SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported)
June 20, 1997
ULTRAMAR DIAMOND SHAMROCK CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-11154 13-3663331
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
9830 Colonnade Blvd.,
San Antonio, Texas 78230
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code:(210) 641-6800
Item 5. Other Events
On June 20, 1997, Ultramar Diamond Shamrock Corporation (the
"Company") UDS Funding I, L.P. (the "Partnership"), and UDS Capital
I (the "Trust") entered into a Purchase Agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Paine
Webber Incorporated, Prudential Securities Inc. and Smith Barney
Inc., pursuant to which the Trust issued 8,000,000 8.32% Trust
Originated Preferred Securities (the "Trust Securities"), with an
aggregate liquidation value of $200,000,000, guaranteed to the extent
set forth therein by the Company. The proceeds of the issuance of the Trust
Securities were invested by the Trust in limited partnership interests
(the "Partnership Preferred Securities") of the Partnership, guaranteed to
the extent set forth therein by the Company. The proceeds of the issuance
of the Partnership Preferred Securities were invested by the
Partnership in a subordinated debenture (the "Subordinated
Debenture") issued by the Company, in debentures ( the "Subsidiary
Debentures") issued by two subsidiaries (the "Subsidiaries") of the
Company which were guaranteed to the extent set forth therein by
the Company, and in certain other eligible securities. The
proceeds of the issuance of the Subordinated Debenture and the
Subsidiary Debentures were used by the Company and the Subsidiaries
for general corporate purposes.
Item 7. Financial Statements and Exhibits
(c) Exhibits
1.1 Purchase Agreement dated June 20, 1997
4.1 Amended and Restated Declaration of Trust dated
June 25, 1997
4.2 Amended and Restated Agreement of Limited
Partnership dated June 25, 1997
4.3 Indenture for Subordinated Debt Securities dated
June 25, 1997
4.4 Certificate Evidencing Trust Preferred Securities
dated June 25, 1997
4.5 Certificate Evidencing Partnership Preferred
Securities dated June 25, 1997
4.6 Trust Preferred Securities Guarantee Agreement
dated June 25, 1997
4.7 Partnership Preferred Securities Guarantee
Agreement dated June 25, 1997
4.8 8.32% Subordinated Debenture Due 2017 dated June
25, 1997
24.1 Power of Attorney (Filed as Exhibit 24.1 to
Registration Statement No. 333-28737, and
incorporated herein by reference)
99.1 Certain Pro Forma Financial Statements
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
ULTRAMAR DIAMOND SHAMROCK CORPORATION
By:/s/ Todd Walker
Todd Walker, Attorney-In-Fact
July 17, 1997
W5169.TW
EXHIBIT 1.1
ULTRAMAR DIAMOND SHAMROCK CORPORATION
(a Delaware corporation)
UDS FUNDING I, L.P.
(a Delaware limited partnership)
UDS CAPITAL I
(a Delaware business trust)
8,000,000 Trust Preferred Securities
8.32% Trust Originated Preferred Securities SM ("TOPrS SM")
(Liquidation Amount of $25 per Preferred Security)
PURCHASE AGREEMENT
June 20, 1997
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Inc.
Smith Barney Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
UDS Capital I (the "Trust"), a statutory business trust organized
under the Business Trust Act (the "Delaware Trust Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section
3801 et seq.), UDS Funding I, L.P. (the "Partnership"), a limited
partnership organized under the Revised Uniform Limited Partnership Act
(the "Delaware Partnership Act") of the State of Delaware (Chapter 17,
Title 6, of the Delaware Code, 6 Del. C. Section 17101 et seq.), and
Ultramar Diamond Shamrock Corporation, a Delaware corporation (the
"Company" and, together with the Trust and the Partnership, the
"Offerors"), confirm their agreement (the "Agreement") with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other Underwriters named in Schedule A
hereto (collectively, the "Underwriters", which term shall also include
any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Lehman Brothers Inc., Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Prudential Securities Inc.
and Smith Barney Inc. are acting as representatives (in such capacity,
they shall hereinafter be referred to as the "Representatives"), with
respect to the issue and sale by the Trust and the purchase by the
Underwriters, acting severally and not jointly, of the respective
numbers of 8.32% Trust Originated Preferred Securities (liquidation
amount of $25 per preferred security) representing preferred undivided
beneficial ownership interests in the assets of the Trust ("TOPrS" or
the "Trust Preferred Securities") set forth in said Schedule A. The
Company will own all the common securities (the "Trust Common
Securities" and, together with the Trust Preferred Securities, the
"Trust Securities"), representing undivided beneficial ownership
interests in the assets of the Trust. The Trust Preferred Securities
and the Trust Common Securities will be issued pursuant to the amended
and restated declaration of trust of the Trust, dated as of June 25,
1997 (the "Declaration"), among the Company, as Sponsor, H. Pete Smith,
Steve Blank and Patti K. Meisetschleager, as regular trustees (the
"Regular Trustees"), The Bank of New York, as institutional trustee (the
"Property Trustee") and The Bank of New York (Delaware), as Delaware
trustee (the "Delaware Trustee" and, together with the Regular Trustees
and the Property Trustee, the "Issuer Trustees"), and the holders from
time to time of undivided beneficial interests in the assets of the
Trust. The Trust Preferred Securities will be guaranteed by the
Company, to the extent set forth in the Prospectus with respect to
distributions and payments upon liquidation, redemption and otherwise
pursuant to the Trust Preferred Securities Guarantee Agreement (the
"Trust Guarantee"), to be dated as of June 25, 1997, between the Company
and The Bank of New York, as trustee (the "Guarantee Trustee").
The proceeds from the sale of the Trust Securities will be used by
the Trust to purchase partnership preferred securities ("Partnership
Preferred Securities"), representing all of the limited partner
interests of the Partnership. All of the general partner interests will
be owned by the Company, which initially shall be sole general partner
(in such capacity, the "General Partner"). The Partnership Preferred
Securities will be issued pursuant to an amended and restated agreement
of limited partnership, to be dated as of June 25, 1997 (the
"Partnership Agreement"), among the Company, as general partner, and H.
Pete Smith, as initial limited partner, and such other persons who
become limited partners thereto, and will be guaranteed by the Company,
to the extent set forth in the Prospectus, with respect to distributions
and payments upon liquidation and redemption pursuant to the Partnership
Guarantee Agreement (the "Partnership Guarantee" and, together with the
Trust Guarantee, the "Guarantees"). The Trust Preferred Securities and
the related Trust Guarantee, together with the Partnership Preferred
Securities and the related Partnership Guarantee, are referred to herein
as the "Offered Securities."
The Partnership will use the proceeds from the sale of the
Partnership Preferred Securities and the capital contribution of the
General Partner to acquire, among other things, (i) a subordinated
debenture (the "Company Debenture") of the Company and (ii) senior
debentures of two or more wholly-owned subsidiaries of the Company (the
"Investment Subsidiaries", and together with the Company, the
"Investment Affiliates"). The debentures to be issued by the Investment
Subsidiaries (collectively, the "Subsidiary Debentures" and, together
with the Company Debenture, the "Debentures") are to be fully and
unconditionally guaranteed (the "Investment Guarantees") by the Company
(the "Debenture Guarantor"). Each of the Debentures shall be issued
pursuant to an indenture (each an "Indenture"), dated as of June 25,
1997, among the applicable Investment Affiliate and The Bank of New
York, as trustee (the "Debt Trustee").
The Offerors understand that the Underwriters propose to make a
public offering of the Offered Securities as soon as the Representatives
deem advisable after this Agreement has been executed and delivered and
the Declaration, Trust Guarantee, Indenture relating to the Company
Debenture and the Investment Guarantees have been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act").
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-28737)
covering the registration under the Securities Act of 1933, as amended
(the "1933 Act"), of (i) the Trust Preferred Securities, (ii) the Trust
Guarantee, (iii) the Partnership Preferred Securities, (iv) the
Partnership Guarantee, (v) the Company Debenture and (vi) the Investment
Guarantees. Promptly after execution and delivery of this Agreement,
the Offerors will either (i) prepare and file a prospectus in accordance
with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933
Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet
(a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term
Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part
of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to
as "Rule 434 Information." Each prospectus used before such registration
statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that
was used after such effectiveness and prior to the execution and
delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, as amended, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time
it became effective and including the Rule 430A Information and the Rule
434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of
the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The
final prospectus, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form
first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated June 17, 1997 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus,
the Prospectus or any Term Sheet or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which are "contained," "included" or
"stated" in the Registration Statement, any preliminary prospectus or
the Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to
the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the "1934 Act") which is
incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, and
as of the Closing Time referred to in Section 2(b) hereof, and agrees
with each underwriter, as follows:
(i) Compliance with Registration Requirements. The Offerors
meet the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information has
been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, any Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations"), and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus and at the Closing Time, the
Prospectus and any amendments or supplements thereto did not and will
not 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.
If Rule 434 is used, the Offerors will comply with the requirements of
Rule 434. The representations and warranties in this subsection shall
not apply to (A) statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement or
Prospectus or (B) that part of the Registration Statement that
constitutes the Statement of Eligibility on Form T-1 (the "Form T-1")
under the 1939 Act of a trustee.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and any supporting Schedules thereto included
in the Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the
Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statements of consolidated earnings,
consolidated stockholders' equity and consolidated cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved except as otherwise
described therein. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information of the Company required to be stated therein. Except as
otherwise described therein, the selected financial data and the summary
financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements incorporated by reference in the Registration Statement and
the Prospectus.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those arising
in the ordinary course of business, which are material with respect to
the Company and its subsidiaries considered as one enterprise and (C)
except for regular quarterly dividends on the outstanding common stock
of the Company and regular dividends on the outstanding preferred stock
of the Company in amounts per share that are consistent with the terms
of such preferred stock, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
Company which is a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X under the 1933 Act (each a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in
the Registration Statement, all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued and
is fully paid and non-assessable and is owned by the Company, directly
or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of preemptive or similar rights of any securityholder of such
Subsidiary. The only Subsidiaries of the Company are (A) the
subsidiaries listed in Exhibit 21 to the Annual Report on Form 10-K of
the Company for the fiscal year ended December 31, 1996, filed with the
Commission under Section 13 of the 1934 Act, and (B) Ultramar Inc.
(Nevada), each of which is a Subsidiary for the purposes hereof.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Offerors.
(ix) Authorization of the Debentures and Indentures. Each
Indenture has been duly authorized, duly executed and delivered by the
applicable Investment Affiliate and, when duly executed and delivered by
the Debt Trustee, will constitute a valid and binding agreement of such
Investment Affiliate enforceable against such Investment Affiliate in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) (the "Bankruptcy Exceptions"). The Indenture of the
Company has been duly qualified under the 1939 Act. The Debentures have
been duly authorized for issuance and sale pursuant to this Agreement
and, at the Closing Time, will have been duly executed by the applicable
Investment Affiliate and, when authenticated, issued and delivered in
the manner provided for in the applicable Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and legally binding obligations of such
Investment Affiliate, enforceable against such Investment Affiliate in
accordance with their terms, except as the enforcement thereof may be
limited by the Bankruptcy Exceptions.
(x) Authorization of Investment Guarantees. The Investment
Guarantees have been duly authorized and, at the Closing Time, will have
been duly executed and delivered by the Debenture Guarantor, and, when
authenticated in the manner provided in the Investment Guarantee, will
constitute a valid and binding obligation of the Debenture Guarantor,
enforceable against the Debenture Guarantor in accordance with its
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions. The Investment Guarantees have been duly
qualified under the 1939 Act.
(xi) Due Authorization of Additional Agreements. Each of the
Trust Guarantee, Partnership Guarantee and Investment Guarantees (the
"Transaction Documents") and the Debentures and Indentures has been duly
authorized, executed and delivered by the applicable Investment
Affiliate, and each agreement constitutes a valid and binding agreement
of the applicable Investment Affiliate, except as enforcement thereof
may be limited by the Bankruptcy Exceptions.
(xii) Description of Additional Agreements. The Offered
Securities and the Declaration, the Partnership Agreement, the Trust
Guarantee and the Partnership Guarantee will conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments"),
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of the Transaction
Documents by the Company, the Debentures and the Indentures by the
Company or the applicable Investment Subsidiary, as the case may be, and
any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Offered Securities and the use
of the proceeds from the sale of the Offered Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by
the Company with its obligations hereunder and thereunder do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or a default or
Repayment Event (as defined below) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary of the Company pursuant to, the
Agreements and Instruments (except for such conflicts, breaches,
defaults, events, liens, charges or encumbrances that would not result
in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness of the Company or any of its Subsidiaries (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its Subsidiaries.
(xiv) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is imminent, which may reasonably be expected
to result in a Material Adverse Effect.
(xv) Absence of Proceedings. There is not any action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any of its Subsidiaries, which is required to be disclosed in
the Registration Statement and the Prospectus (other than as stated
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the assets, properties, or operations thereof or the
consummation of the transactions contemplated in the Transaction
Documents and the Debentures and the Indentures or the performance by
the Company and the applicable Investment Affiliate, respectively, of
their obligations hereunder and thereunder.
(xvi) Exhibits. There are no contracts or documents which
are of a character required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement, in connection with the offering,
issuance or sale of the Offered Securities hereunder or the consummation
of the transactions contemplated under this Agreement, or the due
execution, delivery or performance of any Indenture except such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations or state
securities laws.
(xviii) [Reserved].
(xix) Possession of Licenses and Permits. The Company and
its Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to so possess such Governmental Licenses would not,
singly or in the aggregate, have a Material Adverse Effect; the Company
and its Subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(xx) Title to Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the Company
and its Subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind,
except such as (A) are described in the Registration Statement and the
Prospectus or (B) do not, singly or in the aggregate, materially affect
the value of such property, do not interfere with the use made and
proposed to be made of such property by the Company or any of its
Subsidiaries and do not, singly or in the aggregate have a Material
Adverse Effect; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries holds
properties described in the Prospectus, are in full force and effect,
except where the failure of such leases or subleases to be in full force
and effect would not have a Material Adverse Effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease which could reasonably be
expected to result in a Material Adverse Effect.
(xxi) [Reserved].
