EXHIBIT 4.6
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
UDS Capital I
Dated as of June 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by the Trust Preferred Guarantee
Trustee
SECTION 2.4 Periodic Reports to Trust Preferred
Guarantee Trustee
SECTION 2.5 Evidence of Compliance with Conditions
Precedent
SECTION 2.6 Events of Default; Waiver
SECTION 2.7 Event of Default; Notice
SECTION 2.8 Conflicting Interests
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred
Guarantee Trustee
SECTION 3.2 Certain Rights of Trust Preferred Guarantee
Trustee
SECTION 3.3. Not Responsible for Recitals or Issuance
of Trust Preferred Securities Guarantee
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee;
Eligibility
SECTION 4.2 Appointment, Removal and Resignation
of Trust Preferred Guarantee Trustee
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
SECTION 5.2 Waiver of Notice and Demand
SECTION 5.3 Obligations Not Affected
SECTION 5.4 Rights of Holders
SECTION 5.5 Guarantee of Payment
SECTION 5.6 Subrogation
SECTION 5.7 Independent Obligations
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
SECTION 6.2 Ranking
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
SECTION 8.2 Indemnification
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
SECTION 9.2 Amendments
SECTION 9.3 Consolidations and Mergers
SECTION 9.4 Notices
SECTION 9.5 Benefit
SECTION 9.6 Governing Law
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (the
"Trust Preferred Securities Guarantee"), dated as of June 25, 1997 is
executed and delivered by Ultramar Diamond Shamrock Corporation, a Dela-
ware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trust Preferred Guarantee Trust-
ee"), for the benefit of the Holders (as defined herein) from time to
time of the Trust Preferred Securities (as defined herein) of UDS Capi-
tal I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of June 25, 1997, among the trustees
of the Issuer named therein, Ultramar Diamond Shamrock Corporation, as
sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date
hereof 8,000,000 Trust Originated Preferred Securities, having an aggre-
gate liquidation amount of $200,000,000, designated the 8.32% Trust
Originated Preferred Securities (the "Trust Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Trust
Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Trust Prefer-
red Securities Guarantee, to pay to the Holders of the Trust Preferred
Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein and;
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Trust Common Securities Guarantee"), with
substantially identical terms to this Trust Preferred Securities
Guarantee for the benefit of the holders of the Trust Common Securities
(as defined herein), except that if the Guarantor is in default on any
of its obligations under the Trust Preferred Securities Guarantee, the
Partnership Guarantee (as defined herein), or any Investment Guarantee
(as defined herein), or any default has occurred and is continuing with
respect to an Affiliate Investment Instrument (as defined herein), the
rights of holders of the Trust Common Securities to receive Guarantee
Payments under the Trust Common Securities Guarantee are subordinated,
to the extent and in the manner set forth in the Trust Common Securities
Guarantee, to the rights of Holders of Trust Preferred Securities to
receive Guarantee Payments under this Trust Preferred Securities Guar-
xxxxx.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Trust Preferred Securities, which purchase the Guarantor
hereby acknowledges shall benefit the Guarantor, the Guarantor executes
and delivers this Trust Preferred Securities Guarantee for the benefit
of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) Capitalized terms used in this Trust Preferred Securities
Guarantee but not otherwise defined herein shall have the
meanings assigned to them in the Declaration or the
Partnership Agreement, as the case may be.
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Trust Preferred Securities Guarantee"
or "this Trust Preferred Securities Guarantee" are to this
Trust Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Trust Preferred Securities Guarantee, unless otherwise spec
ified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Preferred Securities Guarantee, unless
otherwise defined in this Trust Preferred Securities Guarantee
or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law
to close.
"Corporate Trust Office" means the principal trust office of
the Trust Preferred Guarantee Trustee in the Borough of Manhattan, The
City of New York, which office at the date hereof is located at 000
Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Trust Preferred Securities
Guarantee.
