EXHIBIT 4.7
PARTNERSHIP PREFERRED SECURITIES GUARANTEE AGREEMENT
UDS Funding I, L.P.
Dated as of June 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee
SECTION 2.2. Waiver of Notice and Demand
SECTION 2.3. Obligations Not Affected
SECTION 2.4. Rights of Holders
SECTION 2.5. Guarantee of Payment
SECTION 2.6. Subrogation
SECTION 2.7. Independent Obligations
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1. Limitation of Transactions
SECTION 3.2. Ranking
ARTICLE IV
TERMINATION
SECTION 4.1. Termination
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Successors and Assigns
SECTION 5.2. Amendments
SECTION 5.3. Consolidations and Mergers
SECTION 5.4. Notices
SECTION 5.5. Benefit
SECTION 5.6. Governing Law
PARTNERSHIP PREFERRED SECURITIES GUARANTEE AGREEMENT
This PARTNERSHIP PREFERRED SECURITIES GUARANTEE AGREEMENT (the
"Partnership Guarantee"), dated as of June 25, 1997, is executed and
delivered by Ultramar Diamond Shamrock Corporation, a Delaware corpo-
ration (the "Guarantor"), for the benefit of the holders from time to
time of the Partnership Preferred Securities (as defined below).
WHEREAS, pursuant to an Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement"), dated as of the date
hereof, of UDS Funding I, L.P., a Delaware limited partnership (the
"Issuer"), the Issuer may issue a single series of limited partner
interests in the Issuer (the "Partnership Preferred Securities");
WHEREAS, pursuant to the Partnership Agreement, the proceeds
received by the Issuer from the issuance and sale of the Partnership
Preferred Securities will be invested by the Issuer in the Affiliate
Investment Instruments and Eligible Debt Securities (each as defined in
the Partnership Agreement); and
WHEREAS, the Guarantor, as incentive for the Holders (as
defined herein) to purchase Partnership Preferred Securities, desires
hereby irrevocably and unconditionally to agree, to the extent set forth
herein, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Partnership Preferred Securities, which purchase the Guarantor
hereby acknowledges shall directly or indirectly provide at least some
material benefit to the Guarantor, the Guarantor executes and delivers
this Partnership Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions
As used in this Partnership Guarantee, the terms set forth
below shall, unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Partnership Agreement.
"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.
"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" shall mean the following payments or
distributions, without duplication, with respect to the Partnership
Preferred Securities, to the extent not paid or made by the Issuer: (i)
any accumulated and unpaid distributions that have theretofore been de-
clared on the Partnership Preferred Securities out of funds legally
available therefor at such time, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"), payable out of funds legally available therefor at
such time, with respect to any Partnership Preferred Securities called
for redemption by the Issuer, and (iii) upon a voluntary or involuntary
termination or liquidation of the Issuer, the lesser of (a) the aggre-
gate of the liquidation preference and all accumulated and unpaid dis-
tributions on the Partnership Preferred Securities to the date of pay-
ment out of funds legally available therefor and (b) the amount of
assets of the Issuer after satisfaction of all liabilities 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 Partnership Preferred Securities;
provided, however, that in determining whether the holders of the requi-
site percentage of Partnership Preferred Securities have given any re-
quest, notice, consent or waiver hereunder, "Holder" shall not apply to
Partnership Preferred Securities owned beneficially by the Guarantor or
any Affiliate of the Guarantor.
"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 instru-
ment of the Guarantor purchased by the Partnership (the "Company
Debenture"), as the case may be.