(xxii) Investment Company Act. The Company is not, and upon
the issuance and sale of the Trust Preferred Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) Authorization of Trust Guarantee. The Trust
Guarantee has been duly authorized by the Company and, when validly
executed and delivered by the Company, and, assuming due authorization,
execution and delivery of the Trust Guarantee by the Guarantee Trustee,
will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Trust Guarantee has been duly qualified under the
1939 Act.
(xxiv) Authorization of Partnership Guarantee. The
Partnership Guarantee has been duly authorized by the Company and, when
validly executed and delivered by the Company will constitute a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(b) Officers' Certificates. Any certificate signed by any officer
of the Company or any of its Subsidiaries and delivered to any
Underwriter or to counsel for the Underwriters in connection with the
offering of the Offered Securities shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby on the date of such certificate.
(c) Representations and Warranties by the Trust, Partnership and
Company. The Offerors, jointly and severally, represent and warrant to
each Underwriter as of the date hereof, and as of the Closing Time
referred to in Section 2(b) herein, as follows:
(i) Good Standing of Trust. The Trust has been duly created
and is validly existing in good standing as a business trust under the
Delaware Trust Act with the power and authority to own property and to
conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under this
Agreement, the Trust Preferred Securities, the Trust Common Securities
and the Declaration; the Trust is duly qualified to transact business as
a foreign business trust and is in good standing in any other
jurisdiction in which such qualification is necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Trust; the Trust is not a party to
or otherwise bound by any agreement other than those described in the
Prospectus; and as of the Closing Date the Trust will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(ii) Authorization of Declaration. The Declaration has been
duly authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company, as Sponsor, and the
Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Property Trustee, the Declaration will, at the
Closing Time, be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and at the Closing Time, the Declaration will have been duly
qualified under the 1939 Act.
(iii) Authorization of Trust Common Securities. The Trust
Common Securities have been duly authorized by the Declaration and, when
issued and delivered by the Trust to the Company against payment
therefor as described in the Registration Statement and Prospectus, will
be validly issued and (subject to the terms of the Declaration) fully
paid undivided beneficial interests in the assets of the Trust and will
conform to all statements relating thereto contained in the Prospectus;
the issuance of the Trust Common Securities is not subject to preemptive
or other similar rights; and at the Closing Time all of the issued and
outstanding Trust Common Securities of the Trust will be directly owned
by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(iv) Authorization of Trust Preferred Securities. The Trust
Preferred Securities have been duly authorized by the Declaration and,
when issued and delivered against payment of the consideration set forth
in this Agreement, will be validly issued and (subject to the terms of
the Declaration) fully paid and nonassessable undivided beneficial
interests in the Trust, will be entitled to the benefits of the
Declaration and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Trust Preferred
Securities is not subject to preemptive or other similar rights; and
(subject to the terms of the Declaration) holders of Trust Preferred
Securities will be entitled to the same limitation of personal liability
under Delaware law as extended to stockholders of private corporations
for profit.
(v) Regular Trustees. Each of the Regular Trustees of the
Trust is an employee of the Company; the Declaration has been duly
executed and delivered by the Regular Trustees and is a valid and
binding obligation of each Regular Trustee, enforceable against such
Regular Trustee in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(vi) Good Standing of the Partnership. The Partnership has
been duly formed and is validly existing in good standing as a limited
partnership under the Delaware Partnership Act with the power and
authority to own property and to conduct its business as described in
the Registration Statement and Prospectus and to enter into and perform
its obligations under this Agreement, the Partnership Preferred
Securities and the Partnership Agreement; the Partnership is duly
qualified to transact business as a foreign limited partnership and is
in good standing in any other jurisdiction in which such qualification
is necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
Partnership; the Partnership is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; and as of the
Closing Time the Partnership will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(vii) Authorization of Partnership Agreement. The
Partnership Agreement has been duly authorized by the Company as general
partner and, as of the Closing Time, will have been duly executed and
delivered by the Company, and will be a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions, and will conform to the
description thereof in the Prospectus.
(viii) Authorization of Partnership Preferred Securities.
The Partnership Preferred Securities have been duly authorized by the
Partnership Agreement and, when issued and delivered pursuant to the
Partnership Agreement against payment of the consideration set forth
therein, will be duly issued and fully paid and not subject to
assessment for additional capital contributions, will be entitled to the
benefits of the Partnership Agreement; the issuance of the Partnership
Preferred Securities is not subject to preemptive or other similar
rights; assuming that the holders of Partnership Preferred Securities in
their capacities as such do not participate in the control of the
business of the Company, the holders of the Partnership Preferred
Securities, in their capacities as such, will have no liability in
excess of their obligations to make payments provided for in the Limited
Partnership Agreement (subject to the obligation of a holder of
Partnership Preferred Securities to repay any funds distributed to it).
(ix) General Partner Status. The Company is the sole general
partner of the Partnership.
(x) Investment Company Act. Neither the Trust nor the
Partnership is and, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as
described in the Prospectus, neither will be an "investment company"
under the 1940 Act.
(xi) Absence of Conflicts. The Trust is not in violation of
the Declaration or its certificate of trust filed with the State of
Delaware, dated June 5, 1997 (the "Certificate of Trust"); the
Partnership is not in violation of the Partnership Agreement or the
certificate of limited partnership, dated June 5, 1997 (the "Certificate
of Partnership"); and the execution, delivery and performance of
applicable Transaction Documents by the Partnership and the Trust and
the consummation of the transactions contemplated herein and therein and
compliance by the Partnership and the Trust with their respective
obligations hereunder and thereunder have been duly authorized by all
necessary action on the part of the Partnership and the Trust and do not
and will not result in any violation of the Declaration or Certificate
of Trust or the Partnership Agreement or the Certificate of Partnership
and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust or the Partnership under any existing
applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
or any regulatory body or administrative agency or other governmental
body having jurisdiction over the Trust or the Partnership or their
respective properties.
(xii) Absence of Further Requirements. No authorization,
approval, consent or order of any court or governmental authority or
agency is necessary in connection with the issuance, offer and sale of
the Trust Securities and the Partnership Preferred Securities, the
consummation of the transactions contemplated by this Agreement by the
Partnership or the Trust, or the execution, delivery, and performance by
the Partnership or the Trust of the applicable Transaction Documents,
except such as have already been obtained or as may be required under
the 1933 Act or the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations or state securities laws and the qualification of the
Declaration and the Trust Guarantee under the 1939 Act.
(xiii) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Trust or the Partnership,
threatened against or affecting the Trust or the Partnership that is
required to be disclosed in the Prospectus or that would result in any
material adverse change in the condition, financial or otherwise, or in
the results of operations, business affairs or business prospects of the
Trust or of the Company and its Subsidiaries, taken as a whole, or that
would materially and adversely affect the assets of the Trust or the
Partnership, or that could adversely affect the consummation of the
transactions contemplated in this Agreement.
SECTION 2 Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Trust agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Trust, at the initial public
offering price set forth in Schedule B, the number of Trust Preferred
Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Trust Preferred Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Trust Preferred Securities shall be made at the
offices of (i) Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York, or at such other place as shall be agreed
upon by the Representatives and the Company, at 9:00 A.M. (Eastern
time) on June 25, 1997 (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time").
Payment shall be made to the Trust by wire transfer of
immediately available funds to a bank account designated by the Company,
against delivery to such persons designated by the Representatives for
the respective accounts of the Underwriters of a certificate in global
form for the Trust Preferred Securities to be purchased by them. The
certificate in global form for the Trust Preferred Securities will be
made available for examination by the Representatives in The City of New
York not later than 2:00 P.M. (Eastern time) on the business day prior
to the Closing Time. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the Trust
Preferred Securities which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Trust Preferred Securities to be purchased by any Underwriter whose
funds have not been received by the Closing Time, but such payment shall
not relieve such Underwriter from its obligations hereunder.
The purchase price per Trust Preferred Security to be paid by
the several Underwriters for the Trust Preferred Securities shall be an
amount equal to the initial public offering price as set forth in
Schedule B. The initial public offering price per Trust Preferred
Security shall be a fixed price to be determined by agreement between
the Representatives and the Offerors. The initial public offering price
and the purchase price, when so determined, shall be set forth in
Schedule B.
As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the
Trust Preferred Securities will ultimately be used to purchase the
Debentures of the Company and the Investment Subsidiaries, the Company
hereby agrees to pay at Closing Time to the Representatives, for the
accounts of the several Underwriters, a commission per Trust Preferred
Security set forth on Schedule B.
At the Closing Time, the Company will pay, or cause to be
paid, the commission payable at such time to the Underwriters under
Section 2 hereof by wire transfer of immediately available funds to a
bank account designated by Merrill Lynch, Pierce, Fenner & Smith
Incorporated for the account of the Underwriters.
(c) [Reserved].
SECTION 3. Covenants of the Offerors. The Offerors covenant with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Offerors, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representatives promptly, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Offered Securities for offering
or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Offerors will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
they deem necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest practicable moment.
(b) Filing of Amendments. During the period when the Underwriters
are required to deliver a prospectus with respect to the Offered
Securities, the Offerors will give the Representatives notice of their
intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Offerors have
furnished or will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and conformed copies of all consents and certificates of
experts, and will also deliver to the Representatives, upon request and
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration Statement and
each amendment thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Offerors
hereby consent to the use of such copies for purposes permitted by the
1933 Act. The Offerors will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations and the 1939 Act and the 1939 Act Regulations
with respect to the offer of the Offered Securities so as to permit the
completion of the distribution of the Trust Preferred Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Trust Preferred Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters and for the Company, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Offered
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Representatives may designate
and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer
in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Offered Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use or cause to be used the
net proceeds received by and from the sale of the Offered Securities in
the manner specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Trust Preferred Securities on the New York Stock
Exchange.
(j) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of
each amendment thereto, (ii) the preparation, copying and delivery to
the Underwriters of this Agreement, the Declaration, the Partnership
Agreement, and the Indentures and such other documents as may be
required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery
of the global certificate for the Trust Preferred Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Offered
Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters
of copies of each preliminary prospectus, any Term Sheets and of the
Prospectus and any amendments or supplements thereto, (vii) the copying
of the Agreement Among Underwriters (viii) the preparation, copying and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (ix) the fees and expenses of the Property Trustee,
the Regular Trustees, the Delaware Trustee and the Trust Guarantee
Trustee, including the fees and disbursements of counsel for the
Trustees in connection with the Indentures, the Investment Guarantees
and the Debentures, (x) any fees payable in connection with the rating
of the Trust Preferred Securities, and (xi) the fees and expenses
incurred in connection with the listing of the Trust Preferred
Securities on the New York Stock Exchange; provided, however that the
Underwriters shall reimburse the Company for certain expenses incurred
in connection with the transactions contemplated by this Agreement as
may be agreed upon in writing.
(b) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or
Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for
all of their reasonable out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1
hereof or in certificates of any officer of the Company, the Trust, the
Partnership or any Subsidiary of the Company delivered pursuant to the
provisions hereof, to the performance by the Offerors of their covenants
and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information
shall have been complied with to the reasonable satisfaction of counsel
to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term
Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of (i) Patrick J. Guarino, Executive Vice President,
General Counsel and Secretary of the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A hereto and (ii) Skadden, Arps, Slate,
Meagher & Flom LLP, special Delaware counsel to the Company, the Trust,
and the Partnership, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such
letter for the Company and each of the Underwriters, to the effect set
forth in Exhibit B hereto. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Company and its
Subsidiaries and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters, in form and substance
satisfactory to the Underwriters. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(d) Opinion of Tax Counsel for Company, Trust and Partnership. At
Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Skadden, Arps, Slate, Meagher &
Flom LLP, special tax counsel to the Company, the Trust, and the
Partnership, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter
for the Company and each of the Underwriters, to the effect that under
current law, and based on certain representations, facts and assumptions
set forth in such opinion, (i) the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation, (ii) the Partnership will be
classified for United States federal income tax purposes as a
partnership and not as an association or publicly traded partnership
taxable as a corporation, (iii) the Debentures will be classified as
indebtedness of the relevant issuer for United States federal income tax
purposes, and (iv) the statements set forth in the Prospectus under the
caption "Certain Federal Income Tax Considerations," while general in
nature, constitute, in all material respects, a fair and accurate
summary of the anticipated United States federal income tax consequences
of the purchase, ownership and disposition of the Trust Preferred
Securities.
(e) Opinion of Counsel for the Property Trustee. At Closing Time,
the Representatives and the Company shall have received the favorable
opinion, dated as of Closing Time, of Emmet, Marvin & Martin, counsel
for the Property Trustee, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters, to the effect set forth in
Exhibit C hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(f) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus except as stated therein, any
Material Adverse Effect, and the Representatives shall have received a
certificate of the President or a Vice President of the Company or of
the chief financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1(a)
hereof are true and correct in all material respects with the same force
and effect as though expressly made at and as of Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and
(iv) to the knowledge of such officer, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(g) Accountants' Comfort Letters. At the time of the execution of
this Agreement, the Representatives shall have received from each of
Ernst & Young LLP and Arthur Andersen LLP, a letter dated such date, in
form and substance satisfactory to the Representatives, together with
signed or reproduced copies of such letter for each of the other
Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus
in a form acceptable to the Representatives.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from each of Ernst & Young LLP and
Arthur Andersen LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant
to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to
Closing Time.
(i) Maintenance of Rating. At Closing Time, the Trust Preferred
Securities shall be rated at least "baa3" by Moody's Investors Service
Inc. ("Moody's") and "BBB-" by Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. ("S&P"); and since the date
of this Agreement, there shall not have occurred a downgrading in the
rating assigned to the Trust Preferred Securities or the Company's debt
securities by Moody's or S&P and neither of such organizations shall
have publicly announced that it has under surveillance or review, its
rating of the Trust Preferred Securities or any of the Company's debt
securities.
(j) Approval of Listing. At Closing Time, the Trust Preferred
Securities shall have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(k) Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
(m) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Offerors agree jointly
and severally to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
furnished to the Offerors by any Underwriter through Merrill Lynch
expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Offerors, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the
Offerors, directors of the Company, the General Partner of the
Partnership, the Issuer Trustees of the Trust, each of the officers of
the Offerors who signed the Registration Statement, and each person, if
any, who controls any of the Offerors within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or
the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement.
