comply as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations thereunder (except that no opinion need be
expressed as to the financial statements and other financial and
statistical data contained therein); the Incorporated Documents
comply as to form in all material respects with the requirements
of the Exchange Act and the Rules and Regulations thereunder
(except that no opinion need be expressed as to the financial
statements and other financial and statistical data contained
therein).
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with
its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(xii) The Notes are in a form contemplated by the
Indenture and have been duly authorized and, when executed by the
Company and authenticated by the Trustee in accordance with the
Indenture and delivered against payment therefor in accordance
with the terms hereof, will have been validly issued and
delivered, and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable
principles (regardless of whether enforceability is considered in
a proceeding in equity or at law).
(xiii) The Notes and the Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus. The statements made in the Prospectus under the
caption "Description of the Debt Securities" and in the
Prospectus Supplement under the caption "Description of Notes,"
insofar as they purport to summarize the provisions of documents
or agreements specifically referred to therein, fairly present
the information called for with respect thereto by Form S-3 under
the Securities Act.
(xiv) The Indenture is qualified under the Trust
Indenture Act.
(xv) Such counsel does not know of any litigation or
governmental proceeding pending or threatened against the Company
or any of its Subsidiaries that would affect the subject matter
of this Agreement or is required to be disclosed in the
Prospectus that is not disclosed and correctly summarized therein
in all material respects (except that no opinion need be
expressed as to the adequacy of any legal defenses or the
ultimate outcome of any such litigation or governmental
proceeding).
(xvi) Neither the Company nor any of its Subsidiaries is
a "holding company", a "subsidiary company" of a "holding
company", an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", or a "public
utility", as each of such terms is defined in the Holding Company
Act.
(xvii) The execution, delivery and performance by the
Company of this Agreement, the Indenture, the Notes, and each
applicable Purchase Agreement, if any, will not cause a breach
of, result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument, known to such
counsel, relating to borrowed money, or any other material
agreement known to such counsel, or result in a violation of the
corporate charter or by-laws or other constitutive document of
the Company or any of its Subsidiaries or result in a violation
of any existing law, rule or regulation, or, to the knowledge of
such counsel, any judgment, order or decree of any court or
governmental agency having jurisdiction over the Company or any
of its Subsidiaries or their property; and no consent,
authorization or order of, or filing or registration with, any
court or governmental agency is required for the execution,
delivery and performance by the Company of this Agreement, the
Indenture, the Notes, and each applicable Purchase Agreement, if
any, except such as may be required by the Securities Act, the
Exchange Act, the Trust Indenture Act and state securities laws.
(xviii) To the knowledge of such counsel, the Company and
its Subsidiaries have, in all material respects, such licenses,
authorizations and permits from all federal and state
governmental authorities as are required to own and operate their
respective businesses.
(xix) To the knowledge of such counsel, neither the
Company nor any of its Subsidiaries is in violation of its
corporate charter or by-laws or other constitutive document or in
default under any agreement, indenture or instrument, the effect
of which violation or default is reasonably likely to be material
to the Company and its Subsidiaries taken as a whole.
(xx) To the knowledge of such counsel, neither the Company
nor any of its Subsidiaries is in violation of any law,
ordinance, governmental rule or regulation or court decree to
which it may be subject, the effect of which violation is
reasonably likely to be material to the Company and its
Subsidiaries taken as a whole.
(xxi) The Company meets the eligibility requirements for
the use of Form S-3 under the Securities Act and the Rules and
Regulations thereunder.
In addition, such counsel shall state that no facts have come to
such counsel's attention that lead such counsel to believe that
either the Registration Statement or the Prospectus (including
any Incorporated Documents) or any amendment or supplement
thereto (other than the expertized portions thereof, including,
without limitation, the financial statements and other financial,
geological and statistical information contained therein, as to
which such counsel need not comment), both as of their respective
effective or issue dates and as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading. Such letter may also
state that such counsel does not pass upon or assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus (except, to the extent set forth therein, for the
statements referred to in paragraphs (vii), (viii), (xiii) and
(xv)) and makes no representation that he has independently
verified the accuracy, completeness or fairness of such
statements.
(f) Opinion of Fulbright & Jaworski L.L.P. At the
Closing Date, the Agents shall have received the opinion,
addressed to the Company and dated the Closing Date, of Fulbright
& Jaworski L.L.P., in the form filed as Exhibit 8.1 to the
Registration Statement. Such opinion shall state that the Agents
may rely upon such opinion as if it were addressed to them.
(g) Opinion of Baker & Botts, L.L.P. At the Closing
Date, the Agents shall have received from Baker & Botts, L.L.P.,
counsel to the Agents, such opinion or opinions with respect to
the validity of the Notes and other related matters as they may
reasonably request and such counsel shall have received and may
rely upon such documents and information as they request to
enable them to pass upon such matters.
(h) Officers' Certificate. On the Closing Date, the
Company shall have furnished to you a certificate, dated such
Closing Date and addressed to you, signed by the Chairman of the
Board, the President, the principal financial officer or the
Treasurer of the Company, in his capacity as such, to the effect
that: (i) the representations and warranties of the Company
contained in this Agreement are true and correct as if made at
and as of the Closing Date; (ii) the Company has in all material
respects complied with all the agreements and satisfied all the
conditions on its part to be complied with or satisfied at or
before the Closing Date; (iii) to the knowledge of such officer,
no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has
been initiated or threatened; and (iv) to the knowledge of such
officer, since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or the
Prospectus which has not been so set forth.
(i) Accountants' Letter. On the Closing Date, Arthur
Andersen LLP shall have furnished to the Agents a letter, dated
the Closing Date and addressed jointly to the Company and the
Agents, in form and substance reasonably satisfactory to the
Agents confirming that they are independent public accountants
within the meaning of the Securities Act and the Rules and
Regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules examined by them and included or
incorporated in the Registration Statement and the Prospectus and
reported on by them comply in form in all material respects with
the applicable accounting requirements of the Securities Act and
the related published Rules and Regulations thereunder;
(ii) on the basis of (a) a reading of the latest unaudited
consolidated financial statements, if any, made available by the
Company and its Subsidiaries; (b) carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in
such letter; (c) a reading of the minutes of the meetings of the
stockholders, directors and committees of the Company and its
Subsidiaries; and (d) inquiries made of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its Subsidiaries as to transactions
and events subsequent to the date of the most recent audited
financial statements included or incorporated in the Prospectus,
nothing came to their attention which caused them to believe
that:
(A) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus do
not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act;
(B) any material modifications should be made to said
unaudited financial statements for them to be in conformity with
generally accepted accounting principles;
(C) the unaudited capsule information, if any, included in
the Prospectus does not agree with the amounts set forth in the
unaudited consolidated financial statements from which it was
derived or was not determined on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus; or
(D) with respect to the period subsequent to December 31,
1994, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the preferred or
common stock or any increases in long-term debt of the Company
and its Subsidiaries or any decreases in consolidated net assets
as compared with the amounts shown on the December 31, 1994
balance sheet included or incorporated in the Registration
Statement and the Prospectus, or for the period from January 1,
1995 to such specified date, there were any decreases, as
compared with the corresponding period of the previous year, in
consolidated operating income, or in the total or per share
amounts of consolidated net income of the Company and its
Subsidiaries, except in all instances for changes, increases or
decreases set forth in such letter;
(iii) they have performed certain other specified
procedures to determine that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its Subsidiaries)
included or incorporated in the Registration Statement and the
Prospectus and in Exhibit 12.1 to the Registration Statement
agrees with the accounting records of the Company and its
Subsidiaries, excluding any questions of legal interpretation;
and
(iv) on the basis of (a) a reading of the pro forma
financial statements, if any; (b) carrying out certain specified
procedures; (c) inquiries made of certain officials of the
Company who have responsibility for financial and accounting
matters; and (d) proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements.
All financial statements and schedules included in the
material incorporated by reference into the Prospectus shall be
deemed included in the Prospectus for purposes of this paragraph
(i). References to the Prospectus in this paragraph (i) include
any supplement thereto at the date of the letter.