"Finance Subsidiary" means any wholly-owned subsidiary of the
Guarantor the principal purpose of which is to raise capital for the
Guarantor by issuing securities that are guaranteed by the Guarantor and
the proceeds of which are loaned to or invested in the Guarantor or one
or more of its affiliates.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Trust Preferred
Securities, to the extent not paid or made by the Issuer: (i) any
accumulated and unpaid Distributions (as defined in the Declaration)
that are required to be paid on such Trust Preferred Securities, to the
extent the Issuer has funds legally available therefor at such time,
(ii) the redemption price, including all accumulated and unpaid Dis-
tributions to the date of redemption (the "Redemption Price"), to the
extent the Issuer has funds legally available therefor at such time,
with respect to any Trust Preferred Securities called for redemption by
the Issuer, and (iii) upon a voluntary or involuntary termination or
liquidation of the Issuer (other than in connection with the distribu-
tion of Partnership Preferred Securities to the Holders in exchange for
Trust Preferred Securities as provided in the Declaration or the
redemption of all of the Trust Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Trust Preferred Securities to the date of payment,
to the extent the Issuer has funds legally available therefor, and (b)
the amount of assets of the Issuer, after satisfaction of all liabil-
ities, remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Trust Preferred Securities; provided,
however, that, in determining whether the holders of the requisite
percentage of Trust Preferred Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not apply to Trust Preferred
Securities beneficially owned by the Guarantor or any Affiliate of the
Guarantor.
"Indemnified Person" means the Trust Preferred Guarantee
Trustee, any Affiliate of the Trust Preferred Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Trust Preferred
Guarantee Trustee.
"Majority in liquidation amount of the Trust Preferred Securi-
ties" means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of Trust Preferred Securities, voting separately as a class,
of more than 50% of the aggregate liquidation amount (including the
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Trust Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the President, a Vice
President or the Treasurer, and by an Assistant Treasurer, the Secretary
or an Assistant Secretary of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant
provided for in this Trust Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Partnership" means UDS Funding I, L.P.
"Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of June
25, 1997, among Ultramar Diamond Shamrock Corporation, a Delaware corpo-
ration, as general partner, H. Xxxx Xxxxx, as initial limited partner
and such other persons who become limited partners as provided therein.
"Partnership Preferred Securities" means those securities
representing limited partnership interests in the Partnership.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision there-
of, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Trust
Preferred Guarantee Trustee, the chairman or vice-chairman of the board
of directors, the chairman or vice-chairman of the executive committee
of the board of directors, the president, any vice president (whether or
not designated by a number or a word or words added before or after the
title "vice president"), the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier,
any trust officer or assistant trust officer, or any other officer of
the Trust Preferred Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
"Rights Agreement" means the Rights Agreement dated June 25,
1992, as amended, between the Guarantor and Registrar and Transfer
Company, or any successor to such Rights Agreement.
"Senior Indebtedness" means any indebtedness of the Guarantor
for money borrowed, except for trade credit and any such indebtedness
that is by its terms subordinated to or pari passu with the debt
instrument of the Guarantor purchased by the Partnership (the "Company
Debenture"), as the case may be.
"Successor Trust Preferred Guarantee Trustee" means a succes-
sor Trust Preferred Guarantee Trustee possessing the qualifications to
act as Trust Preferred Guarantee Trustee under Section 4.1.
"Trust Common Securities" means the securities representing
common undivided beneficial interests in the assets of the Issuer.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Preferred Guarantee Trustee" means The Bank of New
York, a New York banking corporation, until a Successor Trust Preferred
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Trust Preferred Securities Guarantee and
thereafter means each such Successor Trust Preferred Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together
with the Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be part
of this Trust Preferred Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Trust
Preferred Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Trust Guarantee Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of Trust Preferred Securities. If
the Trust Guarantee Trustee is not the Registrar, the Guarantor shall
furnish to the Trust Guarantee Trustee semi-annually on or before June
15 and December 15 in each year, and at such other times as the Trust
Guarantee Trustee may request in writing, a list, in such form and as of
such date as the Trust Guarantee Trustee may require, containing all the
information in the possession or control of the Registrar, the Guarantor
or any of its Paying Agents other than the Trust Guarantee Trustee as to
the names and addresses of Holders of Trust Preferred Securities. If
there are unregistered securities outstanding, even if the Trust
Guarantee Trustee is the Registrar, the Guarantor shall furnish to the
Trust Guarantee Trustee such a list containing such information with
respect to Holders of such unregistered securities only.