In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch
and approved by the Company, such approval not to be unreasonably
withheld, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties
be liable for fees and expenses of more than one counsel (in addition to
any local counsel) in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances unless the named parties in
such action or separate but similar or related actions include both the
indemnifying and indemnified parties and legal defenses available to the
indemnified party create a conflict of interest with the indemnifying
party, in which case the indemnified party shall have the right to
employ separate counsel, and the indemnifying party shall bear the
reasonable fees and expenses of such separate counsel, provided that the
indemnifying party shall not be responsible for the fees and expenses of
more than one such separate counsel (in addition to any local counsel)
for all indemnified parties. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. 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 and shall have provided to the indemnifying party all
information and documentation reasonably requested by the indemnifying
party regarding such fees and expenses (collectively, a "Completed
Request"), such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid
Completed Request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
Completed Request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Offeror on the one hand
and the Underwriters on the other hand from the offering of the Trust
Preferred Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Offerors on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Offerors on the one hand
and the Underwriters on the other hand in connection with the offering
of the Trust Preferred Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net
proceeds from the offering of the Trust Preferred Securities pursuant to
this Agreement (before deducting expenses but after deducting the total
underwriting commission received by the Underwriters) received by the
Offerors and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the Term Sheet,
bear to the aggregate initial public offering price of the Trust
Preferred Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether any such 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 Offerors or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Trust Preferred Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of any such 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 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, the General
Partner of the Partnership, the Issuer Trustees of the Trust, each
officer of the Offerors who signed the Registration Statement, and each
person, if any, who controls any of the Offerors within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the
same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are
several in proportion to the principal amount of Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Offerors or any of
its Subsidiaries submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or controlling person, or by or on behalf of
the Offerors, and shall survive delivery of the Trust Preferred
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given
in the Prospectus any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the Trust
Preferred Securities or to enforce contracts for the sale of the Trust
Preferred Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or
the New York Stock Exchange or if trading generally on the New York
Stock Exchange has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices
have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York State
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further
that Sections 1, 6, 7 and 8 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Trust
Preferred Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in
such amounts as may be agreed upon and upon the terms herein set forth;
if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the aggregate number of the Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate number of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company
shall have the right to postpone Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As
used herein, the term "Underwriter" includes any person substituted for
an Underwriter under this Section 10.
SECTION 11. Notices. 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.
Notices to the Underwriters shall be directed to the Representatives at
North Tower, World Financial Center, New York, New York 10281-1201,
attention of Office of Legal Compliance; and notice to the Offerors
shall be directed to it at 9830 Colonnade Boulevard, San Antonio, Texas
78230, attention of the Executive Vice President, General Counsel, and
Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation,
other than the Underwriters and the Offerors and their respective
successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the Underwriters and the Offerors
and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser
of Trust Preferred Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SM "Trust Originated Preferred Securities" and TOPrS" are service marks
of Merrill Lynch & Co., Inc.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart
hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters and the Offerors in
accordance with its terms.
Very truly yours,
ULTRAMAR DIAMOND SHAMROCK
CORPORATION
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
UDS FUNDING I, L.P.
By: ULTRAMAR DIAMOND SHAMROCK
CORPORATION
as General Partner
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
UDS CAPITAL I
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ MARK DEVITO
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Trust Preferred
Name of Underwriter Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated. . . . . . 1,155,000
Lehman Brothers Inc.. . . . . . . . . . . . . . . . . . . . . 1,145,000
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . 1,145,000
PaineWebber Incorporated. . . . . . . . . . . . . . . . . . . 1,145,000
Prudential Securities Inc.. . . . . . . . . . . . . . . . . . 1,145,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . 1,145,000
Bear, Stearns & Co. Inc.. . . . . . . . . . . . . . . . . . . 80,000
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . 80,000
Cowen & Company . . . . . . . . . . . . . . . . . . . . . . . 80,000
Dain Bosworth Incorporated. . . . . . . . . . . . . . . . . . 80,000
Dillon, Read & Co. Inc. . . . . . . . . . . . . . . . . . . . 80,000
Donaldson, Lufkin & Jenrette Securities Corporation . . . . . 80,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . 80,000
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . . . . 80,000
The Ohio Company. . . . . . . . . . . . . . . . . . . . . . . 80,000
Oppenheimer & Co., Inc. . . . . . . . . . . . . . . . . . . . 80,000
Piper Jaffray Inc.. . . . . . . . . . . . . . . . . . . . . . 80,000
Raymond James & Associates, Inc.. . . . . . . . . . . . . . . 80,000
Tucker Anthony Incorporated . . . . . . . . . . . . . . . . . 80,000
Wheat, First Securities, Inc. . . . . . . . . . . . . . . . . 80,000
Total . . . . . . . . . . . . . . . . . . . . . . . 8,000,000
<PAGE/>
<PAGE>
SCHEDULE B
1. The initial public offering price per security for the Trust
Preferred Securities, determined as provided in said Section 2, shall be
$25.00.
2. The purchase price per security for the Trust Preferred
Securities to be paid by the several Underwriters shall be $25.00, being
an amount equal to the initial public offering price set forth above.
3. The compensation per Trust Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be $.7875; provided, however, that the compensation per
Trust Preferred Security for sales of 10,000 or more Trust Preferred
Securities to a single purchaser shall be $.50. Merrill Lynch on behalf
of the Underwriters will advise the Company by the close of business on
the business day prior to the Closing Time of the number of sales of
10,000 or more Trust Preferred Securities to a single purchaser.
<PAGE/>
<PAGE>
EXHIBIT A
FORM OF OPINION OF PATRICK J. GUARINO
COMPANY COUNSEL, TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Diamond Shamrock Corporation (the "Company") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, has the requisite corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under the Purchase Agreement, and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(ii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(iii) Each Indenture has been duly authorized, executed, and
delivered by the applicable Investment Affiliate and, in the case of the
Subsidiary Debentures, the Debenture Guarantor. The Indenture in
respect of the Company Debentures has been duly qualified under the 1939
Act.
(iv) The Debentures have been duly authorized, executed and
delivered by the applicable Investment Affiliate.
(v) The Investment Guarantees in respect of each of the Subsidiary
Debentures have been duly authorized, executed and issued by the
Debenture Guarantor. The Investment Guarantees have been duly qualified
under the 1939 Act.
(vi) The Trust Preferred Securities Guarantee Agreement has been
duly authorized, executed and delivered by the Company. The Trust
Preferred Securities Guarantee Agreement has been duly qualified under
the 1939 Act.
(vii) The Partnership Guarantee Agreement has been duly
authorized, executed and delivered by the Company.
(viii) The Declaration has been duly authorized, executed and
delivered by the Company and has been duly qualified under the 1939 Act.
(ix) The Partnership Agreement has been duly authorized, executed
and delivered by the Company.
(x) No consent, approval, authorization, order, registration or
qualification of or with any Federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to my knowledge, any Federal or New
York court or any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale by the Offerors of
the Offered Securities, the issuance by the Investment Affiliates of the
Debentures, the issuance of the Investment Guarantees, the Partnership
Guarantee and the Trust Guarantee by the Company and the compliance by
the Offerors with all of the provisions of the Purchase Agreement,
except for (a) the registration under the 1933 Act and the 1934 Act of
the Offered Securities, (b) such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Trust Preferred Securities and the Trust Preferred
Securities Guarantee by the Underwriters and (c) such consents,
approvals, authorizations, registrations or qualifications as have
already been obtained or made.
(xi) The statements made in the Prospectus under the captions "UDS
Capital I", "UDS Funding I, L.P.", "Description of Trust Preferred
Securities", "Description of Trust Guarantee", "Description of
Partnership Preferred Securities", and "Description of the Partnership
Guarantee", insofar as such statements purport to constitute summaries
of the terms of the Offered Securities, constitute accurate summaries of
the terms of the Offered Securities.
(xii) The Registration Statement has been declared effective under
the 1933 Act. Any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required
by Rule 424(b); and to the best of my knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
initiated or are pending or threatened by the Commission.
(xiii) Neither the Trust nor the Partnership is required to be
registered as an "investment company" under the 1940 Act.
(xiv) Each of the Company and the Investment Subsidiaries is not,
and after giving effect to the offering and sale of the Trust Preferred
Securities and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" as such
term is defined in the 1940 Act.
I have participated in conferences with officers and
representatives of the Company at which the contents of the Registration
Statement and Prospectus and related matters were discussed and,
although I am not passing upon or assuming responsibility for the
accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and Prospectus
and have made no independent check or verification thereof, on the basis
of the foregoing, nothing has come to my attention that would lead me to
believe that the Registration Statement or any post-effective amendment
thereto (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and the Form T-1s, as to which I make no statement), at the
time the Registration Statement or any post-effective amendment thereto
became effective or at the date of the applicable Terms Agreement,
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 or that the Prospectus or any
amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated therein or
omitted therefrom, as to which I make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits 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.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper,
on certificates of responsible officers of the Company and public
officials. In addition, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the
United States and the General Corporation Law of the State of Delaware,
upon the opinions of counsel satisfactory to the Representatives.
<PAGE/>
<PAGE>
EXHIBIT B
FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP,
SPECIAL DELAWARE COUNSEL AND SPECIAL TAX COUNSEL TO THE COMPANY,
THE TRUST AND THE PARTNERSHIP, TO BE DELIVERED
PURSUANT TO SECTION 5(b).
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Trust Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter into
and perform its obligations under each of the Purchase Agreement, the
Trust Preferred Securities, the Trust Common Securities and the
Declaration; the Trust is duly qualified to transact business as a
foreign company and is in good standing in any other jurisdiction in
which such qualification and good standing is necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Trust; the Trust is not a party to
or otherwise bound by any agreement other than those described in the
Prospectus.
(ii) The Trust Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the
Declaration) fully paid undivided beneficial interests in the assets of
the Trust and will conform to all statements relating thereto contained
in the Prospectus; the issuance of the Trust Common Securities is not
subject to preemptive or other similar rights.
(iii) The Trust Preferred Securities have been duly authorized by
the Declaration and, when issued and delivered against payment of the
consideration as set forth in the Purchase Agreement, will be validly
issued and (subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the Trust, will be
entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; under the
Declaration or Delaware law the Trust Preferred Securities are not
subject to preemptive or other similar rights; and holders of Trust
Preferred Securities will be entitled to the same limitation of personal
liability under Delaware law as extended to stockholders of private
corporations for profit.
(iv) The Partnership has been duly created and is validly existing
in good standing as a limited partnership under the Delaware Partnership
Act with the power and authority to own property and to conduct its
business as described in the Registration Statement and Prospectus and
to enter into and perform its obligations under each of the Purchase
Agreement, the Partnership Preferred Securities and the Partnership
Agreement; the Partnership is duly qualified to transact business as a
foreign company and is in good standing in any other jurisdiction in
which such qualification is necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Partnership; the Partnership is not a party to or
otherwise bound by any agreement other than those described in the
Prospectus.
(v) The Partnership Preferred Securities have been duly authorized
and, when issued and delivered pursuant to the Partnership Agreement
against payment of the consideration set forth therein, will represent
valid partnership interests in the Partnership will be entitled to the
benefits of the Partnership Agreement and will conform to the
description thereof in the Prospectus; the issuance of the Partnership
Preferred Securities is not subject to preemptive or other similar
rights; assuming that the holders of Partnership Preferred Securities in
their capacities as such do not participate in the control of the
business of the Partnership, the holders of the Partnership Preferred
Securities, in their capacities as such, will have no liability to third
parties in excess of their obligations to make payments provided for in
the Limited Partnership Agreement; there are no provisions in the
Partnership Agreement which would permit the holders of Partnership
Preferred Securities in their capacities as such to participate in the
control of the business of the Partnership.
(vi) Assuming the Declaration has been duly authorized by the
Company, the Declaration has been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Institutional Trustee, the
Declaration constitutes a valid and binding obligation of the Company
and the Regular Trustees, enforceable against the Company and the
Regular Trustees in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions and
conforms to all statements relating thereto in the Prospectus.
(vii) Assuming the Partnership Agreement has been duly authorized
by the Company, the Partnership Agreement has been duly executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions and conforms to the description
thereof in the Prospectus.
(viii) Assuming each Indenture has been duly authorized by the
Company, each Indenture, when duly authorized, executed and delivered by
the Debt Trustee, will constitute a valid and legally binding obligation
of such Investment Affiliate and, in the case of the Subsidiary
Debentures, the Debenture Guarantor, enforceable against such Investment
Affiliate and, in the case of the Subsidiary Debentures, the Debenture
Guarantor, in accordance with its terms, except as the enforcement
thereof may be limited by the Bankruptcy Exceptions.
(ix) Assuming the Debentures have been duly authorized by the
Applicable Investment Affiliate, the Debentures, when duly authenticated
by the Debt Trustee and upon payment and delivery as described in the
Purchase Agreement, will constitute valid and legally binding
obligations of such Investment Affiliate enforceable against such
Investment Affiliate in accordance with their terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions.
(x) Assuming the Investment Guarantees in respect of each of the
Subsidiary Debentures have been duly authorized by the Debenture
Guarantor, such Investment Guarantees, when duly authorized, executed
and delivered by the Debt Trustee, and upon payment and delivery as
described in the Purchase Agreement, will constitute valid and legally
binding obligations of the Debenture Guarantor enforceable against the
Debenture Guarantor in accordance with their terms except as the
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xi) Assuming the Trust Preferred Securities Guarantee Agreement
has been duly authorized by the Company, the Trust Preferred Securities
Guarantee Agreement, when duly authorized, executed and delivered by the
Guarantee Trustee, will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms except as the enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xii) Assuming the Partnership Guarantee Agreement has been duly
authorized by the Company, the Partnership Guarantee Agreement
constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
the enforcement thereof may be limited by the Bankruptcy Exceptions.