(j) Additional Conditions. There shall not have
occurred: (i) since the date of filing of the Company's most
recent quarterly or annual report under the Exchange Act any
change in the capital stock or long-term debt of the Company or
any of its Subsidiaries or any change, or any development
involving a prospective change, in or affecting the general
affairs, management, stockholders' equity, business, properties,
condition (financial or other), results of operations or
prospects of the Company and its Subsidiaries which in the
opinion of the Agents, materially impairs the investment quality
of the Notes; (ii) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange or the
American Stock Exchange or the over-the-counter market or the
establishment of minimum prices on either of such exchanges or
such market by the Commission; (iii) a general moratorium on
commercial banking activities declared by federal or New York
State authorities; (iv) any downgrading in the rating accorded
the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (v) any
outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any
other substantial national calamity or emergency; or (vi) any
material adverse change in the existing financial, political or
economic conditions in the United States, including any effect of
international conditions on the financial markets in the United
States, that in the judgment of the Agents makes it impracticable
or inadvisable to proceed with the solicitation of offers to
purchase Notes or the purchase of Notes from the Company as
principal pursuant to the applicable Purchase Agreement, as the
case may be.
(k) Other Information and Documentation. Prior to the
Closing Date, the Company shall have furnished to the Agents such
further information, certificates and documents as the Agents or
counsel to the Agents may reasonably request.
All such opinions, certificates, letters and documents
shall be in compliance with the provisions hereof only if they
are reasonably satisfactory to the Agents and their counsel. Any
certificate signed by an officer of the Company and delivered to
the Agents pursuant hereto shall be deemed to be a representation
and warranty of the Company to the Agents as to the statements
made therein. The Company shall furnish to the Agents conformed
copies of such opinions, certificates, letters and other
documents in such number as the Agents shall reasonably request.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Agent that:
(a) Acceptance of Offer Affirms Representations and
Warranties. The Company agrees that during each Marketing
Period, each acceptance by the Company of an offer for the
purchase of Notes shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement and in
any certificate theretofore given to the Agents pursuant hereto
are true and correct at the time of such acceptance, and a
covenant that such representations and warranties will be true
and correct at the time of delivery to the purchaser or his agent
of the Notes relating to such acceptance as though made at and as
of each such time (it being understood that such representations
and warranties shall relate to the Registration Statement and the
Prospectus as amended or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates.
The Company agrees that during each Marketing Period, each time
that the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement
providing solely for the interest rates or maturities of the
Notes or the principal amount of Notes remaining to be sold or
similar changes), each time the Company sells Notes to an Agent
as principal and the applicable Purchase Agreement specifies the
delivery of an officers' certificate under this Section 6(b) as a
condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any
Incorporated Document, the Company shall, (i) concurrently with
such amendment, supplement or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, on
the first day of the next succeeding Marketing Period, furnish
the Agents and their counsel with a certificate, dated the date
of delivery thereof, of the Chairman of the Board, the President
or the principal financial officer of the Company, in his
capacity as such, in form satisfactory to the Agents, to the
effect that the statements contained in the certificate referred
to in Section 5(h) hereof which was last furnished to the Agents
are true and correct at the time of such amendment, supplement or
filing, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, the
Company may submit to the Agents a certificate of the same tenor
as the certificate referred to in Section 5(h), modified as
necessary to relate to the Registration Statement and each
Prospectus as amended and supplemented to the time of delivery of
such certificate.
(c) Subsequent Delivery of Legal Opinion. The Company
agrees that during each Marketing Period, each time that the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement providing solely
for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar
changes), each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the
delivery of a legal opinion under this Section 6(c) as a
condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any
Incorporated Document, the Company shall, (i) concurrently with
such amendment, supplement or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, on
the first day of the next succeeding Marketing Period, furnish
the Agents and their counsel with the written opinion of the
General Counsel of the Company addressed to the Agents and dated
the date of delivery of such opinion, in form satisfactory to the
Agents, to the same effect as the opinion referred to in Section
5(e) hereof, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended or
supplemented to the time of delivery of such opinion; provided,
however, that in lieu of such opinion, such counsel may furnish
the Agents with a letter to the effect that the Agents may rely
on such prior opinion to the same extent as though it were dated
the date of such letter authorizing reliance (except that
statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or
supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Accountant's Letters. The
Company agrees that during each Marketing Period, each time that
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, each
time the Company sells Notes to an Agent as principal and the
applicable Purchase Agreement specifies the delivery of a letter
under this Section 6(d) as a condition to the purchase of Notes
pursuant to such Purchase Agreement or the Company files with the
Commission any Incorporated Document which contains additional
financial information, the Company shall cause Arthur Andersen
LLP (or other independent accountants of the Company reasonably
acceptable to the Agents) to furnish the Agents, (i) concurrently
with such amendment, supplement or filing or (ii) if such
amendment, supplement or filing was not filed during a Marketing
Period, on the first day of the next succeeding Marketing Period,
a letter, addressed jointly to the Company and the Agents and
dated the date of delivery of such letter, in form and substance
reasonably satisfactory to the Agents, to the same effect as the
letter referred to in Section 5(i) hereof but modified to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the date of such letter, with such changes as may
be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the
Company; provided, however, that if the Registration Statement or
the Prospectus is amended or supplemented solely to include
financial information as of and for a fiscal quarter, such
accountants may limit the scope of such letter to the unaudited
financial statements included in such amendment or supplement
unless there is contained therein any other accounting, financial
or statistical information that, in the reasonable judgment of
the Agents, should be covered by such letter, in which event such
letter shall also cover such other information.
(e) Subsequent Deliveries on Settlement Date. On any
settlement date for the sale of Notes, the Company shall, if
requested by the Agent that solicited or received the offer to
purchase any Notes being delivered on such settlement date,
furnish such Agent with (i) a certificate of the Chairman of the
Board, the President, the principal financial officer or the
Treasurer of the Company, in his capacity as such, to the effect
set forth in Section 5(h) hereof, (ii) a written opinion of the
General Counsel of the Company to the effect set forth in Section
5(e) hereof, and (iii) an accountant's letter of Arthur Andersen
LLP (or other independent accountants of the Company reasonably
acceptable to the Agents) to the effect set forth in Section 5(i)
hereof, all dated such settlement date and in form satisfactory
to such Agent, but modified, as necessary, to relate to the
Prospectus relating to the Notes to be delivered on such
settlement date; provided, however, that in lieu of the opinion
referred to in clause (ii) above, such counsel may furnish the
Agents with a letter to the effect that the Agents may rely on
such prior opinion to the same extent as though it were dated
such settlement date (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended or supplemented to the time of
delivery of such letter authorizing reliance).
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of Agents. The Company shall
indemnify and hold harmless each Agent and each person, if any,
who controls any Agent within the meaning of the Securities Act
or the Exchange Act from and against any loss, claim, damage or
liability, joint or several, to which such Agent or controlling
person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage,
liability or action in respect thereof arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement made
by the Company in Section 1 hereof or (ii) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, any prospectus included in the
Registration Statement before it became effective under the
Securities Act ("Preliminary Prospectus"), the Prospectus or any
amendment or supplement thereto, or in any Incorporated Document,
or in any blue sky application or other document executed by the
Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Notes under
the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky
Application"), or (iii) the omission or alleged omission to state
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or in any
Incorporated Document or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and shall reimburse each Agent
and each such controlling person for any legal or other expenses
as reasonably incurred by such Agent or controlling person, but
in no event less frequently than 30 days after each invoice is
submitted, in connection with investigating or defending or
preparing to defend against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or
action, notwithstanding the possibility that payments for such
expenses might later be held to be improper, in which case such
payments shall be promptly refunded; provided, however, (1) that
the Company shall not be liable in any such case to the extent,
but only to the extent, that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the
Agents specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Blue
Sky Application; and (2) that with respect to any untrue
statement or omission or alleged untrue statement or omission
made in any Preliminary Prospectus, which untrue statement or
omission or alleged untrue statement or omission in such
Preliminary Prospectus was corrected in the Prospectus, the
indemnity agreement contained in this Section 7(a) shall not
apply to the extent that any such loss, claim, damage or
liability results from the fact that a copy of the Prospectus,
except for any Incorporated Documents, was not sent or given to
the person asserting any such losses, claims, damages or
liabilities at or before the written confirmation of the sale of
the Notes concerned to such person, but only if the Company has
complied with provisions of Section 3(b) hereof. The foregoing
indemnity agreement is in addition to any liability which the
Company may otherwise have to any Agent or controlling person.
(b) Indemnification of the Company. Each Agent
severally, but not jointly, shall indemnify and hold harmless the
Company from and against any loss, claim, damage or liability,
joint or several, to which the Company may become subject, under
the Securities Act, the Exchange Act or federal or state
statutory law or regulation, at common law or otherwise, insofar
as such loss, claim, damage, liability or action in respect
thereof arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or in any Blue
Sky Application, or (ii) the omission or alleged omission to
state in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or in any
Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and shall reimburse any legal or other expenses
reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or
appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that
such indemnification or reimbursement shall be available in each
such case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the
Agents specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Blue
Sky Application. The foregoing indemnity agreement is in
addition to any liability which any Agent may otherwise have to
the Company. The statements with respect to the public offering
of the Notes and the manner of distribution thereof by the Agents
and with respect to the Agents set forth on the last paragraph of
the cover page of the Prospectus and under the heading "Plan of
Distribution" in any supplement to the Basic Prospectus
constitute the only information furnished in writing by the
Agents for inclusion in the Registration Statement and the
Prospectus, and each of you, as the Agents, confirm that such
statements are correct.