(b) The Trust Preferred Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15,
1998, the Trust Preferred Guarantee Trustee shall provide to the Holders
of the Trust Preferred Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Trust
Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Trust Preferred Guarantee
Trustee such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times re-
quired by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Preferred Guarantee
Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Trust Preferred Securities Guarantee that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Pre-
ferred Securities may, by vote, on behalf of the Holders of all of the
Trust Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Trust Preferred Securities
Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Trust Preferred Guarantee Trustee shall, within 90
days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Trust Preferred
Securities, notices of all Events of Default actually known to a
Responsible Officer of the Trust Preferred Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provid-
ed, that, except in the case of default in any Guarantee Payment, the
Trust Preferred Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trust Preferred
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Trust Preferred
Securities Trust Preferred Securities.
(b) The Trust Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Trust Preferred
Guarantee Trustee shall have received written notice, or a Responsible
Officer of the Trust Preferred Guarantee Trustee charged with the admin-
istration of the Declaration shall have obtained actual knowledge, of
such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Trust Preferred Securities Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee
(a) This Trust Preferred Securities Guarantee shall be held
by the Trust Preferred Guarantee Trustee for the benefit of the Holders
of the Trust Preferred Securities, and the Trust Preferred Guarantee
Trustee shall not transfer this Trust Preferred Securities Guarantee to
any Person except a Holder of Trust Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Trust
Preferred Guarantee Trustee on acceptance by such Successor Trust
Preferred Guarantee Trustee of its appointment to act as Successor Trust
Preferred Guarantee Trustee. The right, title and interest of the Trust
Preferred Guarantee Trustee shall automatically vest in any Successor
Trust Preferred Guarantee Trustee, and such vesting and succession of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor
Trust Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Trust Preferred Guarantee Trustee has occurred and is
continuing, the Trust Preferred Guarantee Trustee shall enforce this
Trust Preferred Securities Guarantee for the benefit of the Holders of
the Trust Preferred Securities.
(c) The Trust Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing or waiver of all
Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Trust Preferred
Securities Guarantee, and no implied covenants shall be read into this
Trust Preferred Securities Guarantee against the Trust Preferred
Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known
to a Responsible Officer of the Trust Preferred Guarantee Trustee, the
Trust Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Trust Preferred Securities Guarantee, and
use the same degree of care and skill in its exercise thereof, as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Trust Preferred Securities Guarantee
shall be construed to relieve the Trust Preferred Guarantee Trustee from
liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Trust Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Trust Preferred Securities Guarantee, and
the Trust Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Trust Preferred Securities
Guarantee, and no implied covenants or obligations shall be
read into this Trust Preferred Securities Guarantee against
the Trust Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Trust
Preferred Guarantee Trustee, the Trust Preferred Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trust Preferred Guarantee Trustee and conforming to the
requirements of this Trust Preferred Securities Guarantee; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Trust Preferred Guarantee Trustee, the Trust Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of
this Trust Preferred Securities Guarantee;
(ii) the Trust Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Respon
sible Officer of the Trust Preferred Guarantee Trustee, unless it
shall be proved that the Trust Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Trust Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the Holders of
a Majority in liquidation amount of the Trust Preferred Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trust Preferred Guarantee Trustee,
or exercising any trust or power conferred upon the Trust Preferred
Guarantee Trustee under this Trust Preferred Securities Guarantee;
and
(iv) no provision of this Trust Preferred Securities Guaran
tee shall require the Trust Preferred Guarantee Trustee to expend
or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trust Preferred
Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not assured to it under
the terms of this Trust Preferred Securities Guarantee or indemni
ty, reasonably satisfactory to the Trust Preferred Guarantee Trust
ee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Trust Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Trust
Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by
the Guarantor.
(iv) The Trust Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Trust Preferred Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authoriza
tion and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or
any of its Affiliates and may include any of its employees. The
Trust Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Trust
Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Trust Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Trust Preferred Securities Guarantee at the request or direc
tion of any Holder, unless such Holder shall have provided to the
Trust Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Trust Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses
and the expenses of the Preferred Guarantee Trustee's agents, xxxx
xxxx or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Trust Preferred Guarantee
Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Trust Preferred Guarantee
Trustee, upon the occurrence of an Event of Default, of its obliga
tion to exercise the rights and powers vested in it by this Trust
Preferred Securities Guarantee.