(xiii) The execution, delivery and performance of the Transaction
Documents by the Offerors and the consummation of the transactions
contemplated herein and therein and compliance by the Offerors with
their respective obligations do not and will not result in any violation
of the Declaration or Certificate of Trust or the Partnership Agreement
or the Certificate of Partnership and do not and will not conflict with,
or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust
or the Partnership under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument in each case
governed by Delaware law to which the Trust or the Partnership is a
party or by which they may be bound or to which any of their properties
may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse
effect on the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
Subsidiaries taken as a whole) or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any Delaware government,
governmental instrumentality or court, domestic or foreign, or any
Delaware regulatory body or administrative agency or other governmental
body having jurisdiction over the Offerors of their respective
properties.
(xiv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Delaware
court or Delaware governmental authority or agency (other than as may be
required under the securities or blue sky laws of the state of Delaware,
as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the
Purchase Agreement or the due execution, delivery or performance of the
Transaction Documents by the Offerors or for the offering, issuance,
sale or delivery of the Offered Securities.
<PAGE/>
<PAGE>
EXHIBIT C
FORM OF OPINION OF EMMET, MARVIN & MARTIN,
COUNSEL FOR THE PROPERTY TRUSTEE, TO BE
DELIVERED PURSUANT TO SECTION 5(e)
(i) The Bank of New York is a New York banking corporation with
trust powers, is duly organized, is validly existing and is in good
standing under the laws of the State of New York with all necessary
power and authority to execute, deliver and to carry out and perform its
obligations under the terms of the Declaration and each of the Trust
Preferred Guarantees.
(ii) The Bank of New York (Delaware) is a Delaware [banking
corporation] with trust powers, is duly organized, is validly existing
and is in good standing under the laws of the State of Delaware with all
necessary power and authority to execute, deliver and to carry out and
perform its obligations under the terms of the Declaration.
(iii) The execution, delivery and performance by the Property
Trustee and the Delaware Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the Trust Preferred
Guarantee have been duly authorized by all necessary corporate action on
the part of the Institutional Trustee and the Delaware Trustee, in the
case of the Declaration, and the Guarantee Trustee, in the case of the
Trust Preferred Guarantee. The Declaration and the Trust Preferred
Guarantee have been duly executed and delivered by the Property Trustee
and the Delaware Trustee, in the case of the Declaration, and the
Guarantee Trustee, in the case of the Trust Preferred Guarantee, and
constitute the legal, valid and binding obligations of the Property
Trustee and the Delaware Trustee, in the case of the Declaration, and
the Guarantee Trustee, in the case of the Trust Preferred Guarantee,
enforceable against the Property Trustee and the Delaware Trustee, in
the case of the Declaration, and the Guarantee Trustee, in the case of
the Trust Preferred Guarantee, in accordance with their terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions.
(iv) The execution, delivery and performance of the Declaration
and the Trust Preferred Guarantee by the Property Trustee and the
Delaware Trustee, in the case of the Declaration, and the Guarantee
Trustee, in the case of the Trust Preferred Guarantee, do not conflict
with or constitute a breach of the Articles of Organization or Bylaws of
the Property Trustee or the Delaware Trustee, in the case of the
Declaration, or the Guarantee Trustee, in the case of the Trust
Preferred Guarantee.
(v) No consent, approval or authorization of, or registration with
or notice to, any New York, Delaware or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee or the Delaware Trustee of the Declaration or by the Guarantee
Trustee of the Trust Preferred Guarantee.
EXHIBIT 4.1
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
UDS CAPITAL I
Dated as of June 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Trust Securities
SECTION 2.3 Reports by the Property Trustee
SECTION 2.4 Periodic Reports to Property Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Trust Enforcement Events; Waiver
SECTION 2.7 Trust Enforcement Event; Notice
ARTICLE III
ORGANIZATION
SECTION 3.1 Name
SECTION 3.2 Office
SECTION 3.3 Purpose
SECTION 3.4 Authority
SECTION 3.5 Title to Property of the Trust
SECTION 3.6 Powers and Duties of the Regular Trustees
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees
SECTION 3.8 Powers and Duties of the Property Trustee
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee
SECTION 3.10 Certain Rights of Property Trustee
SECTION 3.11 Delaware Trustee
SECTION 3.12 Execution of Documents
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
Securities
SECTION 3.14 Duration of Trust
SECTION 3.15 Mergers
ARTICLE IV
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor
SECTION 4.2 Indemnification and Expenses of the Trustee
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Company's Purchase of Trust Common Securities
SECTION 5.2 Covenants of the Trust Common Securities Holder
ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees
SECTION 6.2 Delaware Trustee
SECTION 6.3 Property Trustee; Eligibility
SECTION 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally
SECTION 6.5 Regular Trustees
SECTION 6.6 Delaware Trustee
SECTION 6.7 Appointment, Removal and Resignation of Trustees
SECTION 6.8 Vacancies among Trustees
SECTION 6.9 Effect of Vacancies
SECTION 6.10 Meetings
SECTION 6.11 Delegation of Power
Section 6.12 Merger, Conversion, Consolidation or Succession to
Business
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Distributions
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
SECTION 8.1 Designation and General Provisions Regarding Trust
Securities
SECTION 8.2 Redemption of Trust Securities
SECTION 8.3 Redemption Procedures
SECTION 8.4 Voting Rights of Trust Preferred Securities
SECTION 8.5 Voting Rights of Trust Common Securities
SECTION 8.6 Paying Agent
SECTION 8.7 Listing
SECTION 8.8 Acceptance of Guarantee and Agreements, Limited Partner
ship Agreement.
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST
SECTION 9.1 Termination of Trust
SECTION 9.2 Liquidation Distribution Upon Termination and Dissolu
tion of the Trust
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfer of Trust Securities
SECTION 10.2 Transfer of Certificates
SECTION 10.3 Deemed Security Holders
SECTION 10.4 Book Entry Interests
SECTION 10.5 Notices to Clearing Agency
SECTION 10.6 Appointment of Successor Clearing Agency
SECTION 10.7 Definitive Trust Preferred Security Certificates
SECTION 10.8 Mutilated, Destroyed, Lost or Stolen Certificates
ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 11.1 Liability
SECTION 11.2 Exculpation
SECTION 11.3 Fiduciary Duty
SECTION 11.4 Indemnification
SECTION 11.5 Outside Businesses
ARTICLE XII
ACCOUNTING
SECTION 12.1 Fiscal Year
SECTION 12.2 Certain Accounting Matters
SECTION 12.3 Banking
SECTION 12.4 Withholding
ARTICLE XIII
AMENDMENTS AND MEETINGS
SECTION 13.1 Amendments
SECTION 13.2 Meetings of the Holders of Trust Securities;
Action by Written Consent
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 14.1 Representations and Warranties of Property
Trustee
SECTION 14.2 Representations and Warranties of Delaware
Trustee
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices
SECTION 15.2 Governing Law
SECTION 15.3 Intention of the Parties
SECTION 15.4 Headings
SECTION 15.5 Successors and Assigns
SECTION 15.6 Partial Enforceability
SECTION 15.7 Counterparts
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a). . . . . . . . . . . . . . . . . . . 6.3(a)
310(c). . . . . . . . . . . . . . . . . . . Inapplicable
311(c). . . . . . . . . . . . . . . . . . . Inapplicable
312(a). . . . . . . . . . . . . . . . . . . 2.2(a)
312(b). . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . 2.3
314(a). . . . . . . . . . . . . . . . . . . 2.4
314(b). . . . . . . . . . . . . . . . . . . Inapplicable
314(c). . . . . . . . . . . . . . . . . . . 2.5
314(d). . . . . . . . . . . . . . . . . . . Inapplicable
314(f). . . . . . . . . . . . . . . . . . . Inapplicable
315(a). . . . . . . . . . . . . . . . . . . 3.9(b)
315(c). . . . . . . . . . . . . . . . . . . 3.9(a)
315(d). . . . . . . . . . . . . . . . . . . 3.9(a)
316(a). . . . . . . . . . . . . . . . . . . Annex I
316(c). . . . . . . . . . . . . . . . . . . 3.6(e)
* This Cross-Reference Table does not constitute part of the Declara
tion and shall not affect the interpretation of any of its terms or
provisions.
<PAGE/>
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
UDS CAPITAL I
June 25, 1997
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") dated
and effective as of June 25, 1997, by the Trustees (as defined herein),
by the Sponsor (as defined herein) and by the Holders, from time to
time, of undivided beneficial interests in the Trust to be issued
pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established UDS
CAPITAL I (the "Business Trust"), a trust under the Delaware Business
Trust Act (the "Trust Act"), pursuant to a Declaration of Trust dated as
of June 5, 1997 (the "Original Declaration") and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on June 5,
1997, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust
and investing the proceeds thereof in the Partnership Preferred Securi-
ties;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the benefit of the Holders, from time to
time, of the securities representing undivided beneficial ownership
interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE 1.
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned
to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from
time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of
and Annexes and Exhibits to this Declaration unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in
this Declaration or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) a term used in this Agreement and not otherwise defined
herein shall have the meaning ascribed to such term in the Partner
ship 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.
"Affiliate Investment Instruments" has the meaning set forth
in Section 7.1 of the Limited Partnership Agreement.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as set forth in Section
10.4 of this Declaration.
"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.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 et seq., as it may be amended
from time to time, or any successor legislation.
"Certificate" means a Trust Common Security Certificate or a
Trust Preferred Security Certificate.
"Change in 1940 Act Law" means, as a result of the occurrence
on or after the date of the issuance of the Trust Preferred Securities
of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, the Trust is or will be
considered an "investment company" which is required to be registered under
the 1940 Act.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as depositary for the Trust Preferred Securities and in whose
name or in the name of a nominee of that organization shall be registered
a Global Certificate and which shall undertake to effect book
entry transfers and pledges of beneficial interests in the Trust Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
the Clearing Agency effects book entry transfers and pledges of interest
in securities deposited with the Clearing Agency.
"Closing Date" means June 25, 1997.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission.
"Common Security Holder of the Trust" means the Company in its
capacity as Holder of the Trust Common Security.
"Company" means Ultramar Diamond Shamrock Corporation.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any officer, director, shareholder, member,
partner, employee, representative or agent of the Trust or its Affiliates.
"Compounded Distributions" has the meaning set forth in
Section 7.1(a) of this Declaration.
"Corporate Trust Office" means the principal corporate trust
office of the Property Trustee in the Borough of Manhattan, the City of
New York, which office at the date hereof is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Trust
Securities.
"Definitive Trust Preferred Security Certificates" has the
meaning set forth in Section 10.4 of this Declaration.
"Delaware Trustee" has the meaning set forth in Section 6.2 of
this Declaration.
"Distribution" has the meaning set forth in Section 7.1(a) of
this Declaration.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 11.4(b) of this Declaration.
"Fiscal Period" has the meaning set forth in Section 1.1 of
the Limited Partnership Agreement.
"Fiscal Year" has the meaning set forth in Section 12.1 of
this Declaration.
"General Partner" means Ultramar Diamond Shamrock Corporation,
in its capacity as the general partner of the Partnership, its permitted
successors, or any successor general partner in the Partnership admitted
as such pursuant to the Limited Partnership Agreement.
"Global Certificate" has the meaning set forth in Section 10.4
of this Declaration.
"Holder" means a Person in whose name a Certificate representing
a Trust Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Initial Debentures" has the meaning set forth in Section
7.1(b) of the Limited Partnership Agreement.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that (i) is controlled by the Company and (ii)
is not an investment company by reason of Section 3(a) or 3(b) of the
1940 Act or is otherwise an eligible recipient of funds directly or
indirectly from the Trust pursuant to an order issued by the Securities
and Exchange Commission.
"Investment Company" means an investment company as defined in
the 1940 Act.
"Investment Guarantee" means any guarantee on a subordinated
basis by the Company with respect to (1) payment of interest, principal
and other payment terms of Affiliate Investment Instruments that are
debt securities of an Investment Affiliate and (2) the payment of
dividends, distributions and other payment terms of Affiliate Investment
Instruments that are preferred or preference stock of an Investment
Affiliate when, as and if declared by such Investment Affiliate.
"Legal Action" has the meaning set forth in Section 3.6(h) of
this Declaration.
"Limited Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of UDS Funding I, L.P. dated as of June
25, 1997.
"List of Holders" has the meaning set forth in Section 2.2(a)
of this Declaration.
"Majority in liquidation amount of the Trust Securities"
means, except as provided in the terms of the Trust Preferred Securities
or by the Trust Indenture Act, Holder(s) of outstanding Trust Securities
voting together as a single class or, as the context may require,
Holders of outstanding Trust Preferred Securities or Holders of outstanding
Trust Common Securities voting separately as a class, who are
the record owners of more than 50% of the aggregate liquidation amount
of all outstanding Trust Securities of the relevant class.
"Ministerial Action" means, a ministerial action (such as
filing a form or making an election or pursuing some other similar
reasonable measure) which in the sole judgment of the Company has or
will cause no adverse effect on the Trust, the Partnership, the Company
or the holders of the Trust Securities and will involve no material
cost.
"Nasdaq" means the National Association of Securities Dealers
Automated Quotation System.
"1940 Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who
is not an individual), 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 Declaration shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examina
tion or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examina
tion 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., a Delaware limited
partnership.
"Partnership Enforcement Event" has the meaning set forth in
Section 6.2(h)(i) of the Limited Partnership Agreement.
"Partnership Guarantee" means the Partnership Guarantee Agree-
ment dated as of June 25, 1997, by the Company in favor of the Partnership
Preferred Security Holders with respect to the Partnership Preferred
Securities, as amended or supplemented from time to time.
"Partnership Preferred Securities" has the meaning set forth
in Section 1.1 of the Limited Partnership Agreement.
"Partnership Special Event" has the meaning set forth in
Section 1.1 of the Limited Partnership Agreement.
"Payment Amount" has the meaning set forth in Section 7.1(a)
of this Declaration.
"Paying Agent" has the meaning set forth in Section 3.8(g) of
this Declaration.
"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 thereof,
or
any other entity of whatever nature.
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant,
or each case in accordance with the rules of such Clearing
Agency).
"Property Account" has the meaning set forth in Section 3.8(c)
of this Declaration.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3 of this Declaration.