(c) Notice and Procedures. Promptly after receipt by
an indemnified party under this Section of notice of any claim or
the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in
writing of the claim or the commencement of that action;
provided, however, that the failure so to notify the indemnifying
party shall not relieve it from any liability which it may have
to an indemnified party under this Section unless, and only to
the extent that, the indemnifying party has been prejudiced in
any material respect by such failure and shall not relieve it
from any liability which it may have to an indemnified party
otherwise than under this Section. If any such claim or action
shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein, and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however,
that the Agents shall have the right to employ counsel to
represent the Agents and their controlling persons who may be
subject to liability arising out of any claim in respect of which
indemnity may be sought by the Agents against the Company under
this Section if, in the reasonable judgment of the Agents, it is
advisable for the Agents and their controlling persons to be
represented by separate counsel, and in that event the reasonable
fees and expenses of such counsel shall be paid by the Company.
No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for reasonable fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for
in this Section 7 shall be unavailable to or insufficient to hold
harmless any indemnified party under Section 7(a) or 7(b) hereof
in respect of any loss, claim, damage or liability or any action
in respect thereof referred to therein for any reason other than
as specified therein, then each indemnifying party shall, in lieu
of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such
loss, claim, damage or liability or action in respect thereof in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Agents
on the other from the offering of the Notes and also the relative
fault of the Company on the one hand and the Agents on the other
with respect to the statements or omissions which resulted in
such loss, claim, damage or liability or action in respect
thereof, as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among
other things, whether the indemnified party failed to give the
notice required under Section 7(c) above, including the
consequences of such failure, and whether the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied
by the Company or the Agents and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Agents
agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata
allocation or by any other method of allocation which does not
take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability or action in
respect thereof referred to above in this Section 7(d) shall be
deemed to include, for purposes of this Section 7(d), any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d), no
Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes sold through
such Agent and distributed to the public were offered to the
public exceeds the amount of any damages which such Agent has
otherwise paid or becomes liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Agents' obligations in this
Section 7(d) to contribute are several in proportion to their
respective obligations and not joint. No contributing party
shall be liable for any settlement effected without its consent
of any claim or action.
SECTION 8. STATUS OF EACH AGENT.
In soliciting offers to purchase the Notes from the
Company pursuant to this Agreement (other than in respect of any
Purchase Agreement), each Agent is acting individually and not
jointly and is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to
purchase Notes from the Company has been solicited by such Agent
and accepted by the Company but such Agent shall have no
liability to the Company in the event any such purchase is not
consummated for any reason. If the Company shall default in its
obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company shall (i) hold the Agents harmless against
any loss, claim or damage arising from or as a result of such
default by the Company and (ii), in particular, pay to the Agents
any commission to which they would be entitled in connection with
such sale.
SECTION 9. REPRESENTATIONS AND WARRANTIES TO SURVIVE
DELIVERY.
All representations and warranties of the Company
contained in this Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of the
termination or cancellation of this Agreement or any
investigation made by or on behalf of any Agent or any person
controlling such Agent or by or on behalf of the Company, and
shall survive each delivery of and payment for any of the Notes.
SECTION 10. TERMINATION.
This Agreement may be terminated for any reason with
respect to any party hereto, at any time, by such party upon the
giving of one day's written notice of such termination to the
other parties hereto; provided, however, such termination shall
be effective only with respect to such terminating party. If, at
the time of a termination, an offer to purchase any of the Notes
has been accepted by the Company but the time of delivery to the
purchaser has not occurred, the provisions of this Agreement
shall remain in effect until such Notes are delivered. The
provisions of Sections 2(c), 3(d), 3(h), 3(i), 4, 7, 8 and 9
hereof shall survive any termination of this Agreement.
SECTION 11. NOTICES.
Except as otherwise provided herein, all notices and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication, and shall be deemed effective
upon receipt thereof. Notices to the Agents shall be directed to
them as follows: Lehman Brothers Inc., 3 World Financial Center,
New York, New York 10285-1200, Attention: Medium Term Note
Department, 12th Floor, Telephone: (212) 526-2040, Telecopy:
(212) 528-1718; Salomon Brothers Inc, Seven World Trade Center,
New York, New York 10048, Attention: Medium Term Note
Department, Telephone: (212) 783-6848, Telecopy: (212)
783-2274; and BT Securities Corporation, 130 Liberty Street, New
York, New York 10006, Attention: Investment Grade Bond Group,
33rd Floor, Telephone: (212) 250-2500, Telecopy: (212)
250-5426. Notices to the Company shall be directed to it as
follows: 530 McCullough Avenue, San Antonio, Texas 78215,
Attention: Senior Vice President and Chief Financial Officer,
Telephone: (210) 246-2000, Telecopy: (210) 246-2646.
SECTION 12. BINDING EFFECT; BENEFITS.
This Agreement shall be binding upon each Agent, the
Company and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Agent within the
meaning of Section 15 of the Securities Act, and (b) the
indemnity agreement of the Agents contained in Section 7 hereof
shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration
Statement and any person controlling the Company. Nothing in
this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section, any
legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
SECTION 13. GOVERNING LAW; COUNTERPARTS.
This Agreement shall be governed by and construed in
accordance with the laws of New York. This Agreement may be
executed in counterparts and the executed counterparts shall
together constitute a single instrument.
SECTION 14. PARAGRAPH HEADINGS.
The paragraph headings used in this Agreement are for
convenience of reference only, and are not to affect the
construction hereof or to be taken into consideration in the
interpretation hereof.
If the foregoing correctly sets forth our agreement,
please indicate your acceptance hereof in the space provided for
that purpose below.
Very truly yours,
VALERO ENERGY CORPORATION
By:
Authorized Signatory
CONFIRMED AND ACCEPTED,
as of the date first above written:
LEHMAN BROTHERS INC.
By:
Authorized Signatory
SALOMON BROTHERS INC
By:
Authorized Signatory
BT SECURITIES CORPORATION
By:
Authorized Signatory
<PAGE>
EXHIBIT A
VALERO ENERGY CORPORATION
MEDIUM-TERM NOTES
SCHEDULE OF PAYMENTS
The Company agrees to pay to the Agent who solicits the
purchase of a Note a commission equal to the following percentage
of the aggregate U.S. dollar equivalent of the principal amount
of such Note sold by the Company as a result of such
solicitation:
Term Commission Rate
9 months to less than 12 months .___%
12 months to less than 18 months .___%
18 months to less than 2 years .___%
2 years to less than 3 years .___%
3 years to less than 4 years .___%
4 years to less than 5 years .___%
5 years to less than 6 years .___%
6 years to less than 7 years .___%
7 years to less than 10 years .___%
10 years to less than 15 years .___%
15 years to less than 20 years .___%
20 years to 30 years .___%
More than 30 years .___%
* With respect to Discount Securiites (as defined in the
Indenture), such percentage shall be applied against the
issue price.
** Commissions and discounts with respect to Notes with
maturities of 30 years and longer will be negotiated at
the time of sale.
<PAGE>
EXHIBIT B
VALERO ENERGY CORPORATION
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, due more than nine months from
date of issue (the "Notes"), are to be offered on a continuing
basis by Valero Energy Corporation (the "Company"). Lehman
Brothers Inc., Salomon Brothers Inc and BT Securities
Corporation, as agents (each an "Agent" and collectively, the
"Agents") (which terms shall, for all purposes of this Exhibit,
include Lehman Government Securities Inc., an affiliate of Lehman
Brothers Inc.), have each agreed to use their reasonable best
efforts to solicit offers to purchase the Notes. The Notes are
being sold pursuant to a Distribution Agreement between the
Company and the Agents dated _________, 1995 (as it may be
supplemented or amended from time to time, the "Distribution
Agreement") to which these administrative procedures are attached
as an exhibit. The Notes will be issued under an Indenture,
dated as of March 30, 1992 and as amended by the First
Supplemental Indenture dated as of _______________, 1995 between
the Company and Bankers Trust Company, as trustee (the
"Trustee"), as heretofore supplemented. The Notes will rank
equally with all other unsecured and unsubordinated indebtedness
of the Company and will have been registered with the Securities
and Exchange Commission (the "Commission"). Terms defined in the
Prospectus relating to the Notes (the "Prospectus", which term
shall include any Prospectus Supplement relating to the Notes and
any Pricing Supplement relating to an applicable Note) and in the
Distribution Agreement shall have the same meaning when used in
this exhibit.