(vii) The Trust Preferred Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, deben
ture, note, other evidence of indebtedness or other paper or docu
ment, but the Trust Preferred Guarantee Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Trust Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Trust Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Trust Preferred Guarantee Trust
ee or its agents hereunder shall bind the Holders of the Trust
Preferred Securities, and the signature of the Trust Preferred
Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Trust Preferred
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Trust Preferred Securities Guarantee,
both of which shall be conclusively evidenced by the Trust
Preferred Guarantee Trustee or its agent taking such action.
(x) Whenever in the administration of this Trust Preferred
Securities Guarantee the Trust Preferred Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the Trust
Preferred Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Trust Preferred
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be fully protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Trust Preferred Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it
in good faith, without negligence, and reasonably believed by it to
be authorized or within the discretion or rights or powers
conferred upon it by this Trust Preferred Securities Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Trust Preferred
Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trust Preferred Guarantee
Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority
available to the Trust Preferred Guarantee Trustee shall be construed to
be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Trust
Preferred Securities Guarantee
The recitals contained in this Trust Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the
Trust Preferred Guarantee Trustee does not assume any responsibility for
their correctness. The Trust Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Trust Preferred
Securities Guarantee.
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of
this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
(b) If at any time the Trust Preferred Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Trust
Preferred Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Trust Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trust Preferred Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred
Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Trust Preferred Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Trust
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Trust
Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Preferred Guarantee Trustee shall hold office
until a Successor Trust Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Trust Preferred
Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Trust
Preferred Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Trust Preferred
Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Trust Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Trust
Preferred Guarantee Trustee.
(d) If no Successor Trust Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Trust Preferred Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment
of a Successor Trust Preferred Guarantee Trustee. Such court may there-
upon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Trust Preferred Guarantee Trustee.
(e) No Trust Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Trust Preferred Guarantee
Trustee.
(f) Upon termination of this Trust Preferred Securities
Guarantee or removal or resignation of the Trust Preferred Guarantee
Trustee pursuant to this Section 4.2, the Guarantor shall pay to the
Trust Preferred Guarantee Trustee all amounts due to the Trust Preferred
Guarantee Trustee accumulated to the date of such termination, removal
or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by the Issuer), if, as and when due, regardless
of any defense, right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to
the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust
Preferred Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Trust Preferred Securities Guarantee shall in no
way be affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Trust
Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Trust
Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Trust Preferred Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any
of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Trust Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trust
Preferred Guarantee Trustee in respect of this Trust Preferred
Securities Guarantee or exercising any trust or power conferred upon the
Trust Preferred Guarantee Trustee under this Trust Preferred Securities
Guarantee.
(b) If the Trust Preferred Guarantee Trustee fails to enforce
its rights under the Trust Preferred Securities Guarantee after a Holder
of Trust Preferred Securities has made a written request, such Holder of
Trust Preferred Securities may institute a legal proceeding directly
against the Guarantor to enforce the Trust Preferred Guarantee Trustee's
rights under this Trust Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Trust Preferred
Guarantee Trustee or any other person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a guarantee payment, a
Holder of Trust Preferred Securities may directly institute a proceeding
in such Holder's own name against the Guarantor for enforcement of the
Trust Preferred Securities Guarantee for such payment. The Guarantor
waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Trust Preferred Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this Trust
Preferred Securities Guarantee; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law)
be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in
all cases as a result of payment under this Trust Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and
unpaid under this Trust Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to
pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Trust
Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Trust Preferred Securities Guarantee notwithstanding
the occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding,
if (a) for any distribution period, full distributions on a cumulative
basis on any Trust Preferred Securities have not been paid or declared
and set apart for payment, (b) an Investment Event of Default by any
Investment Affiliate in respect of any Affiliate Investment Instrument
has occurred and is continuing, or (c) the Guarantor is in default of
its obligations under the Trust Preferred Securities Guarantee, the
Trust Common Securities Guarantee, the Partnership Guarantee or any
Investment Guarantee, then, during such period (i) the Guarantor shall
not declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect
to any of its capital stock or comparable equity interest (except for
(x) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, its capital stock and
conversions or exchanges of common stock of one class into common stock
of another class and (y) redemptions or purchases of any rights pursuant
to the Rights Agreement and the issuance of common stock pursuant to
such rights) and (ii) the Guarantor shall not make, or permit any
Finance Subsidiary to make, any payments that would enable any Finance
Subsidiary to make, any payment of any dividends on, any distribution
with respect to, or any redemption, purchase or other acquisition of, or
any liquidation payment with respect to, any preferred security or
comparable equity interest of any Finance Subsidiary.