"Pro Rata" means, in reference to any distributions on or
redemptions of Trust Securities or the distribution of Partnership
Preferred Securities or any other payment with respect to Trust Securi-
ties in connection with a Trust Special Event or liquidation of the
Trust, pro rata to each Holder of Trust Securities according to the
aggregate liquidation amount of the Trust Securities held by the relevant
Holder in relation to the aggregate liquidation amount of all Trust
Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 8.2(a)
of this Declaration.
"Regular Trustee" has the meaning set forth in Section 6.1 of
this Declaration.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any Person that
owns, directly or indirectly, 100% of the outstanding voting securities
of the Sponsor.
"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.
"Rule 3a-5" means Rule 3a-5 under the 1940 Act.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Special Representative" has the meaning set forth in Section
6.2(h)(i) of the Limited Partnership Agreement.
"Sponsor" means the Company or any successor entity in a
merger, consolidation or amalgamation, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 6.7(b) of this Declaration.
"Successor Entity" has the meaning set forth in Section 3.15
of this Declaration.
"Successor Property Trustee" has the meaning set forth in
Section 6.7(b) of this Declaration.
"Successor Trust Securities" has the meaning set forth in
Section 3.15 of this Declaration.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii) of this Declaration.
"Tax Action" means (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof
or therein, (b) a judicial decision interpreting, applying or clarifying
such laws or regulations, (c) an administrative pronouncement or action
that represents an official position (including a clarification of an
official position) of the governmental authority or regulatory body
making such administrative pronouncement or taking such action, or (d) a
threatened challenge asserted in connection with an audit of the Company
or any of its subsidiaries, the Partnership, or the Trust, or a threatened
challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially
similar to the Debentures, the Partnership Preferred Securities, or the
Trust Preferred Securities, which amendment or change is adopted or
which decision, pronouncement or proposed change is announced or which
action, clarification or challenge occurs on or after the date of the
prospectus related to the issuance of the Trust Preferred Securities.
"10% in liquidation amount of the Trust Securities" means,
except as provided in the terms of the Trust Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities
voting together as a single class or, as the context may require,
Holders of outstanding Trust Preferred Securities or Holders of outstanding
Trust Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount of
all outstanding Trust Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code
by the United States Treasury Department, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Trust Common Security" has the meaning set forth in Section
8.1 of this Declaration.
"Trust Common Security Certificate" means a definitive
certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.
"Trust Common Securities Guarantee" means the Trust Common
Securities Guarantee Agreement dated as of June 25, 1997, entered
into by the Company, as Guarantor, for the benefit of the holders of the
Trust Common Securities.
"Trust Dissolution Tax Opinion" means an opinion of independent
tax counsel experienced in such matters to the effect that there has
been a Trust Tax Event.
"Trust Enforcement Event" means the occurrence, at any time,
of (i) arrearages on distributions on the Trust Preferred Securities
that shall exist for six consecutive quarterly distribution periods,
(ii) a default by the Company in respect of any of its obligations under
the Trust Guarantee or (iii) a Partnership Enforcement Event (as defined
in the Limited Partnership Agreement).
"Trust Guarantees" means the Trust Common Securities Guarantee
and The Trust Preferred Securities Guarantee, collectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trust Investment Company Event" means that the Company shall
have requested and received and shall have delivered to the Regular
Trustees an opinion of nationally recognized independent legal counsel
experienced in such matters to the effect that as a result of a Change
in 1940 Act Law, the Trust is or will be considered an "investment
company" which is required to be registered under the 1940 Act.
"Trust Liquidation" has the meaning set forth in Section
9.2(a) of this Declaration.
"Trust Preferred Securities Guarantee" has the meaning set
forth in Section 1.1 of the Limited Partnership Agreement.
"Trust Liquidation Distribution" has the meaning set forth in
Section 9.2(a) of this Declaration.
"Trust Preferred Security" has the meaning set forth in
Section 8.1(a) of this Declaration.
"Trust Preferred Security Beneficial Owner" means, with
respect to a Book Entry Interest, a Person who is the beneficial owner
of such Book Entry Interest, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit
A-1.
"Trust Redemption Tax Opinion" means an opinion of independent
tax counsel experienced in such matters that there has been a Trust Tax
Event, and following such Trust Tax Event there is more than an
insubstantial risk that interest payable by one or more of the Investment
Affiliates with respect to the Debentures is not, or will not be,
deductible by such Investment Affiliate for United States federal income
tax purposes even if the Partnership Preferred Securities were distributed
to the Holders of the Trust Securities in liquidation of such
Holders' interests in the Trust.
"Trust Securities" means the Trust Common Securities and the
Trust Preferred Securities.
"Trust Special Event" means a Trust Tax Event or a Trust
Investment Company Event.
"Trust Tax Event" means that there has been a Tax Action which
relates to any of the items described in (i) through (iii) below, and
that there is more than an insubstantial risk that (i) the Trust is, or
will be subject to United States federal income tax with respect to
income accrued or received on the Partnership Preferred Securities, (ii)
the Trust is, or will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest
payable by one or more of the Investment Affiliates with respect to the
Debentures is not, or will not be, deductible by such Investment Affiliate
for United States federal income tax purposes.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who
may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein
to a Trustee or the Trustees shall refer to such Person or Persons
solely in their capacity as trustees hereunder.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust Securities as
equity securities representing undivided beneficial interests in the
assets of the Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses
of the Holders of the Trust Securities ("List of Holders") as of such
record date, provided, that neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Property Trustee by the Sponsor and
the Regular Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders
is given to the Property Trustee. The Property Trustee shall preserve,
in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the
capacity as Paying Agent (if acting in such capacity), provided, that
the Property Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year commencing May 15,
1998, the Property 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 Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 of the Trust Indenture Act
(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 required
by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent provided for in this Declaration 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 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in liquidation amount of Trust
Preferred Securities may, by vote, on behalf of the Holders of all of
the Trust Preferred Securities, waive any past Trust Enforcement Event
in respect of the Trust Preferred Securities and its consequences,
provided, that if the underlying event of default or Partnership
Enforcement Event:
(i) is not waivable under the Trust Preferred Securities
Guarantee or the Limited Partnership Agreement, the Trust Enforce
ment Event under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater
than a Majority in liquidation amount of the Trust Preferred
Securities to be waived under the Trust Preferred Securities
Guarantee or the Partnership Preferred Securities to be waived
under the Limited Partnership Agreement (a "Super Majority"),
the Trust Enforcement Event under this Declaration may only be waived by
the vote of the Holders of at least the relevant Super Majority in
liquidation amount of the Trust Preferred Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded
from this Declaration and the Trust Securities, as permitted by the
Trust Indenture Act. Upon such waiver, any such default shall cease to
exist, and any Trust Enforcement Event with respect to the Trust Preferred
Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or Trust Enforcement Event with
respect to the Trust Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Trust Preferred Securities of
Trust Enforcement Events with respect to the Trust Preferred Securities
shall also be deemed to constitute a waiver by the Holders of the Trust
Common Securities of any such Trust Enforcement Event with respect to
the Trust Common Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the Trust Common
Securities.
(b) The Holders of a Majority in liquidation amount of the
Trust Common Securities may, by vote, on behalf of the Holders of all of
the Trust Common Securities, waive any past Trust Enforcement Event with
respect to the Trust Common Securities and its consequences, provided,
that if the underlying event of default or Partnership Enforcement
Event:
(i) is not waivable under the Trust Common Securities Guaran
tee or the Limited Partnership Agreement, except where the Holders
of the Trust Common Securities are deemed to have waived such Trust
Enforcement Event under this Declaration as provided below in this
Section 2.6(b), the Trust Enforcement Event under this Declaration
shall also not be waivable; or
(ii) requires the consent or vote of the Holders of a Super
Majority to be waived, except where the Holders of the Trust Common
Securities are deemed to have waived such Trust Enforcement Event
under the Declaration as provided below in this Section 2.6(b), the
Trust Enforcement Event under this Declaration may only be waived
by the vote of the Holders of at least the relevant Super Majority
in liquidation amount of the Trust Common Securities;
provided, further, each Holder of Trust Common Securities will be deemed
to have waived any such Trust Enforcement Event and all Trust Enforcement
Events with respect to the Trust Common Securities and its consequences if
all Trust Enforcement Events with respect to the Trust
Preferred Securities have been cured, waived or otherwise eliminated,
and until such Trust Enforcement Events have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Trust Preferred Securities and
only the Holders of the Trust Preferred Securities will have the right
to direct the Property Trustee in accordance with the terms of the Trust
Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture
Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture
Act are hereby expressly excluded from this Declaration and the
Trust Securities, as permitted by the Trust Indenture Act. Subject to
the foregoing provisions of this Section 2.6(b), upon such waiver, any
such default shall cease to exist and any Trust Enforcement Event with
respect to the Trust Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Trust Enforce-
ment Event with respect to the Trust Common Securities or impair any
right consequent thereon.
(c) A waiver of Partnership Enforcement Events under the
Limited Partnership Agreement by the Property Trustee at the direction
of the Holders of the Trust Preferred Securities constitutes a waiver of
the corresponding Trust Enforcement Event under this Declaration. The
foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Trust Securities, as permitted by
the Trust Indenture Act.
SECTION 2.7 Trust Enforcement Event; Notice.
The Property Trustee shall, within 90 days after the occurrence
of a Trust Enforcement Event, transmit by mail, first class
postage prepaid, to the Holders of the Trust Securities, notices of all
defaults with respect to the Trust Securities actually known to a
Responsible Officer of the Property Trustee, unless such defaults have
been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 2.7 being hereby defined to be defaults as
defined in the Trust Guarantees or the Limited Partnership Agreement,
not including any periods of grace provided for therein and irrespective
of the giving of any notice provided therein); provided, that except for
a default in the payment of principal of (or premium, if any) or interest
on any of the Affiliate Investment Instruments or in the payment of
any sinking fund installment established for the Affiliate Investment
Instruments, the Property Trustee shall be fully protected in withhold-
ing such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of the Trust Securities.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "UDS Capital I," as such name may be modi-
fied from time to time by the Regular Trustees following written notice
to the Holders of Trust Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable
by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Ultramar Diamond Shamrock Corporation, 9830 Colonnade Boulevard, San
Antonio, Texas 78230. On ten Business Days written notice to the
Holders of Trust Securities, the Regular Trustees may designate another
principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue the Trust Securities, (b) investing the proceeds from such sale of
the Trust Securities to acquire the Partnership Preferred Securities,
and (c) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments,
mortgage or pledge any of its assets, or otherwise undertake (or permit
to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor
trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an
action taken by the Property Trustee on behalf of the Trust in accordance
with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Partnership
Preferred Securities and the Property Account or as otherwise
provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
ownership interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Trust Preferred Securities and the
Trust Common Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series
of Trust Preferred Securities and no more than one series of Trust
Common Securities, and, provided, further, that there shall be no
interests in the Trust other than the Trust Securities, and the
issuance of Trust Securities shall be limited to a one-time,
simultaneous issuance of both Trust Preferred Securities and Trust
Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Trust
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registra
tion statement on Form S-3 prepared by the Sponsor, including
any amendments thereto, pertaining to the Trust Preferred
Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Trust Preferred Securities in any State in which the Sponsor
has determined to qualify or register such Trust Preferred
Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other
national stock exchange or the Nasdaq National Market System
for listing upon notice of issuance of any Trust Preferred
Securities;
(iv) execute and file with the Commission a registration
statement, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Trust Preferred
Securities, the Partnership Preferred Securities, the Trust
Preferred Securities Guarantee and the Partnership Guarantee
under Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement
providing for the sale of the Trust Preferred Securities and
perform the duties and obligations of the Trust thereunder;
(c) to acquire the Partnership Preferred Securities with the
proceeds of the sale of the Trust Preferred Securities and the
Trust Common Securities; provided, however, that the Regular
Trustees shall cause legal title to the Partnership Preferred
Securities to be held of record in the name of the Property Trustee
for the benefit of the Holders of the Trust Preferred Securities
and the Holders of Trust Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Trust Special Event; pro
vided, that the Regular Trustees shall consult with the Sponsor and
the Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Trust Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c)
of the Trust Indenture Act, Distributions, voting rights, redemp
tions and exchanges, and to issue relevant notices to the Holders
of Trust Preferred Securities and Holders of Trust Common Securi
ties as to such actions and applicable record dates;
(f) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Partnership of the
General Partner's election not to make a current, quarterly distri
bution on the Partnership Preferred Securities under the Limited
Partnership Agreement;
(g) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Trust
Securities;
(h) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section
3.8(f), the Property Trustee has the exclusive power to bring such
Legal Action;
(i) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contrac
tors, advisors, and consultants and pay reasonable compensation for
such services;
(j) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(k) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate
may be executed by any Regular Trustee;
(l) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, registrar
and transfer agent for the Trust Securities;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory busi
ness trust under the laws of the State of Delaware and of each
other jurisdiction in which such existence is necessary to protect
the limited liability of the Holders of the Trust Preferred Securi
ties or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, or to take no action, not inconsis
tent with this Declaration or with applicable law, that the Regular
Trustees determine in their discretion to be necessary or desirable
in carrying out the activities of the Trust as set out in this
Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Invest
ment Company required to be registered under the 1940 Act; and
(ii) taking no action which would be reasonably likely
to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for
United States federal income tax purposes;
provided, that such action does not adversely affect the interests
of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed
with respect to the Trust to be duly prepared and filed by the
Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Regular Trustees
shall not take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Partnership pursuant to Section
9.1 of the Limited Partnership Agreement.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration. In particu-
lar, the Trust shall not and the Trustees (including the Property
Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Partnership Preferred Securities, but shall distribute all such
proceeds to Holders of Trust Securities pursuant to the terms of
this Declaration and of the Trust Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness or acquire any
securities other than the Partnership Preferred Securities;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Trust Securities in any
way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Trust Securities;
(vii) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting
any proceeding for any remedy available to the Special Representa
tive or exercising any trust or power conferred upon the Special
Representative with respect to the Partnership Preferred Securi
ties, the Affiliate Investment Instruments, and the Investment
Guarantees, (B) cause the Special Representative to waive any past
default that is waivable under the Limited Partnership Agreement,
the Affiliate Investment Instruments or the Investment Guarantees,
(C) cause the Special Representative to exercise any right to
rescind or annul any declaration that the principal of, or other
amounts in respect of, any Affiliate Investment Instrument is due
and payable or (D) consent to any amendment, modification or
termination of the Limited Partnership Agreement or the Partnership
Preferred Securities where such consent shall be required; and
(viii) other than in connection with the liquidation of the
Trust pursuant to a Trust Special Event or upon redemption of all
the Trust Securities, file a certificate of cancellation of the
Trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Partnership Preferred Securities
shall be owned by and held of record in the name of the Property Trustee
in trust for the benefit of the Holders of the Trust Securities. The
right, title and interest of the Property Trustee to the Partnership
Preferred Securities shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section
6.7. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Partnership Preferred
Securities have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Partnership Preferred Securities to the Regular
Trustees or to the Delaware Trustee (if the Property Trustee does not
also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders
of the Trust Securities and, upon the receipt of payments of funds
made in respect of the Partnership Preferred Securities held by the
Property Trustee, deposit such funds into the Property Account and
make payments to the Holders of the Trust Preferred Securities and
Holders of the Trust Common Securities from the Property Account in
accordance with Section 7.1. Funds in the Property Account shall
be held uninvested until disbursed in accordance with this Declara
tion. The Property Account shall be an account that is maintained
with a banking institution (including the Property Trustee if it
qualifies hereunder) authorized to exercise corporate trust powers
and having a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or state
authority;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust
Preferred Securities and the Trust Common Securities to the extent
the Partnership Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Trust Securi
ties, engage in such ministerial activities as shall be necessary
or appropriate to effect the distribution of the Partnership
Preferred Securities to Holders of Trust Securities upon the
occurrence of a Trust Special Event.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Trust Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with a Trust Enforcement Event of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a Holder of
Partnership Preferred Securities and, if a Trust Enforcement Event occurs
and is continuing, the Property Trustee shall, for the benefit of
Holders of the Trust Securities, enforce its rights as Holder of the
Partnership Preferred Securities subject to the rights of the Holders
pursuant to the terms of such Trust Securities.