The Notes will be issued either (a) in certificated
form (each, a "Certificated Note") delivered to the purchaser
thereof or a person designated by such purchaser or (b) in
book-entry form (each, a "Book-Entry Note") represented by one or
more fully registered global Notes (each, a "Global Security")
delivered to the Trustee, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained
by DTC. Owners of beneficial interests in Book-Entry Notes will
be entitled to physical delivery of Certificated Notes equal in
principal amount to their respective beneficial interests only
upon certain limited circumstances described in the Prospectus.
General procedures relating to the issuance of all
Notes are set forth in Part I hereof. Certificated Notes will be
issued in accordance with the procedures set forth in Part II
hereof. Book-Entry Notes will be issued in accordance with the
procedures set forth in Part III hereof.
Administrative responsibilities, document control and
record-keeping functions to be performed by the Company will be
performed by its Treasurer or Senior Vice President and Chief
Financial Officer. Administrative procedures for the offering
are explained below.
PART I: PROCEDURES OF GENERAL APPLICABILITY
PRICE TO PUBLIC
Each Note will be issued at 100% of principal amount,
unless otherwise determined by the Company.
DATE OF ISSUANCE
Each Note will be dated and issued as of the date of
its authentication by the Trustee.
MATURITIES
Each Note will mature on a Business Day (as defined
below) selected by the purchaser and agreed upon by the Company,
such date being more than nine months from the date of issuance.
Each Floating Rate Note (as defined below) will mature on an
Interest Payment Date (as defined below).
REGISTRATION
Notes will be issued only in fully registered form as
either a Book-Entry Note or a Certificated Note.
INTEREST PAYMENTS
Each Note bearing interest at a fixed rate (a "Fixed
Rate Note") will bear interest from its issue date at the annual
rate stated on the face thereof, payable in the case of Fixed
Rate Notes other than Amortizing Notes, unless otherwise
specified in an applicable Pricing Supplement, on March 15 and
September 15 of each year (each an "Interest Payment Date" with
respect to such Fixed Rate Note) and at Stated Maturity or upon
redemption, if applicable.
Special provisions are set forth in the Prospectus
relating to Notes bearing interest at a rate or rates determined
by reference to an interest rate formula ("Floating Rate Notes")
at a rate determined pursuant to the formula stated on the face
thereof, payable in arrears on such dates as are specified
therein (each an "Interest Payment Date" with respect to such
Floating Rate Note).
Unless otherwise specified in an applicable Pricing
Supplement, interest on Fixed Rate Notes will be calculated and
paid on the basis of a 360-day year of twelve 30-day months.
Unless otherwise specified in an applicable Pricing Supplement,
interest will be payable to the person in whose name such Note is
registered at the close of business on the March 1 or September 1
(whether or not a Business Day) with respect to Fixed Rate Notes
other than Amortizing Notes (as hereinafter defined), or the
fifteenth day (whether or not a Business Day) next preceding an
Interest Payment Date with respect to Floating Rate Notes (the
"Record Dates") next preceding the respective Interest Payment
Date; provided, however, that interest payable at Stated Maturity
will be payable to the person to whom principal shall be payable.
Payments of principal and interest on Notes for which payments of
principal and interest are made in equal installments over the
life of the security ("Amortizing Notes"), will be made either
quarterly on each February 1, May 1, August 1 and November 1 or
semiannually on each May 1 and November 1 as set forth in the
applicable Pricing Supplement, and at maturity or upon earlier
redemption or repayment. Payments with respect to Amortizing
Notes will be applied first to interest due and payable thereon
and then to the reduction of the unpaid principal amount thereof.
A table setting forth repayment information in respect of each
Amortizing Note will be provided to the original purchaser and
will be available, upon request, to subsequent Holders. Any
payment of principal and interest on any such Note required to be
paid on an Interest Payment Date or at Stated Maturity or upon
redemption, if applicable, which is not a Business Day shall be
postponed to the next day which is a Business Day. The first
payment of interest on any Note originally issued between a
Record Date and an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Record Date.
All interest payments (and, in the case of Amortizing Notes,
principal payments) excluding interest payments and, in the case
of Amortizing Notes, principal payments made at Stated Maturity
or upon redemption, if applicable, will be made by check mailed
to the person entitled thereto as provided above, or, at the
option of the Company and upon written notice to the Trustee on
or before the Record Date, by wire transfer to an account
maintained by such person with a bank located in the United
States. Notwithstanding the foregoing, the holder of $1 million
or more in aggregate principal amount of Notes of like tenor and
terms with the same Interest Payment Date may request payment by
wire transfer to an account with a bank located in the United
States upon written notice to the Trustee on or before the Record
Date pursuant to arrangements satisfactory to both the Company
and Trustee.
If the Company is not acting as its own paying agent,
on the fifth Business Day immediately preceding each Interest
Payment Date, the Trustee will furnish the Company with the total
amount of the interest payments and, in the case of Amortizing
Notes, principal payments to be made on such Interest Payment
Date. The Trustee (or any duly selected paying agent) will
provide monthly to the Company's Treasury Department a list of
the principal and interest to be paid on Notes maturing in the
next succeeding month. The Company will provide to the Trustee
not later than the payment date sufficient moneys to pay in full
all principal and interest payments due on such payment date.
The Trustee will assume responsibility for withholding taxes on
interest paid as required by law. On the first Business Day of
each month, the Trustee will deliver to the Company by facsimile
transmission a written statement indicating the total principal
amount of outstanding Certificated Notes for which it serves as
trustee as of the immediately preceding Business Day.
If the Company does act as its own paying agent, it
will, on or before each payment date, hold in trust a sum
sufficient to pay in full all interest payments due on such
payment date. In such circumstance, the Company will assume
responsibility for withholding taxes as required by law on
interest paid by the Company as paying agent.
ACCEPTANCE AND REJECTION OF OFFERS
The Company shall have the sole right to accept offers
to purchase Notes and may reject any such offer in whole or in
part. Each Agent shall promptly communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes
from the Company received by it other than those rejected by such
Agent. Each Agent shall have the right, in its discretion
reasonably exercised without advising the Company, to reject any
offers in whole or in part.
SETTLEMENT
The receipt of immediately available funds in U.S.
dollars by the Company in payment for a Note (less the applicable
commission) and the authentication and issuance of such Note
shall, with respect to such Note, constitute "Settlement." All
offers accepted by the Company will be settled from one to five
Business Days from the date of acceptance by the Company pursuant
to the timetable for Settlement set forth below unless the
Company and the purchaser agree to Settlement on a later date;
provided, however, that the Company will so notify the Trustee in
writing of any such later date on or before the Business Day
immediately prior to the Settlement Date.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Company and the Agents will discuss from time to
time the rates to be borne by the Notes that may be sold as a
result of the solicitation of offers by the Agents. Once any
Agent has recorded any indication of interest in Notes upon
certain terms, and communicated with the Company, if the Company
accepts an offer to purchase Notes upon such terms, it will
prepare a Pricing Supplement to the Prospectus in the form
previously approved by the Agents, reflecting the terms of such
Notes and, after approval from the Agent through which the Notes
are sold (the "Presenting Agent"), will arrange to have 10 copies
of such Pricing Supplement (together with the Prospectus, if
otherwise amended or supplemented) filed with the Commission and
will supply an appropriate number of copies of the Prospectus, as
then amended or supplemented, together with such Pricing
Supplement, to the Presenting Agent and the Trustee. See
"Delivery of Prospectus." No settlements with respect to Notes
upon such terms may occur prior to such filing and the Presenting
Agent will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes upon such terms.
After such filing, sales, mailing of confirmations and
settlements may occur with respect to Notes upon such terms,
subject to the provisions of "Delivery of Prospectus" below.
If the Company decides to post rates and a decision has
been reached to change interest rates, the Company will promptly
notify each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the Agents will
recommend and the Company will establish rates to be so "posted."
Following establishment of posted rates and prior to the filing
described in the following sentence, the Agents may only record
indications of interest in purchasing Notes at the posted rates.