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments, as and when due (without
duplication of amounts theretofore paid by the Issuer), regardless of
any defense, right of set-off or counterclaim which 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 2.2. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Partnership Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceed-
ing first against the Issuer, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 2.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Partnership 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
Partnership 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 Partnership Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of,
or in connection with, the Partnership 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 Partnership Preferred Securities;
(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
Partnership 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 2.3 that the obliga-
tions of the Guarantor hereunder shall be absolute and uncondition-
al 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 2.4. Rights of Holders
The Guarantor expressly acknowledges that (i) this Partnership
Guarantee will be deposited with the General Partner to be held for the
benefit of the Holders; (ii) in the event of the appointment of a Spe-
cial Representative to, among other things, enforce this Partnership
Guarantee, the Special Representative may take possession of this Part-
nership Guarantee for such purpose; (iii) if no Special Representative
has been appointed, the General Partner has the right to enforce this
Partnership Guarantee on behalf of the Holders; (iv) the Holders of not
less than a majority in aggregate liquidation preference of the
Partnership Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available
in respect of this Partnership Guarantee including the giving of direc-
tions to the General Partner or the Special Representative, as the case
may be; and (v) if the General Partner or Special Representative fails
to enforce this Partnership Guarantee after a Holder has made a written
request and as above provided, any Holder may institute a legal proceed-
ing directly against the Guarantor to enforce its rights under this
Partnership Guarantee, without first instituting a legal proceeding
against the Issuer or any other person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a guarantee payment, a
Holder may directly institute a proceeding against Guarantor to enforce
such payment under this Partnership Guarantee.
SECTION 2.5. Guarantee of Payment
This Partnership Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the
Issuer.
SECTION 2.6. Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to the
Holders by the Guarantor under this Partnership 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
rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment
under this Partnership Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Partnership 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 2.7. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Part-
nership 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 Partnership Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (f), inclusive, of
Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
So long as any Partnership Preferred Securities remain
outstanding, if (a) for any distribution period, full distributions on a
cumulative basis on any Partnership Preferred Securities have not been
paid or declared and set apart for payment, (b) there shall have oc-
curred an Event of Default under the Partnership Agreement or (c) the
Guarantor shall be in default with respect to its payment obligations
under this Partnership Guarantee, the Trust Preferred Securities Guaran-
tee, the Trust Common Securities 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 exchang-
es 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 3.2. Ranking
(a) This Partnership 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 hereaf-
ter issued from time to time by the Guarantor and with any other guaran-
tee 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 Partnership Preferred Secu-
rities that is silent as to seniority will rank pari passu with this
Partnership Guarantee.
(b) The holders of obligations of the Guarantor that are
senior to the obligations under the Partnership 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 Partnership 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 In-
debtedness" 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 holders of the Company Debenture, and the holders of the
Partnership 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 IV
TERMINATION
SECTION 4.1. Termination
This Partnership Guarantee shall terminate and be of no
further force and effect, as to the Partnership Preferred Securities,
upon full payment of the Redemption Price of all Partnership Preferred
Securities, and will terminate completely upon full payment of the
amounts payable in accordance with the Partnership Agreement upon
liquidation of the Issuer. This Partnership Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time
any Holder must, in accordance with Delaware Revised Uniform Limited
Partnership Act, restore payment of any sums paid under any Partnership
Preferred Securities or this Partnership Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Successors and Assigns
All guarantees and agreements contained in this Partnership
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Partnership Preferred Securities then outstanding.
SECTION 5.2. Amendments
Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will
be required), this Partnership Guarantee may only be amended with the
prior approval of the Holders of not less than a majority in aggregate
liquidation preference of all the outstanding Partnership Preferred
Securities.
SECTION 5.3. 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 corpora-
tion 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 per-
formance and observance of all of the covenants and conditions of this
Partnership Guarantee to be performed by the Guarantor by a separate
guarantee satisfactory to the Trust Preferred Guarantee Trustee (as
defined in the Trust Preferred Securities Guarantee Agreement dated as
of June 25, 1997), executed and delivered to the Trust Preferred Guaran-
tee Trustee by such corporation, and (ii) the Guarantor or such succes-
sor 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 5.4. Notices
Any notice, request or other communication required or
permitted to be given hereunder to the Guarantor shall be given in
writing by delivering the same against receipt therefor by facsimile
transmission (confirmed by mail), addressed to the Guarantor, as follows
(and if so given, shall be deemed given when mailed):
Ultramar Diamond Shamrock Corporation
0000 Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Treasurer
Any notice, request or other communication required or
permitted to be given hereunder to the Holders shall be given by the
Guarantor in the same manner as notices sent by the Issuer to the
Holders.
SECTION 5.5. Benefit
This Partnership Guarantee is solely for the benefit of the
Holders and is not separately transferable from the Partnership
Preferred Securities.
SECTION 5.6. Governing Law
THIS PARTNERSHIP GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS PARTNERSHIP GUARANTEE is executed as of the day and year
first above written.
ULTRAMAR DIAMOND SHAMROCK CORPORATION
By: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Vice President and Treasurer