SECTION 6.2 Ranking
(a) This Trust Preferred Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate
and junior in right of payment to all other liabilities of the
Guarantor, (ii) pari passu with the most senior preferred or preference
stock now or hereafter issued by the Guarantor and with any other
guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Finance Subsidiary, and (iii)
senior to the Guarantor's common stock. Any similar guarantee given
hereafter by the Guarantor with respect to Trust Preferred Securities
that is silent as to seniority will rank pari passu with this Trust
Preferred Securities Guarantee.
(b) The holders of obligations of the Guarantor that are
senior to the obligations under the Trust Preferred Securities Guarantee
(including, but not limited to, obligations constituting Senior
Indebtedness) will be entitled to the same rights upon payment default
or dissolution, liquidation and reorganization in respect of the Trust
Preferred Securities Guarantee, the same rights with respect to
modification of terms, and the same rights in all other respects, that
inure to the holders of "Senior Indebtedness" under Article Eleven of
the Indenture dated as of June 25, 1997 between Ultramar Diamond
Shamrock Corporation and The Bank of New York as against the holders of
the Company Debenture, and the holders of the Trust Preferred Securities
will be subject to all the terms and conditions of such Article Eleven
with respect to any claims or rights hereunder with the same effect as
though fully set forth herein.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate upon
(i) full payment of the Redemption Price of all Trust Preferred Securi-
ties, (ii) upon the distribution of the Partnership Preferred Securities
to the Holders of all of the Trust Preferred Securities or (iii) upon
full payment of the amounts payable in accordance with the Declaration
upon liquidation of the Issuer. Notwithstanding the foregoing, this
Trust Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of
Trust Preferred Securities must restore payment of any sums paid under
the Trust Preferred Securities or under this Trust Preferred Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith
in accordance with this Trust Preferred Securities Guarantee and in a
manner that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Trust Preferred Securities Guarantee or by law, except that an Indemni-
fied Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor
by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who
has been selected with reasonable care by or on behalf of the Guarantor,
including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which
Distributions to Holders of Trust Preferred Securities might properly be
paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs
and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Trust Preferred Securities
Guarantee or the earlier resignation or removal of the Trust Preferred
Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust Prefer-
red Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Trust Preferred Securities then
outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Trust Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least a
Majority in liquidation amount of the Trust Preferred Securities
(including the stated amount that would be paid on redemption, liquida-
tion or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined). The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders of
the Securities apply to the giving of such approval.
SECTION 9.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into any
other corporation; provided, that in any such case, (i) either the
Guarantor shall be the continuing corporation, or the successor
corporation shall be a corporation organized and existing under the laws
of the United States of America thereof and such successor corporation
shall expressly assume the due and punctual payment of the Guarantee
Payments payable pursuant to Section 5.1 hereof and the due and punctual
performance and observance of all of the covenants and conditions of
this Trust Preferred Securities Guarantee to be performed by the
Guarantor by a separate guarantee satisfactory to the Trust Preferred
Guarantee Trustee, executed and delivered to the Trust Preferred
Guarantee Trustee by such corporation, and (ii) the Guarantor or such
successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale, lease or conveyance, be in
default in the performance of any such covenant or condition.
SECTION 9.4 Notices
All notices provided for in this Trust Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) If given to the Trust Preferred Guarantee Trustee, at the
Trust Preferred Guarantee Trustee's Corporate Trust Office.
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Trust Preferred Securities):
Ultramar Diamond Shamrock
Corporation
0000 Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Treasurer
(c) If given to any Holder of Trust Preferred Securities, at
the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or
inability to deliver.
SECTION 9.5 Benefit
This Trust Preferred Securities Guarantee is solely for the
benefit of the Holders of the Trust Preferred Securities and, subject to
Section 3.1(a), is not separately transferable from the Trust Preferred
Securities.
SECTION 9.6 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
ULTRAMAR DIAMOND SHAMROCK CORPORATION,
as Guarantor
By: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as
Trust Preferred Guarantee Trustee
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Vice President