Once any Agent has recorded any indication of interest in Notes
at the posted rates and communicated with the Company, if the
Company plans to accept an offer at the posted rate, it will
prepare a Pricing Supplement reflecting such posted rates and,
after approval from the Presenting Agent, will arrange to have 10
copies of such Pricing Supplement (together with the Prospectus,
if otherwise amended or supplemented) filed with the Commission
and will supply an appropriate number of copies of the
Prospectus, as then amended or supplemented, to the Presenting
Agent and the Trustee. See "Delivery of Prospectus." No
settlements at the posted rates may occur prior to such filing
and the Presenting Agent will not, prior to such filing, mail
confirmations to customers who have offered to purchase Notes at
the posted rates. After such filing, sales, mailing of
confirmations and settlements may resume, subject to the
provisions of "Delivery of Prospectus" below.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
In the event that at the time the Agents, at the
direction of the Company, suspend solicitation of offers to
purchase from the Company there shall be any orders outstanding
which have not been settled, the Company will promptly advise the
Agents and the Trustee whether such orders may be settled and
whether copies of the Prospectus, as theretofore amended and/or
supplemented, as in effect at the time of the suspension may be
delivered in connection with the settlement of such orders. The
Company will have the sole responsibility for such decision and
for any arrangements which may be made in the event that the
Company determines that such orders may not be settled or that
copies of such Prospectus may not be so delivered.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or
supplemented on the date of delivery thereof, together with the
applicable Pricing Supplement, must be delivered to a purchaser
prior to or together with the earlier of the delivery by the
Agents of (i) the written confirmation of a sale sent to a
purchaser or his agent and (ii) any Note purchased by such
purchaser. The Company shall ensure that the Presenting Agent
receives copies of the Prospectus and each amendment or
supplement thereto (including the applicable Pricing Supplement)
in such quantities and within such time limits as will enable the
Presenting Agent to deliver such confirmation or Note to a
purchaser as contemplated by these procedures and in compliance
with the preceding sentence. Copies of Pricing Supplements
should be delivered to Lehman Brothers Inc., 3 World Financial
Center, 9th Floor, New York, New York 10285-0900, Attn: Brunie
Vazquez, Telephone: (212) 526-8400, Telecopy: Lehman Brothers
Inc., c/o ADP, Prospectus Services, 536 Broad Hollow Road,
Melville, New York 11747, Attn: Eric Johnson, (516) 249-7942; to
Salomon Brothers Inc, Balancing Operations, 8800 Hidden River
Parkway, Tampa, Florida 33637, Attention: Enrique Castro,
Telephone: (813) 558-7165, Telecopy: (813) 558-4123; and to BT
Securities Corporation, 130 Liberty Street, New York, New York
10006, Attention: Judith Lidz, 33rd Floor, Telephone: (212)
250-8433, Telecopy: (212) 250-5426. If, since the date of
acceptance of a purchaser's offer, the Prospectus shall have been
supplemented solely to reflect any sale of Notes on terms
different from those agreed to between the Company and such
purchaser or a change in posted rates not applicable to such
purchaser, such purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes
being purchased by such purchaser and otherwise as most recently
amended or supplemented on the date of delivery of the
Prospectus. The Company will make all such deliveries with
respect to all Notes sold directly by the Company.
REDEMPTION AND REPAYMENT
Unless one or more Redemption Dates are specified in
the applicable Pricing Supplement, the Notes will not be
redeemable prior to their Stated Maturity. If one or more
Redemption Dates are so specified with respect to any Note, the
applicable Pricing Supplement will also specify one or more
redemption prices (expressed as a percentage of the principal
amount of such Note) ("Redemption Prices") and the redemption
period or periods ("Redemption Periods") during which such
Redemption Prices shall apply. Unless otherwise specified in the
Pricing Supplement, any such Note shall be redeemable at the
option of the Company at the specified Redemption Price
applicable to the Redemption Period during which such Note is to
be redeemed, together with interest accrued to the Redemption
Date. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund.
The Company may redeem any of the Notes that are redeemable and
remain outstanding either in whole or from time to time in part,
upon not less than 30 nor more than 60 days' notice. In the
event of a redemption in part of any Note, a new Note for the
amount of the unredeemed portion shall be issued in the name of
the Holder upon cancellation of the redeemed Note.
The Pricing Supplement relating to each Note will
indicate either that such Note cannot be repaid prior to Stated
Maturity or that such Note will be repayable at the option of the
holder on a date or dates specified prior to Stated Maturity at a
price or prices set forth in the applicable Pricing Supplement,
together with accrued interest to the date of repayment.
In order for a Note that is subject to repayment at the
option of the Holder to be repaid, the Paying Agent must receive
at least 30 days but not more than 45 days prior to the repayment
date (a) appropriate wire instructions and (b) either (i) the
Note with the form entitled "Option to Elect Repayment" attached
to the Note duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc.
or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Note, the principal
amount of the Note, the portion of the principal amount of the
Note to be repaid, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the
Note to be repaid with the form entitled "Option to Elect
Repayment" attached to the Note duly completed will be received
by the Paying Agent not later than five Business Days after the
date of such telegram, telex, facsimile transmission or letter
and such Note and form duly completed must be received by the
Paying Agent by such fifth Business Day. Exercise of the
repayment option by the Holder of a Note shall be irrevocable,
except as otherwise described under "Interest Rate Reset" and
"Extension of Maturity" in the Prospectus Supplement. The
repayment option may be exercised by the Holder of a Note for
less than the entire principal amount of the Note provided that
the principal amount of the Note remaining outstanding after
repayment is an authorized denomination. No transfer or exchange
of any Note (or, in the event that any Note is to be repaid in
part, the portion of the Note to be repaid) will be permitted
after exercise of a repayment option. All questions as to the
validity, eligibility (including time of receipt) and acceptance
of any Note for repayment will be determined by the Company,
whose determination will be final, binding and nonappealable.
If a Note is represented by a Global Security, the
Depositary's nominee will be the Holder of such Note and
therefore will be the only entity that can exercise a right to
repayment. In order to ensure that the Depositary's nominee will
timely exercise a right to repayment with respect to a particular
Note, the beneficial owner of such Note must instruct the broker
or other direct or indirect participant through which it holds an
interest in such Note to notify the Depositary of its desire to
exercise a right to repayment. Different firms have different
cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker
or other direct or indirect participant through which it holds an
interest in a Note in order to ascertain the cut-off time by
which such an instruction must be given in order for timely
notice to be delivered to the Depositary.
Unless otherwise specified in the applicable Pricing
Supplement, if a Note is an Original Issue Discount Note, the
amount payable on such Note in the event of redemption or
repayment prior to its Stated Maturity shall be the Amortized
Face Amount of such Note, as specified in the applicable Pricing
Supplement, as of the Redemption Date or the date of repayment,
as the case may be.
AUTHENTICITY OF SIGNATURES
The Company will cause the Trustee to furnish the
Agents from time to time with the specimen signatures of each of
the Trustee's officers, employees and agents who have been
authorized by the Trustee to authenticate Notes, but the Agents
will have no obligation or liability to the Company or the
Trustee in respect of the authenticity of the signature of any
officer, employee or agent of the Company or the Trustee on any
Note.
ADVERTISING COSTS
The Company will determine with the Agents the amount
and nature of advertising that may be appropriate in offering the
Notes. Advertising expenses incurred with the consent of the
Company will be paid by the Company.
BUSINESS DAY
"Business Day" shall mean, with respect to any
particular location, each Monday, Tuesday, Wednesday, Thursday or
Friday which is not a day on which banking institutions in such
location are authorized or obligated by law or executive order to
close.
PART II: PROCEDURES FOR CERTIFICATED NOTES CURRENCY
Certificated Notes will be denominated in U.S. dollars.
REGISTRATION
Certificated Notes may be presented for registration of
transfer or exchange at the Trustee's New York office.
DENOMINATIONS
Except as provided in the applicable Pricing
Supplement, Certificated Notes will be issued and payable in U.S.
dollars in the denomination of $1,000 and any larger denomination
which is an integral multiple of $1,000.
MATURITY
Upon presentation of each Certificated Note at Maturity
the Trustee (or any duly appointed Paying Agent) will pay the
principal amount thereof, together with accrued interest due at
maturity. Such payment shall be made in immediately available
funds in U.S. dollars, provided that the Certificated Note is
presented to the Trustee (or any such Paying Agent) in time for
the Trustee (or such Paying Agent) to make payments in such funds
in accordance with its normal procedures. The Company will
provide the Trustee (and any such Paying Agent) with funds
available for immediate use for such purpose. Certificated Notes
presented at Maturity will be cancelled by the Trustee as
provided in the Indenture.
SETTLEMENT PROCEDURES
In the event of a purchase of Certificated Notes by an
Agent, as principal, appropriate Settlement details will be as
set forth below unless such details are set forth in the
applicable Purchase Agreement to be entered into between such
Agent and the Company pursuant to the Distribution Agreement.