(g) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Trust
Securities and any such Paying Agent shall comply with Section 317(b) of
the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property Trustee.
(h) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities
pursuant to the terms of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.7.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Property Trustee
shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing or waiver of all Trust Enforcement
Events that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the Property
Trustee. In case a Trust Enforcement Event has occurred (that has not
been cured or waived pursuant to Section 2.6) of which a Responsible
Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property 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 a Trust Enforcement Event and
after the curing or waiving of all such Trust Enforcement Events
that may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property 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 Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) subject to the requirement of the Property Trustee
receiving a tax opinion as set forth in Section 8.4(d) or 8.5(c),
as the case may be, the Property 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 not less
than a Majority in liquidation amount of the Trust Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Property 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 it
shall have reasonable grounds for believing that the repayment of
such funds or protection from such liability is not reasonably
assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against such risk
or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Partnership
Preferred Securities and the Property Account shall be to deal with
such property in a similar manner as the Property Trustee deals
with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property
Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency
of the Partnership Preferred Securities or the payment of any taxes
or assessments levied thereon or in connection therewith;
(vii) money held by the Property Trustee need not be segre
gated from other funds held by it except in relation to the Prop
erty Account maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property 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 Sponsor or the Regular
Trustees acting on behalf of the Trust contemplated by this Decla
ration shall be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereun
der, the Property Trustee (unless other evidence is herein specifi
cally 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
Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration
thereof;
(v) the Property Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such coun
sel and experts with respect to legal matters or advice within the
scope of such experts' area of expertise shall be full and complete
authorization 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
Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time
to seek instructions concerning the administration of this Declara
tion from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declara
tion at the request or direction of any Holder, unless (a) such
Holder shall have provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees 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 Property Trustee and (b) the Property Trustee has
obtained the legal opinions, if any, required by Section 8.4(d) or
8.5(c), as the case may be, of this Agreement; provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of a Trust
Enforcement Event, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(vii) the Property 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, debenture, note, other
evidence of indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and the
Property 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 Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Trust Securi-
ties, and the signature of the Property Trustee or its agents alone
shall be sufficient and effective to perform any such action and no
third party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions
from the Holders of the Trust Securities which instructions may
only be given by the Holders of the same proportion in liquidation
amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect
of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such in
structions are received, and (iii) shall be fully protected in
conclusively relying on or acting in or accordance with such
instructions; provided, however, that the Property Trustee shall
not be required to take any action unless it shall have obtained
such legal opinions, if any, required by Sections 8.4(d) or 8.5(c),
as the case may be, of this Agreement; and
(xi) except as otherwise expressly provided by this Declara
tion, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property 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 Property 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 Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any provision of this Declaration other than
Section 6.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described
in this Declaration. Except as set forth in Section 6.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular
Trustee is authorized to execute on behalf of the Trust any documents
that the Regular Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6; provided, that the registration
statement referred to in Section 3.6(b)(i), including any amendments
thereto, shall be signed by or on behalf of a majority of the
Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust Securi
ties.
The recitals contained in this Declaration and the Trust
Securities shall be taken as the statements of the Sponsor, and the
Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the value or condition of the
property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or
the Trust Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have perpetual existence.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except as described
in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Trust Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust orga-
nized as such under the laws of any State of the United States; provid-
ed, that:
(i) if the Trust is not the survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Trust Securities; or
(B) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust
Preferred Securities (the "Successor Trust Securities") so
long as the Successor Trust Securities rank the same as the
Trust Preferred Securities rank with respect to Distributions,
assets and payments upon liquidation, redemption and other
wise;
(ii) the Company expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Partnership Preferred Securi
ties;
(iii) the Successor Trust Securities are listed, or any
Successor Trust Securities will be listed upon notification of
issuance, on any national securities exchange or with another
organization on which the Trust Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Trust Preferred
Securities (including any Successor Trust Securities) to be down
graded by any nationally recognized statistical rating organiza
tion;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Preferred
Securities (including any Successor Trust Securities) in any
material respect;
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) the Company guarantees the obligations of such Succes
sor Entity under the Successor Trust Securities at least to the
extent provided by the Trust Guarantees; and
(viii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has re
ceived an opinion of independent counsel to the Trust experienced
in such matters to the effect that:
(A) such merger, consolidation, amalgamation, replace
ment, conveyance, transfer or lease will not adversely affect
the rights, preferences and privileges of the Holders of the
Trust Preferred Securities (including any Successor Trust
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust
nor the Successor Entity will be required to register as an
Investment Company under the 1940 Act;
(C) following such merger, consolidation, amalgamation
or replacement, the Trust (or the Successor Entity) will not
be classified as an association or a publicly traded partner
ship taxable as a corporation for United States federal income
tax purposes; and
(D) following such merger, consolidation, amalgamation
or replacement, the Partnership will not be classified as an
association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Trust Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust
or Successor Entity or the Partnership to be classified as an association
or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility
to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Trust Pre
ferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Trust
Preferred Securities and to do any and all such acts, other than
actions which must be taken by the Trust, and advise the Trust of
actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market System for listing upon notice of issuance
of any Trust Preferred Securities, Partnership Preferred Securi
ties, the Trust Preferred Securities Guarantee and the Partnership
Guarantee;
(d) to prepare for filing by the Trust with the Commission a
registration statement relating to the registration of the Trust
Preferred Securities, the Partnership Preferred Securities, the
Trust Preferred Securities Guarantee, and the Partnership Guarantee
under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of an underwriting agreement and
any pricing agreement providing for the sale of the Trust Preferred
Securities.
SECTION 4.2 Indemnification and Expenses of the Trustee
The Partnership agrees, and to the extent the Partnership
fails to do so, the Sponsor agrees to indemnify the Property Trustee and
the Delaware Trustee for, and to hold each of them harmless against, any
loss, liability or expense incurred without negligence or bad faith on
the part of the Property Trustee or the Delaware Trustee, as the case
may be, arising out of or in connection with the acceptance or adminis-
tration of the trust or trusts hereunder, including the costs and
expenses of defending either of them against any claim or liability in
connection with the exercise or performance of any of their respective
powers or duties hereunder; the provisions of this Section 4.2 shall
survive the resignation or removal of the Delaware Trustee or the Prop-
erty Trustee or the termination of this Declaration.
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Company's Purchase of Trust Common Securities.
On the Closing Date the Company will purchase all of the Trust
Common Securities issued by the Trust, for an amount at least equal to
3% of the capital of the Trust, at the same time as the Trust Preferred
Securities are sold.
SECTION 5.2 Covenants of the Trust Common Securities Holder.
For so long as the Trust Preferred Securities remain out-
standing, the Company will covenant (i) to maintain directly 100 percent
ownership of the Trust Common Securities, (ii) to cause the Trust to
remain a statutory business trust and not to voluntarily dissolve, wind
up, liquidate, or be terminated, except as permitted by this Declaration,
(iii) to use its commercially reasonable efforts to ensure that
the Trust will not be an investment company for purposes of the 1940
Act, and (iv) to take no action which would be reasonably likely to
cause the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income
tax purposes.
ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Trust Securities,
the Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in liquidation amount of the Trust Common Securities
voting as a class at a meeting of the Holders of the Trust Common
Securities; provided, however, that the number of Trustees shall in
no event be less than three (3); provided, further, that (1) if
required by the Business Trust Act, one Trustee is the Delaware
Trustee; (2) there shall be at least one Trustee who is an employee
or officer of, or is affiliated with the Company (each, a "Regular
Trustee"); and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture
under the Trust Indenture Act, and such Property Trustee may also
serve as Delaware Trustee if it meets the applicable requirements.
SECTION 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided, that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee may also be the Delaware
Trustee (in which case Section 3.11 shall have no application).
SECTION 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; 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 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, Territo
rial 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
6.3(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 Property Trustee shall cease to be
eligible to so act under Section 6.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 6.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Trust Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
(d) The Trust Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that
shall act through one or more Authorized Officers.
SECTION 6.5 Regular Trustees.
The initial Regular Trustees shall be:
H. Pete Smith
Steve Blank
Patti K. Meisetschleager
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to
any matter over which the Regular Trustees have power to act, any power
of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable
law, any Regular Trustee is authorized to execute on behalf of the Trust
any documents which the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by or on behalf of a majority of the
Regular Trustees.
SECTION 6.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 6.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.7(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities, by vote of
the Holders of a Majority in liquidation amount of the Trust Common
Securities voting as a class at a meeting of the Holders of the
Trust Common Securities.
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 6.7(a) until a successor Trustee
possessing the qualifications to act as Property Trustee under Section
6.3 (a "Successor Property Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and the Sponsor;
and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 6.2 and 6.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been ap
pointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders
of the Trust Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and deliv
ered to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Trust Common Securities shall use
their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Property Trustee, as the case may be, if the Property Trustee
or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 6.7 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation or removal, the retiring Property
Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 6.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the
number of Trustees is increased pursuant to Section 6.1, a vacancy shall
occur. A resolution certifying the existence of such vacancy by the
Regular Trustees or, if there are more than two, a majority of the
Regular Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with Section 6.7.
SECTION 6.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur, until such
vacancy is filled by the appointment of a Regular Trustee in accordance
with Section 6.7, the Regular Trustees in office, regardless of their
number, shall have all the powers granted to the Regular Trustees and
shall discharge all the duties imposed upon the Regular Trustees by this
Declaration.
SECTION 6.10 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any
Regular Trustee. Regular meetings of the Regular Trustees may be held
at a time and place fixed by resolution of the Regular Trustees. Notice
of any in-person meetings of the Regular Trustees shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 48 hours before such
meeting. Notice of any telephonic meetings of the Regular Trustees or
any committee thereof shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier)
not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting.
The presence (whether in person or by telephone) of a Regular Trustee at
a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to
such matter; provided, that a Quorum is present, or without a meeting by
the unanimous written consent of the Regular Trustees. Notwithstanding
the foregoing, any and all actions of the Regular Trustees may be taken
by the unanimous written consent of all Regular Trustees.
SECTION 6.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the
doing of such things and the execution of such instruments either in the
name of the Trust or the names of the Regular Trustees or otherwise as
the Regular Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Busi
ness.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business
of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the successor of the Property Trustee or the Delaware Trustee,
as the case may be, hereunder; provided, that such corporation shall be
otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Distributions.
(a) Holders of Trust Securities shall be entitled to receive
cumulative cash distributions at the rate per annum of
8.32% of the stated liquidation amount of $25 per Trust Security,
calculated on the basis of a 360-day year consisting of twelve 30-day
months. For any period shorter than a full 90-day quarter, distributions
will be computed on the basis of the actual number of days elapsed
in such 90-day quarter. Distributions shall be made on the Trust
Preferred Securities and the Trust Common Securities on a Pro Rata
basis. Distributions on the Trust Securities shall, from the date of
original issue, accumulate and be cumulative and shall be payable
quarterly only to the extent that the Trust has funds available for the
payment of such Distributions in the Property Account. Distributions
not paid on the scheduled payment date will accumulate and compound
quarterly at the rate of 8.32% per annum ("Compounded Distributions").
"Distributions" shall mean ordinary cumulative distributions in respect
of each Fiscal Period together with any Compounded Distributions. If
and to the extent that the Partnership makes a distribution on the Part-
nership Preferred Securities held by the Property Trustee or the Company
makes a payment under the Partnership Guarantee (the amount of any such
partnership distribution, including any compounded partnership
distributions, or guarantee payment being a "Payment Amount"), the Trust
shall and the Property Trustee is directed, to the extent funds are available
for that purpose, to make a Pro Rata Distribution of the Payment Amount
to Holders.
(b) Distributions on the Trust Securities will be cumulative,
will accumulate from the date of initial issuance and will be payable
quarterly in arrears on each March 31, June 30, September 30 and December
31, commencing June 30, 1997, when, as and if available for payment,
by the Property Trustee, except as otherwise described below. If
Distributions are not paid when scheduled, the accumulated Distributions
shall be paid to the Holders of record of Trust Securities as they
appear on the books and records of the Trust on the record date as
determined under Section 7.1(d) below.