Other than as contemplated above, settlement procedures
with regard to each Certificated Note sold through each Agent
shall be as follows:
A. The Presenting Agent will advise the Company by telephone,
telex or facsimile, of the following Settlement information:
1. Exact name in which the Note is to be registered
("Registered Owner").
2. Exact address of the Registered Owner and address
for payment of principal and interest, if any.
3. Taxpayer identification number of the Registered
Owner.
4. Principal amount of the Note (and, if multiple
Notes are to be issued, denominations thereof).
5. Settlement Date.
6. Stated Maturity and, if the Company has the option
to extend the Stated Maturity, the Extension Periods and the
Final Maturity Date.
7. Issue Price and any OID information.
8. Trade Date/Original Issue Date.
9. If such Note is a Fixed Rate Note, whether such
Note is an Amortizing Note.
10. Interest rate (including, if appropriate, such
interest rate information applicable to any Extension Period):
(a) Fixed Rate Certificated Notes:
(i) interest rate
(ii) interest payment dates, if other than as
specified above
(iii) date or dates, if any, on which the
interest rate may be reset and the basis or formula, if any, for
such resetting
(iv) overdue rate, if any
(b) Floating Rate Certificated Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) date or dates, if any, on which the
spread or spread multiplier may be reset and the basis or
formula, if any for such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates,
if any
(ix) record dates
(x) interest determination dates
(xi) overdue rate, if any
11. The date on or after which the Certificated Notes
are redeemable at the option of the Company or are to be repaid
at the option of the Holder, and additional redemption or
repurchase provisions, if any.
12. Wire transfer information.
13. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company upon
Settlement).
14. That the Note will be a Certificated Note.
B. The Company will confirm the above Settlement
information to the Trustee by telephone (with written
confirmation to follow), telex or facsimile, and the Trustee will
assign a Note number to the transaction. If the Company rejects
an offer, the Company will promptly notify the Presenting Agent
and the Trustee by telephone.
C. The Trustee will complete the first page of the
preprinted 4-ply Certificated Note packet, the form of which was
previously approved by the Company, the Agents and the Trustee.
D. The Trustee will deliver the Certificated Note (with
the attached white confirmation) and the yellow and blue stubs to
the Presenting Agent. The Presenting Agent will acknowledge
receipt of the Certificated Note by completing the yellow stub
and returning it to the Trustee.
E. The Presenting Agent will cause to be wire transferred
to a bank account designated by the Company immediately available
funds in U.S. dollars in the amount of the principal amount of
the Certificated Note, less the applicable commission or
discount, if any.
F. The Presenting Agent will deliver the Certificated Note
(with the attached white confirmation) to the purchaser against
payment in immediately available funds in the amount of the
principal amount of the Certificated Note. The Presenting Agent
will deliver to the purchaser a copy of the most recent
Prospectus applicable to the Certificated Note with or prior to
any written offer of Certificated Notes, delivery of the
Certificated Note and the confirmation and payment by the
purchaser for the Certificated Note.
G. The Presenting Agent will obtain the acknowledgment of
receipt for the Certificated Note and Prospectus by the purchaser
through the purchaser's completion of the blue stub.
H. The Trustee will mail the pink stub to the Company's
Treasurer or Senior Vice President or Chief Financial Officer.
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase Certificated Notes accepted by the
Company, Settlement Procedures "A" through "H" set forth above
shall be completed on or before the respective times set forth
below:
SETTLEMENT
PROCEDURE TIME (NEW YORK)
A 5 PM on the Trade Date
B 3 PM on the Business Day prior to Settlement Date
C-D 12 Noon on the Settlement Date
E 2:15 PM on the Settlement Date
F-G 3 PM on the Settlement Date
H 5 PM on Business Day after the Settlement Date
FAILS
In the event that a purchaser of a Certificated Note shall
either fail to accept delivery or to make payment for such
certificated Note on the date fixed by the Company for
Settlement, the Presenting Agent will immediately notify the
Trustee and the Company's Treasurer or Senior Vice President and
Chief Financial Officer by telephone, confirmed in writing, of
such failure and return the Certificated Note to the Trustee.
Upon the Trustee's receipt of the Certificated Note from the
Presenting Agent, the Company will promptly return to the
Presenting Agent an amount of immediately available funds in U.S.
dollars equal to any amount previously transferred to the Company
in respect of the Certificated Note pursuant to advances made by
the Presenting Agent. Such returns will be made on the
Settlement Date, if possible, and in any event not later than 12
noon (New York City time) on the Business Day following the
Settlement Date. The Company will reimburse the Presenting Agent
on an equitable basis for its loss of the use of the funds during
the period when the funds were credited to the account of the
Company. Upon receipt of the Certificated Note in respect of
which the default occurred, the Trustee will mark the
Certificated Note "cancelled," make appropriate entries in its
records and deliver the Certificated Note to the Company with an
appropriate debit advice. The Presenting Agent will not be
entitled to any commission with respect to any Certificated Note
which the purchaser does not accept or make payment for.
PART III: SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
the Trustee will perform or cause to be performed the custodial,
document control and administrative functions described below, in
accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC and a
Medium-Term Note Certificate Agreement previously entered into
between the Trustee and DTC, and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement System
("SDFS"). Except as otherwise set forth in this Exhibit B,
Book-Entry Notes will be issued in accordance with the
administrative procedures set forth below.
ISSUANCE
On any date of settlement (as defined under
"Settlement" below) for one or more Fixed Rate Book-Entry Notes,
the Company will issue a single Global Security in fully
registered form without coupons representing up to $250,000,000
principal amount of all of such Notes that have the same original
issuance date, interest rate, redemption or repayment provisions
and Stated Maturity. Similarly, on any settlement date for one
or more Floating Rate Book-Entry Notes, the Company will issue a
single Global Security representing up to $250,000,000 principal
amount of all of such Notes that have the same interest rate
formula, original issuance date, Initial Interest Rate, Interest
Payment Dates, Index Maturity, Spread, Spread Multiplier, minimum
interest rate (if any), maximum interest rate (if any),
redemption or repayment provisions and Stated Maturity. Each
Global Security will be dated and issued as of the date of its
authentication by the Trustee. Each Global Security will have an
interest accrual date (the "Interest Accrual Date"), which will
be (i) with respect to an original Global Security (or any
portion thereof), its original issuance date and (ii) with
respect to any Global Security (or portion thereof) issued
subsequently upon exchange of a Global Security or in lieu of a
destroyed, lost or stolen Global Security, the most recent
Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Global Security or Securities (or
if no such payment or provision has been made, the original
issuance date of the predecessor Global Security), regardless of
the date of authentication of such subsequently issued Global
Security. No Global Security will represent (i) both Fixed Rate
and Floating Rate Book-Entry Notes or (ii) any Certificated Note.
IDENTIFICATION NUMBERS
The Company will arrange, on or prior to commencement
of a program for the offering of Book-Entry Notes, with the CUSIP
Service Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of CUSIP numbers
(including tranche numbers), consisting of approximately 900
CUSIP numbers and relating to Global Securities representing the
Book-Entry Notes. The Company has or will obtain from the CUSIP
Service Bureau a written list of such series of reserved CUSIP
numbers and will deliver to the Trustee and DTC such written list
of 900 CUSIP numbers of such series. The Trustee will assign
CUSIP numbers to Global Securities as described below under
Settlement Procedure "B." DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Global Securities. The Trustee will notify the
Company at any time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global Securities, and if it deems
necessary, the Company will reserve additional CUSIP numbers for
assignment to Global Securities representing Book-Entry Notes.
Upon obtaining such additional CUSIP numbers, the Company shall
deliver such additional CUSIP numbers to the Trustee and DTC.
REGISTRATION
Each Global Security will be registered in the name of
Cede & Co., as nominee for DTC, on the Securities Register
maintained under the Indenture governing such Global Security.
The beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner) will
designate one or more participants in DTC with respect to such
Book-Entry Note (the "Participants") to act as agent or agents
for such owner in connection with the book-entry system
maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a
credit balance with respect to such Book-Entry Note in the
account of such Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be recorded through
the records of such Participants or through the separate records
of such Participants and one or more indirect participants in
DTC.
VOTING
In the event of any solicitation of consents from or
voting by holders of the Book-Entry Notes, the Company or the
Trustee shall establish a record date for such purposes (with no
provision for revocation of consents or votes by subsequent
holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of
such record date.
TRANSFERS
Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in DTC) acting
on behalf of beneficial transferors and transferees of such
Book-Entry Note.
CONSOLIDATION AND EXCHANGE
The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation specifying
(i) the CUSIP numbers of two or more Outstanding Global
Securities that represent (a) Fixed Rate Book-Entry Notes having
the same original issuance date, interest rate, redemption and
repayment provisions and Stated Maturity and with respect to
which interest has been paid to the same date or (b) Floating
Rate Book-Entry Notes having the same interest rate formula,
original issuance date, Initial Interest Rate, Interest Payment
Dates, Index Maturity, Spread or Spread Multiplier, minimum
interest rate (if any), maximum interest rate (if any),
redemption and repayment provisions and with respect to which
interest has been paid to the same date, (ii) a date, occurring
at least 30 days after such written notice is delivered and at
least 30 days before the next Interest Payment Date for such
Book-Entry Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security and (iii) a
new CUSIP number, obtained from the Company, to be assigned to
such replacement Global Security. Upon receipt of such a notice,
DTC will send to its Participants (including the Trustee) a
written reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange date,
the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the CUSIP numbers of
the Global Securities to be exchanged will no longer be valid.
On the specified exchange date, the Trustee will exchange such
Global Securities for a single Global Security bearing the new
CUSIP number and a new Interest Accrual Date, and the CUSIP
numbers of the exchanged Global Securities will, in accordance
with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the
Global Securities to be exchanged exceed $250,000,000 in
aggregate principal amount, one Global Security will be
authenticated and issued to represent each $250,000,000 of
principal amount of the exchanged Global Securities and an
additional Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (see "Denominations" below).
MATURITIES
Each Book-Entry Note will mature on a date more than
nine months after the settlement date for such Note. A Floating
Rate Book-Entry Note will mature only on an Interest Payment Date
for such Note.
NOTICE OF REDEMPTION AND REPAYMENT DATES
The Trustee will give notice to DTC prior to each
redemption date or repayment date (as specified in the Book-Entry
Note), if any, at the time and in the manner set forth in the
letter of redemption.
DENOMINATIONS
Unless otherwise provided in the applicable Prospectus
Supplement, Book-Entry Notes will be issued in principal amounts
of $1,000 or any amount in excess thereof that is an integral
multiple of $1,000. Global Securities representing one or more
Book-Entry Notes will be denominated in principal amounts not in
excess of $250,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of $250,000,000 would,
but for the preceding sentence, be represented by a single Global
Security, then one Global Security will be issued to represent
each $250,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Security will be issued to
represent any remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global Securities
representing such Book-Entry Note or Notes shall be assigned the
same CUSIP number.
INTEREST
General. Interest on each Book-Entry Note will accrue
from the Interest Accrual Date of the Global Security
representing such Note. Each payment of interest on a Book-Entry
Note will include interest accrued through the day preceding, as
the case may be, the Interest Payment Date or the date of
Maturity, redemption or repayment; provided, however, that if the
Interest Reset Dates with respect to any such Note are daily or
weekly, interest payable on any Interest Payment Date, other than
interest payable on any date on which principal for such Note is
payable, will include interest accrued from but excluding the
second preceding Regular Record Date to and including the next
preceding Regular Record Date. Interest payable at the Maturity
or upon earlier redemption or repayment of a Book-Entry Note will
be payable to the Person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use the information
received in the pending deposit message described under
Settlement Procedure "C" below in order to include the amount of
any interest payable and certain other information regarding the
related Global Security in the appropriate weekly bond report
published by Standard & Poor's Corporation.
Floating Rate Note Notices. On the first Business Day
of each month, the Trustee will deliver to the Company and DTC a
written list of Regular Record Dates and Interest Payment Dates
that will occur with respect to Floating Rate Book-Entry Notes
during such month. Promptly after each Interest Determination
Date (as defined in Appendix A hereto) for Floating Rate Notes,
the Company will notify the Trustee, and the Trustee in turn will
notify Standard & Poor's Corporation, of the interest rates
determined on such Interest Determination Date.
PAYMENTS OF PRINCIPAL AND INTEREST
Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company, DTC and
Standard & Poor's Corporation a written notice specifying by
CUSIP number the amount of interest to be paid on each Global
Security on the following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity or an earlier
redemption or repayment date) and the total of such amounts. DTC
will confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the daily bond reports
published by Standard & Poor's Corporation. The Company will pay
to the Trustee, as paying agent, the total amount of interest due
on such Interest Payment Date (other than at Maturity), and the
Trustee will pay such amount to DTC at the times and in the
manner set forth below under "Manner of Payment." Promptly after
each Interest Determinate Date for Floating Rate Book-Entry
Notes, the Calculation Agent will notify the Trustee and Standard
& Poor's Corporation of the interest rates determined on such
Interest Determination Date.
Payments at Maturity or Upon Redemption or Repayment.
On or about the first Business Day of each month, the Trustee
will deliver to the Company and DTC a written list of principal
and interest to be paid on each Global Security maturing either
at maturity or any redemption or repayment date in the following
month. The Company, the Trustee and DTC will confirm the amounts
of such principal and interest payments with respect to each such
Global Security on or about the fifth Business Day preceding the
Maturity or redemption or repayment date of such Global Security.
The Company will pay to the Trustee, as the paying agent, the
principal amount of such Global Security, together with interest
due at such Maturity or redemption or repayment date, as the case
may be. The Trustee will pay such amount to DTC at the times and
in the manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal and
interest due at the Maturity of such Global Security, the Trustee
will cancel such Global Security and deliver it to the Company
with an appropriate debit advice. On the first Business Day of
each month, the Trustee will prepare a written statement
indicating the total principal amount of Outstanding Global
Securities for which it serves as paying agent as of the
immediately preceding Business Day.
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any Interest Payment
Date or at Maturity or upon redemption or repayment shall be paid
by the Company to the Trustee in funds available for use by the
Trustee as of 9:30 A.M. (New York City time) on such date. The
Company will make such payment on such Global Securities by
instructing the Trustee to withdraw funds from an account
maintained by the Company at the Trustee. The Company will
confirm such instructions in writing to the Trustee, with a copy
to the Trustee under the Indenture governing such Global
Securities if such Global Securities are of subordinated or
junior subordinated rank. For maturity, redemption or any other
principal payments: prior to 10 A.M. (New York City time) on
such date or as soon as possible thereafter, the Trustee will
make such payments to DTC in same day funds in accordance with
DTC's Same Day Funds Settlement Paying Agent Operating
Procedures. For interest payments: the Trustee will make such
payments to DTC in accordance with existing arrangements between
DTC and the Trustee. DTC will allocate such payments to its
Participants in accordance with its existing operating
procedures. Neither the Company (either as issuer or as Paying
Agent nor any other Paying Agent) nor the Trustee shall have any
direct responsibility or liability for the payment by DTC to such
Participants of the principal of and interest on the Book-Entry
Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest payment on
a Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly to the
beneficial owner of such Note.
SETTLEMENT PROCEDURES
In the event of a purchase of Book-Entry Notes by any
Agent, as principal, Settlement details will be as set forth
below unless such details are set forth in the applicable
Purchase Agreement to be entered into between such Agent and the
Company pursuant to the Distribution Agreement.
Other than as contemplated above, Settlement Procedures
with regard to each Book-Entry Note sold by the Company through
an Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Company by
telephone, telex or facsimile of the following settlement
information:
1. Principal amount of the Book-Entry Note (and, if
multiple Notes are to be issued, denominations thereof).
2. Settlement Date.
3. Stated Maturity and, if the Company has the option
to extend the Stated Maturity, the Extension Periods and the
Final Maturity Date.
4. Issue Price and any OID information.
5. Trade date.
6. If such Book-Entry Note is a Fixed Rate Note,
whether such Note is an Amortizing Note.
7. The DTC Participant account number of such Agent.
8. Interest rate (including, if appropriate, such
interest rate information applicable to any Extension Period):
a. Fixed Rate Notes:
(i) interest rate
(ii) interest payment dates, if other than as
specified above
(iii) date or dates, if any, on which the
interest rate may be reset and the basis or formula, if any, for
such resetting
(iv) overdue rate, if any
b. Floating Rate Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) date or dates, if any, on which the
spread or spread multiplier may be reset and the basis or
formula, if any, for such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates,
if any
(ix) record dates
(x) interest determination dates
(xi) overdue rate, if any
9. The date on or after which the Book-Entry Notes
are redeemable at the option of the Company or are to be repaid
at the option of the Holder, and additional redemption or
repurchase provisions, if any.
10. Wire transfer information.
11. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company upon
settlement).
12. That the Note will be a Book-Entry Note.
B. The Trustee will assign a CUSIP number to the Global
Security representing such Note and then advise the Company by
telephone (confirmed in writing at any time on the same date) or
electronic transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number and the name of
such Agent.