(c) Amounts available to the Trust for distribution to the
Holders of the Trust Securities will be limited to payments received by
the Trust from the Partnership on the Partnership Preferred Securities
or from the Company on the Partnership Guarantees paid by the Company to
the Trust. If the Property Trustee, as the holder of the Partnership
Preferred Securities for the benefit of the Holders of the Trust
Securities, receives notice of any determination by the Partnership not to
pay distributions on such Partnership Preferred Securities, the Property
Trustee shall give notice of such determination to the Holders.
(d) Distributions on the Trust Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust
on the relevant record dates, which relevant record dates, as long as
the Trust Preferred Securities remain in book-entry only form, will be
one Business Day prior to the relevant payment dates. Such distributions
will be paid through the Property Trustee who will hold amounts
received in respect of the Partnership Preferred Securities in the
Property Account for the benefit of the Holders of the Trust Securities.
In the event that the Trust Preferred Securities do not remain in
book-entry only form, the relevant record dates shall be the 15th day of
the month of the relevant payment dates. In the event that any date on
which distributions are payable on the Trust Securities is not a Busi-
ness Day, payment of the distribution payable on such date will be made
on the next succeeding day which is a Business Day (without any interest
or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
SECTION 8.1 Designation and General Provisions Regarding Trust Securi
ties.
(a) The Regular Trustees shall on behalf of the Trust issue
one class of preferred securities representing undivided beneficial
ownership interests in the assets of the Trust and one class of common
securities representing undivided beneficial ownership interests in the
assets of the Trust as follows:
(i) Trust Preferred Securities. 8,000,000 Trust Preferred
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of two hundred million dollars
($200,000,000) and a liquidation amount with respect to the assets
of the Trust of $25 per preferred security, are hereby designated
for the purpose of identification only as 8.32% Trust Originated
Preferred Securities (SM 1) (the "Trust Preferred Securities").
The Trust Preferred Security Certificates evidencing the Trust Pre
ferred Securities shall be substantially in the form of Exhibit A-1
to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which
the Trust Preferred Securities are listed.
(ii) Trust Common Securities. 247,440 Trust Common Securi
ties of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of six million one hundred eighty-six
thousand dollars ($6,186,000) and a liquidation amount with respect
to the assets of the Trust of $25 per common security, are hereby
designated for the purposes of identification only as 8.32% Trust
Common Securities (the "Trust Common Securities" and, together with
the Trust Preferred Securities, the "Trust Securities"). The Trust
Common Security Certificates evidencing the Trust Common Securities
shall be substantially in the form of Exhibit A-2 to the Declara
tion, with such changes and additions thereto or deletions there
from as may be required by ordinary usage, custom or practice.
(b) Except as provided in Section 9.2(b) of this Declaration,
the Trust Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Trust Common Securities. The Trust shall
issue no securities or other interests in the assets of the Trust other
than the Trust Preferred Securities and the Trust Common Securities.
(c) Any Regular Trustee shall sign the Trust Securities for
the Trust by manual or facsimile signature. In case any Regular Trustee
of the Trust who shall have signed any of the Trust Securities shall
cease to be a Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Certificates had not ceased to be
such Regular Trustee; and any Certificate may be signed on behalf of the
Trust by such persons who, at the actual date of execution of such Trust
Security, shall be the Regular Trustees of the Trust, although at the
date of the execution and delivery of the Declaration any such person
was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock exchange on
which Trust Securities may be listed, or to conform to usage.
(SM 1) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co., Inc.
A Trust Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Property Trustee. Such
signature shall be conclusive evidence that the Trust Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Trust Securities
for original issue. The aggregate number of Trust Securities outstanding
at any time shall not exceed the number set forth in the Terms of
the Trust Securities.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Trust Securities. An
authenticating agent may authenticate Trust Preferred Securities whenever
the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Property
Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(d) The consideration received by the Trust for the issuance
of the Trust Securities shall constitute a contribution to the capital
of the Trust and shall not constitute a loan to the Trust.
(e) Upon issuance of the Trust Securities as provided in this
Declaration, the Trust Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable, subject to Section 11.1
with respect to the Trust Common Securities.
(f) Every Person, by virtue of having become a Holder or a
Trust Preferred Security Beneficial Owner in accordance with the terms
of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration.
SECTION 8.2 Redemption of Trust Securities.
(a) Upon a purchase of the Partnership Preferred Securities
by the Partnership upon redemption or otherwise, the proceeds from such
purchase shall be simultaneously applied Pro Rata to redeem Trust
Securities having an aggregate liquidation amount equal to the Partnership
Preferred Securities so purchased or redeemed at an amount equal to
$25 per Partnership Preferred Security plus an amount equal to accumulated
and unpaid Distributions, including any Compounded Distributions
thereon through the date of the redemption or such lesser amount as
shall be received by the Trust in respect of the Partnership Preferred
Securities so purchased or redeemed (the "Redemption Price"). Holders
will be given not less than 30 nor more than 60 days notice of such
redemption.
(b) If fewer than all the outstanding Trust Securities are to
be so redeemed, the Trust Common Securities and the Trust Preferred
Securities will be redeemed Pro Rata and the Trust Preferred Securities
to be redeemed will be redeemed as described in Section 8.3 below;
provided, that fewer than all of the outstanding Trust Preferred Securities
may not be redeemed unless all accumulated and unpaid Distributions
have been paid on all Trust Preferred Securities for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) If, at any time, a Trust Special Event shall occur and be
continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below,
within 90 days following the occurrence of such Trust Special Event
elect to either (i) dissolve the Trust upon not less than 30 nor more
than 60 days notice with the result that, after satisfaction of credi-
tors, if any, of the Trust, Partnership Preferred Securities would be
distributed on a Pro Rata basis to the Holders of the Trust Preferred
Securities and the Trust Common Securities in liquidation of such
Holders' interests in the Trust; provided, however, that if at the time
there is available to the Trust the opportunity to eliminate, within
such 90-day period, the Trust Special Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some
other similar reasonable measure which in the sole judgment of the
Sponsor has or will cause no adverse effect on the Trust, the Partnership,
the Sponsor or the Holders of the Trust Securities and will
involve no material cost, the Trust will pursue such measure in lieu of
dissolution or (ii) cause the Trust Preferred Securities to remain
outstanding; provided, that in the case of this clause (ii), the Sponsor
shall pay any and all expenses incurred by or payable by the Trust
attributable to the Trust Special Event. Furthermore, if in the case of
the occurrence of a Trust Tax Event, the Regular Trustees have received
a Trust Redemption Tax Opinion, then the General Partner shall have the
right, within 90 days following the occurrence of such Trust Tax Event,
to elect to cause the Partnership to redeem the Partnership Preferred
Securities in whole (but not in part) for cash upon not less than 30 nor
more than 60 days notice and promptly following such redemption, the
Trust Securities will be redeemed by the Trust at the Redemption Price.
(d) If the Partnership Preferred Securities are distributed
to the Holders of the Trust Preferred Securities, the Sponsor will use
its best efforts to cause the Partnership Preferred Securities to be
listed on the New York Stock Exchange or on such other national securities
exchange or similar organization as the Trust Preferred Securities
are then listed or quoted.
(e) On the date fixed for any distribution of Partnership
Preferred Securities, upon dissolution of the Trust, (i) the Trust
Preferred Securities and the Trust Common Securities will no longer be
deemed to be outstanding and (ii) certificates representing Trust
Securities will be deemed to represent the Partnership Preferred Securities
having a liquidation preference equal to the stated liquidation
amount of such Trust Securities until such certificates are presented to
the Sponsor or its agent for transfer or reissuance.
SECTION 8.3 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of
Partnership Preferred Securities in exchange for, the Trust Securities
(a "Redemption/Distribution Notice") will be given by the Trust by mail
to each Holder of Trust Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Partnership Preferred Securities. For pur-
poses of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 8.3, a
Redemption/ Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders
of Trust Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Trust Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be redeemed shall
be redeemed Pro Rata from each Holder of Trust Securities, provided,
that in respect of Preferred Securities registered in the name of and
held of record by DTC or its nominee (or any successor Clearing Agency
or its nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person
on whose behalf such nominee holds such securities) in accordance with
the procedures applied by such agency or nominee. In the event that the
Trust Securities do not remain in book-entry only form and fewer than
all of the outstanding Trust Securities are to be redeemed, the Trust
Securities shall be redeemed Pro Rata or pursuant to the rules of any
securities exchange on which the Trust Securities are listed.
(c) If Trust Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, which notice may only be issued
if the Partnership Preferred Securities are redeemed as set out in this
Section 8.3 (which notice will be irrevocable), then (A) while the Trust
Preferred Securities are in book-entry only form, by 12:00 noon, New
York City time, on the redemption date, the Property Trustee will depos-
it irrevocably with the DTC or its nominee (or successor Clearing Agency
or its nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Trust Preferred Securities and will give the DTC
irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Trust Preferred Securities, and (B) with respect to
Trust Preferred Securities issued in definitive form and Trust Common
Securities, the Property Trustee will pay the relevant Redemption Price
to the Holders of such Trust Securities by check mailed to the address
of the relevant Holder appearing on the books and records of the Trust
on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, if applicable, then immedi-
ately prior to the close of business on the date of such deposit, or on
the redemption date, as applicable, distributions will cease to accumulate
on the Trust Securities so called for redemption and all rights of
Holders of such Trust Securities will cease, except the right of the
Holders of such Trust Securities to receive the Redemption Price, but
without interest on such Redemption Price. If any date fixed for
redemption of Trust Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next suc-
ceeding day that is a Business Day (and without any interest or other
payment in respect of the amount payable subject to such delay) except
that, if such Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for re-
demption. If payment of the Redemption Price in respect of any Trust
Securities is improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to the relevant
Trust Guarantee, Distributions on such Trust Securities will continue to
accumulate at the then applicable rate from the original redemption date
to the actual date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calcu-
lating the Redemption Price. For these purposes, the applicable Redemption
Price shall not include Distributions which are being paid to
Holders who were Holders on a relevant record date. Upon satisfaction
of the foregoing conditions, then immediately prior to the close of
business on the date of such deposit or payment, all rights of Holders
of such Trust Preferred Securities so called for redemption will cease,
except the right of the Holders to have received the Redemption Price,
but without interest on such Redemption Price, and from and after the
date fixed for redemption, such Trust Preferred Securities will not
accumulate distributions or bear interest.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Trust Securi-
ties that have been called for redemption.
(d) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Company
or its subsidiaries may at any time and from time to time purchase
outstanding Trust Preferred Securities by tender, in the open market or
by private agreement.
SECTION 8.4 Voting Rights of Trust Preferred Securities.
(a) Except as provided under Sections 6.1(b) and this Article
VIII and as otherwise required by the Business Trust Act, the Trust
Indenture Act and other applicable law, the Holders of the Trust Pre-
ferred Securities will have no voting rights.
(b) Subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in Section
8.4(d) below, 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
Property Trustee, or direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to
direct the Property Trustee, as Holder of the Partnership Preferred
Securities, to (i) exercise the remedies available to it under the
Limited Partnership Agreement as a Holder of the Partnership Preferred
Securities, including the right to direct the Special Representative of
the Partnership as elected by the Holders of the Partnership Preferred
Securities in accordance with the Limited Partnership Agreement (A) to
enforce the Partnership's creditors rights and other rights with respect
to the Affiliate Investment Instruments and any Investment Guarantees,
(B) to enforce the rights of the Holders of the Partnership Preferred
Securities under the Partnership Guarantee, and (C) to enforce the
rights of the Holders of the Partnership Preferred Securities to receive
distributions (if and to the extent such distributions have been declared
out of funds legally available therefor by the General Partner in
its sole discretion) on the Partnership Preferred Securities or (ii)
consent to any amendment, modification, or termination of the Limited
Partnership Agreement or the Partnership Preferred Securities where such
consent shall be required; provided, however, that where a consent or
action under the Limited Partnership Agreement would require the consent
or act of the Holders of more than a majority of the aggregate liquidation
preference of Partnership Preferred Securities affected thereby,
only the Holders of the percentage of the aggregate stated liquidation
amount of the Trust Preferred Securities which is at least equal to the
percentage of aggregate liquidation preference required under the
Limited Partnership Agreement may direct the Property Trustee to give
such consent or take such action.
(c) If the Property Trustee fails to enforce its rights under
the Partnership Preferred Securities after a Holder of record of Trust
Preferred Securities has made a written request, such Holder of record
of Trust Preferred Securities may institute a legal proceeding directly
against the General Partner or the Special Representative, to enforce
the Property Trustee's rights under the Limited Partnership Agreement
without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing,
if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of an Investment Affiliate to make
any required payment when due on any Affiliate Investment Instrument,
then a Holder of Trust Preferred Securities may directly institute a
proceeding against such Investment Affiliate for enforcement of payment
with respect to such Affiliate Investment Instrument.
(d) The Property Trustee shall notify all Holders of the
Trust Preferred Securities of any notice of any Partnership Enforcement
Event received from the General Partner with respect to the Partnership
Preferred Securities and the Affiliate Investment Instruments. Such
notice shall state that such Partnership Enforcement Event also consti-
tutes a Trust Enforcement Event. Except with respect to directing the
time, method, and place of conducting a proceeding for a remedy, the
Property Trustee shall be under no obligation to take any of the actions
described in clause 8.4(b)(i) and (ii) above unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that as
a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes and that
after such action each Holder will continue to be treated as owning an
undivided beneficial ownership interest in the Partnership Preferred
Securities.
(e) In the event the consent of the Property Trustee, as the
Holder of the Partnership Preferred Securities, is required under the
Limited Partnership Agreement with respect to any amendment, modification
or termination of the Limited Partnership Agreement, the Property
Trustee shall request the direction of the Holders of the Trust Securities
with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Trust Securities
voting together as a single class; provided, however, that where a
consent under the Limited Partnership Agreement would require the
consent of the Holders of more than a majority of the aggregate liquidation
preference of the Partnership Preferred Securities, the Property
Trustee may only give such consent at the direction of the Holders of at
least the same proportion in aggregate stated liquidation amount of the
Trust Securities. The Property Trustee shall not take any such action
in accordance with the directions of the Holders of the Trust Securities
unless the Property Trustee has obtained an opinion of tax counsel to
the effect that, as a result of such action, the Trust will not be
classified as other than a grantor trust for United States federal
income tax purposes.