C. The Trustee will enter a pending deposit message
through DTC's Participant Terminal System, providing the
following settlement information to DTC, the Presenting Agent,
Standard & Poor's Corporation and, upon request, the Trustee
under the Indenture pursuant to which such Note is to be issued:
1. The information set forth in Settlement Procedure
"A."
2. Identification as a Fixed Rate Book-Entry Note or
a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the related "DTC
Record Date" (which term means the Regular Record Date except in
the case of floating rate notes which reset daily or weekly, in
which case it means the date five calendar days immediately
preceding the Interest Payment Date) and amount of interest
payable on such Interest Payment Date.
4. Frequency of interest payments (monthly,
semiannually, quarterly, etc.).
5. CUSIP number of the Global Security representing
such Book-Entry Note.
6. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such time).
7. The number of Participant accounts to be
maintained by DTC on behalf of the Agents or the Trustee.
D. The Trustee, as Trustee, will complete and authenticate
the note certificate evidencing the Global Security representing
such Book-Entry Note.
E. DTC will credit such Book-Entry Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i) debit
such Book-Entry Note to the Trustee's participant account and
credit such Note to the Presenting Agent's participant account
and (ii) debit the Presenting Agent's settlement account and
credit the Trustee's settlement account for an amount equal to
the price of such Note less the Presenting Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC (i) to
debit such Book-Entry Note to the Presenting Agent's participant
account and credit such Note to the participant accounts of the
Participants with respect to such Book-Entry Note and (ii) to
debit the settlement accounts of such Participants and credit the
settlement account of the Presenting Agent for an amount equal to
the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "F" and "G" will be
settled in accordance with SDFS operating procedures in effect on
the Settlement Date.
I. The Trustee will credit to an account of the Company
maintained at the Trustee funds available for immediate use in
the amount transferred to the Trustee in accordance with
Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a
copy of the most recent Prospectus, as supplemented, applicable
to the Book-Entry Note with or prior to any written offer of
Book-Entry Notes and the confirmation and payments by the
purchaser of the Book-Entry Note.
The Trustee will retain the Global Security
representing such Book-Entry Note and will send a photocopy
thereof to the Company by first-class mail. The Trustee will
send to the Company at the request of the Company, a written
statement setting forth (i) the principal amount of Book-Entry
Notes outstanding under the Indenture as of the date of such
report, (ii) a brief description of any sales of which the
Company has advised the Trustee but which have not yet been
settled and (iii) a description of issuances and retirements of,
payment on and other activity relating to the Book-Entry Notes
during the related month.
The Presenting Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Note a confirmation
order or orders through DTC's institutional delivery system or by
mailing a written confirmation to such purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase Book-Entry Notes solicited by an
Agent, as agent, and accepted by the Company for settlement,
Settlement Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the respective
times (New York City time) set forth below:
SETTLEMENT
PROCEDURES TIME
A-B 11:00 A.M. on the Sale Date
C 2:00 P.M. on the Sale Date
D 3:00 P.M. on the date before the Settlement Date
E 10:00 A.M. on the Settlement Date
F-G 2:00 P.M. on the Settlement Date
H 4:45 P.M. on the Settlement Date
I-J 5:00 P.M. on the Settlement Date
If a sale is to be settled more than one Business Day
after the Sale Date, Settlement Procedures "A," "B" and "C" shall
be completed as soon as practicable but no later than 11:00 A.M.
and 2:00 P.M., as the case may be, on the first Business Day
after the Sale Date. If the initial interest rate for a Floating
Rate Book-Entry Note has not been determined at the time that
Settlement Procedure "A" is completed, Settlement Procedures "B"
and "C" shall be completed as soon as such rate has been
determined but no later than 11:00 A.M. and 12:00 Noon,
respectively, on the second Business Day before the Settlement
Date. Settlement Procedure "I" is subject to extension in
accordance with any extension of Fedwire closing deadlines and in
the other events specified in the SDFS operating procedures in
effect on the Settlement Date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business Day immediately
preceding the scheduled Settlement Date.
FAILURE TO SETTLE
If the Trustee fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to Settlement
Procedure "F," the Trustee may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable, a withdrawal
message instructing DTC to debit such Book-Entry Note to the
Trustee's participant account. DTC will process the withdrawal
message, provided that the Trustee's participant account contains
a principal amount of the Global Security representing such
Book-Entry Note that is at least equal to the principal amount to
be debited. If a withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global Security, the
Trustee will mark such Global Security "canceled," make
appropriate entries in the Trustee's records and send such
canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed with respect to
one or more, but not all, of the Book-Entry Notes represented by
a Global Security, the Trustee will exchange such Global Security
for two Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled immediately after
issuance and the other of which shall represent the other
Book-Entry Notes previously represented by the surrendered Global
Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such Book-Entry
Note by the beneficial purchaser thereof (or a Person, including
an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent for such
Book-Entry Note may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered pursuant
to Settlement Procedures "F" and "G," respectively. Thereafter,
the Trustee will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any such failure to
settle with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to one
or more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D," for the authentication
and issuance of a Global Security representing the other
Book-Entry Notes to have been represented by such Global Security
and will make appropriate entries in its records.
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
VALERO ENERGY CORPORATION [DATE]
530 McCullough Avenue
San Antonio, Texas 78215
ATTENTION: Senior Vice President and Chief Financial Officer
The undersigned agrees to purchase the following
principal amount of the Notes described in the Distribution
Agreement dated _________________, 1995 (as it may be
supplemented or amended from time to time, the "Distribution
Agreement"):
PRINCIPAL AMOUNT: $____________
INTEREST RATE: _________%
DISCOUNT: _________% of Principal Amount
AGGREGATE PRICE TO BE
PAID TO COMPANY (IN
IMMEDIATELY AVAILABLE
FUNDS): $____________
SETTLEMENT DATE:
OTHER TERMS:
Terms defined in the Prospectus relating to the Notes and in
the Distribution Agreement shall have the same meaning when used
herein.
Our obligation to purchase Notes hereunder is subject
to the continued accuracy of your representations and warranties
contained in the Distribution Agreement and to your performance
and observance of all applicable covenants and agreements
contained therein, including, without limitation, your
obligations pursuant to Section 7 thereof. Our obligation
hereunder is subject to the further condition that we shall
receive (a) the opinions required to be delivered pursuant to
Sections 5(e) and 5(g) of the Distribution Agreement, (b) the
certificate required to be delivered pursuant to Section 5(h) of
the Distribution Agreement and (c) the letter referred to in
Section 5(i) in each case dated as of the above Settlement Date.
In further consideration of our agreement hereunder,
you agree that between the date hereof and the above Settlement
Date, you will not offer or sell, or enter into any agreement to
sell, any debt securities of the Company, other than borrowings
under your revolving credit agreements and lines of credit.
We may terminate this Agreement, immediately upon
notice to you, at any time prior to the Settlement Date, if prior
thereto you are unable to provide any of the opinions,
certificates or letters referred to in the second preceding
paragraph or there shall have occurred: (i) any change, or any
development involving a prospective change, in or affecting
primarily the business, properties, condition (financial or
other), results of operations or prospects of the Company or the
Company and its Subsidiaries taken as a whole which, in our
reasonable opinion, materially impairs the investment quality of
the Notes; (ii) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the
American Stock Exchange or the over-the-counter market or the
establishment of minimum prices on either of such exchanges or
such market; (iii) a general moratorium on commercial banking
activities declared by federal or state authorities; (iv) any
downgrading in the rating accorded the Company's debt securities
by any "nationally recognized statistical rating organization,"
as that term is defined by the Securities and Exchange Commission
for purposes of Rule 436(g)(2) under the Securities Act of 1933
or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the
Company (other than an announcement with positive implications of
a possible upgrading, and no implication of a possible
downgrading, of such rating); (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national
calamity or emergency; or (vi) any material adverse change in the
existing financial, political or economic conditions in the
United States, including any effect of international conditions
on the financial markets in the United States, that in our
judgment makes it impracticable or inadvisable to proceed with
the purchase of Notes. In the event of such termination, no
party shall have any liability to the other party hereto, except
as provided in Sections 4, 7 and 12 of the Distribution
Agreement.
This Agreement shall be governed by and construed in
accordance with the laws of New York.
LEHMAN BROTHERS INC.
By:
[Title]
SALOMON BROTHERS INC
By:
[Title]
BT SECURITIES CORPORATION
By:
[Title]
ACCEPTED: , 19___
VALERO ENERGY CORPORATION
By:
[Title]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
reports dated February 17, 1994 included in Valero Energy
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993, and Current Report on Form 8-K dated May 31,
1994, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
San Antonio, Texas
February 8, 1995