(f) A waiver of a Partnership Enforcement Event with respect
to the Partnership Preferred Securities will constitute a waiver of the
corresponding Trust Enforcement Event.
(g) Any required approval or direction of Holders of Trust
Preferred Securities may be given at a separate meeting of Holders of
Trust Preferred Securities convened for such purpose, at a meeting of
all of the Holders of Trust Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders
of Trust Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Trust Preferred Securities. Each
such notice will include a statement setting forth the following
information: (i) the date of such meeting or the date by which such action
is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or
of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents.
(h) No vote or consent of the Holders of Trust Preferred
Securities will be required for the Trust to redeem and cancel Trust
Preferred Securities or distribute Partnership Preferred Securities in
accordance with the Declaration.
(i) Notwithstanding that Holders of Trust Preferred Securities
are entitled to vote or consent under any of the circumstances
described above, any of the Trust Securities that are beneficially owned
at such time by the Company or any entity directly or indirectly controlled
by, or under direct or indirect common control with, the Company, shall not
be entitled to vote or consent and shall, for purposes
of such vote or consent, be treated as if such Trust Securities were not
outstanding, except for Trust Preferred Securities purchased or acquired
by the Company or its affiliates in connection with transactions effect-
ed by or for the account of customers of the Company or any of its
subsidiaries or in connection with the distribution or trading of such
Trust Securities; provided, however, that persons (other than affiliates
of the Company) to whom the Company or any of its subsidiaries have
pledged Trust Preferred Securities may vote or consent with respect to
such pledged Trust Preferred Securities pursuant to the terms of such
pledge.
(j) Holders of the Trust Preferred Securities will have no
rights to appoint or remove the Regular Trustees, who may be appointed,
removed or replaced solely by the Company, as the Holder of all of the
Trust Common Securities.
SECTION 8.5 Voting Rights of Trust Common Securities.
(a) Except as provided under this Section 8.5 or as otherwise
required by the Business Trust Act, the Trust Indenture Act or other
applicable law or provided by the Declaration, the Holders of the Trust
Common Securities will have no voting rights.
(b) The Holders of the Trust Common Securities are entitled,
in accordance with Article V of the Declaration, to vote to appoint,
remove or replace any Trustee or to increase or decrease the number of
Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
all Trust Enforcement Events with respect to the Trust Preferred Securities
have been cured, waived, or otherwise eliminated and subject to the
requirement of the Property Trustee obtaining a tax opinion in certain
circumstances set forth in this paragraph (c), the Holders of a Majority
in liquidation amount of the Trust Common Securities have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee under the Declara-
tion, including the right to direct the Property Trustee, as Holder of
the Partnership Preferred Securities, to (i) exercise the remedies
available to it under the Limited Partnership Agreement as a Holder of
the Partnership Preferred Securities, including the right to direct the
Special Representative of the Partnership as elected by the Holders of
the Partnership Preferred Securities in accordance with the Limited
Partnership Agreement (A) to enforce the Partnership's creditors rights
and other rights with respect to the Affiliate Investment Instruments
and any Investment Guarantees, (B) to enforce the rights of the Holders
of the Partnership Preferred Securities under the Partnership Guarantee,
and (C) to enforce the rights of the Holders of the Partnership Pre-
ferred Securities to receive distributions (if and to the extent such
distributions have been declared out of funds legally available therefor
by the General Partner in its sole discretion) on the Partnership
Preferred Securities or (ii) consent to any amendment, modification, or
termination of the Limited Partnership Agreement or the Partnership
Preferred Securities where such consent shall be required; provided,
however, that where a consent or action under the Limited Partnership
Agreement would require the consent or act of the Holders of more than a
majority of the aggregate liquidation preference of Partnership Preferred
Securities affected thereby, only the Holders of the percentage
of the aggregate stated liquidation amount of the Trust Common Securities
which is at least equal to the percentage required under the
Limited Partnership Agreement may direct the Property Trustee to give
such consent or take such action. Except with respect to directing the
time, method, and place of conducting a proceeding for a remedy, the
Property Trustee shall be under no obligation to take any of the actions
described in clause 8.5(c)(i) and (ii) above unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that,
as a result of such action, for United States federal income tax pur-
poses the Trust will not fail to be classified as a grantor trust and
each Holder will be treated as owning an undivided beneficial ownership
interest in the Partnership Preferred Securities.
(d) If the Property Trustee fails to enforce its rights under
the Partnership Preferred Securities after a Holder of record of Trust
Common Securities has made a written request, such Holder of record of
Trust Common Securities may directly institute a legal proceeding
directly against the Company, as General Partner of the Partnership or
the Special Representative, to enforce the Property Trustee's rights
under the Partnership Preferred Securities without first instituting any
legal proceeding against the Property Trustee or any other person or
entity. Notwithstanding the foregoing, if a Trust Enforcement Event has
occurred and is continuing and such event is attributable to the failure
of an Investment Affiliate to make any required payment when due on any
Affiliate Investment Instrument, then a Holder of Trust Common Securities
may directly institute a proceeding against such Investment Affiliate for
enforcement of payment with respect to such Affiliate Investment
Instrument.
(e) A waiver of a Partnership Enforcement Event with respect
to the Partnership Preferred Securities will constitute a waiver of the
corresponding Trust Enforcement Event.
(f) Any required approval or direction of Holders of Trust
Common Securities may be given at a separate meeting of Holders of Trust
Common Securities convened for such purpose, at a meeting of all of the
Holders of Trust Securities or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of Trust
Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Trust Common Securities. Each such notice
will include a statement setting forth the following information: (i)
the date of such meeting or the date by which such action is to be
taken; (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for
the delivery of proxies or consents.
(g) No vote or consent of the Holders of the Trust Common
Securities shall be required for the Trust to redeem and cancel Trust
Common Securities or to distribute Partnership Preferred Securities in
accordance with the Declaration and the terms of the Trust Securities.
SECTION 8.6 Paying Agent.
In the event that the Trust Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan,
City of New York, State of New York, an office or agency where the
Trust Preferred Securities may be presented for payment ("Paying
Agent"). The Trust may appoint the Paying Agent and may appoint one or
more additional paying agents in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent without prior notice to
any Holder. The Trust shall notify the Property Trustee of the name and
address of any Paying Agent not a party to this Declaration. If the
Trust fails to appoint or maintain another entity as Paying Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates
may act as Paying Agent. The Bank of New York shall initially act as
Paying Agent for the Trust Preferred Securities and the Trust Common
Securities.
SECTION 8.7 Listing
The Sponsor shall use its best efforts to cause the Trust
Preferred Securities to be listed for quotation on the New York Stock
Exchange.
SECTION 8.8 Acceptance of Guarantee and Agreements, Limited Partnership
Agreement.
Each Holder of Trust Preferred Securities and Trust Common
Securities, by the acceptance thereof, agrees to the provisions of the
applicable Trust Guarantee, the Partnership Guarantee, and the Investment
Guarantee, respectively, including the subordination provisions
therein.
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST
SECTION 9.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of Trust Common Securi
ties or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate
of cancellation with respect to the Trust after having obtained the
consent of at least a Majority in Liquidation Amount of the Trust
Securities, voting together as a single class, to file such certif
icate of cancellation, or the revocation of the Sponsor's charter
and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called
for redemption and the amounts necessary for redemption thereof
shall have been paid to the Holders in accordance with the terms of
the Trust Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Trust Special Event, pursuant to
which the Trust shall have been dissolved in accordance with the
terms of the Trust Securities and all of the Partnership Preferred
Securities shall have been distributed to the Holders of Trust
Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 9.1(a), the Trustees shall file a certificate
of cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article XI shall
survive the termination of the Trust.
SECITON 9.2 Liquidation Distribution Upon Termination and Dissolution
of the Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Trust
Liquidation"), the Holders of the Trust Preferred Securities on the date
of the Trust Liquidation will be entitled to receive, out of the assets
of the Trust available for distribution to Holders of Trust Securities
after satisfaction of the Trusts' liabilities and creditors, distributions
in cash or other immediately available funds in an amount equal to
the aggregate of the stated liquidation amount of $25 per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment
(such amount being the "Trust Liquidation Distribution"), unless, in
connection with such Trust Liquidation, Partnership Preferred Securities
shall be distributed on a Pro Rata basis to the Holders of the Trust
Securities in exchange for such Trust Securities.
(b) If, upon any such Trust Liquidation, the Trust Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Trust
Liquidation Distribution, then the amounts payable directly by the Trust
on the Trust Securities shall be paid on a Pro Rata basis. The Holders of
the Trust Common Securities will be entitled to receive distributions
upon any such Trust Liquidation Pro Rata with the Holders of the Trust
Preferred Securities except that if the Company is in default on any of
its obligations under the Trust Preferred Securities Guarantee, the
Partnership Guarantee, or any Investment Guarantee, or any Investment
Event of Default has occurred and is continuing with respect to an
Affiliate Investment Instrument, the Trust Preferred Securities shall
have a preference over the Trust Common Securities with regard to such
distributions as provided below. Such preference is effectuated by the
Holder of the Trust Common Securities hereby agreeing to provide limited
recourse guarantees as follows: (i) to the Holders of the Trust Preferred
Securities, of the Company's obligations under the Trust Pre-
ferred Securities Guarantee; (ii) to the Trust and the Holders of the
Trust Preferred Securities, of the Company's obligations under the Part-
nership Guarantee; and (iii) to the Partnership and the Holders of the
Trust Preferred Securities, of the Company's obligations under any
Investment Guarantee and/or the obligations of any Investment Affiliate
under an Affiliate Investment Instrument. In the case of the limited
recourse guarantee given by the Holder of the Trust Common Securities to
the Partnership and the Holder of the Trust Preferred Securities in
respect of the Company's obligations under any Investment Guarantee
and/or any Investment Affiliate's obligations under an Affiliate Investment
Instrument, (i) the Trust Common Securities Holder will be deemed
to have pledged the amount due in respect of its Trust Common Securities
upon a liquidation of the Trust to the Partnership and the Holders of
Trust Preferred Securities; (ii) the Trust Common Securities Holder will
be deemed to have paid such amount to the Partnership in respect of such
defaulted Investment Guarantee and/or Affiliate Investment Instrument,
as the case may be; (iii) the Partnership will be deemed to have paid
such amount to the Trust; and (iv) the Property Trustee is hereby
authorized to distribute such amount to the Holders of Trust Preferred
Securities (on a pro rata basis among such Trust Preferred Securities
Holders) in respect of the Trust Common Securities Holder's pledge of
such amounts to such Trust Preferred Securities Holders. In the case of
a limited recourse guarantee given by the Holder of the Trust Common
Securities to the Trust and the Holders of the Trust Preferred Securities
in respect of the Company's obligations under the Partnership
Guarantee, (i) the Holder of the Trust Common Securities will be deemed
to have pledged the amount due in respect of its Trust Common Securities
upon a liquidation of the Trust to the Trust and the Holders of the
Trust Preferred Securities; (ii) the Holder of the Trust Common Securities
will be deemed to have paid such amount to the Trust in respect of
its obligations under the Partnership Guarantee; and (iii) the Property
Trustee is hereby authorized to distribute such amount to the Holders of
the Trust Preferred Securities (on a pro rata basis among such Trust
Preferred Securities Holders) in respect of the Trust Common Securities
Holder's pledge of such amount to such Trust Preferred Securities
Holders.
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfer of Trust Securities.
(a) Trust Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any transfer or
purported transfer of any Trust Security not made in accordance with
this Declaration shall be null and void.
(b) Subject to this Article X, Trust Preferred Securities
shall be freely transferable.
SECTION 10.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges
that may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or
more new Certificates to be issued in the name of the designated transferee
or transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in
form satisfactory to the Regular Trustees duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the
Regular Trustees. A transferee of a Certificate shall be entitled to
the rights and subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 10.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the
sole Holder of such Certificate and of the Trust Securities represented
by such Certificate for purposes of receiving Distributions and for all
other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Certificate
or in the Trust Securities represented by such Certificate on the
part of any Person, whether or not the Trust shall have actual or other
notice thereof.
SECTION 10.4 Book Entry Interests.
Unless otherwise specified in the terms of the Trust Preferred
Securities, the Trust Preferred Securities Certificates, on original
issuance, will be issued in the form of one or more fully registered,
global Trust Preferred Security Certificates (each a "Global Certificate"),
to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede &
Co., the nominee of DTC, and no Trust Preferred Security Beneficial
Owner will receive a definitive Trust Preferred Security Certificate
representing such Trust Preferred Security Beneficial Owner's interests
in such Global Certificates, except as provided in Section 10.7. Unless
and until definitive, fully registered Trust Preferred Security Certifi-
cates (the "Definitive Trust Preferred Security Certificates") have been
issued to the Trust Preferred Security Beneficial Owners pursuant to
Section 10.7:
(a) the provisions of this Section 10.4 shall be in full
force and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Certificates and receiv
ing approvals, votes or consents hereunder) as the Holder of the
Trust Preferred Securities and the sole Holder of the Global
Certificates and shall have no obligation to the Trust Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 10.4
conflict with any other provisions of this Declaration, the provi
sions of this Section 10.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between
such Trust Preferred Security Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants and the Clearing
Agency shall receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. The
Clearing Agency will make book entry transfers among the Clearing
Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Trust
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Trust Preferred Security Certif
icates have not been issued, the Trustees may conclusively rely on,
and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Trust Preferred Security Beneficial
Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part.
SECTION 10.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Trust Pre-
ferred Security Holders is required under this Declaration, unless and
until Definitive Trust Preferred Security Certificates shall have been
issued to the Trust Preferred Security Beneficial Owners pursuant to
Section 10.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Trust Preferred
Security Holders to the Clearing Agency, and shall have no notice
obligations to the Trust Preferred Security Beneficial Owners.
SECTION 10.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities,
the Regular Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Trust Preferred Securities.
SECTION 10.7 Definitive Trust Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securi
ties and a successor Clearing Agency is not appointed within 90
days after such discontinuance pursuant to Section 10.6 or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Trust Preferred Securities,
(c) there is a Trust Enforcement Event,
then:
(d) Definitive Trust Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with
respect to such Trust Preferred Securities; and
(e) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular
Trustees shall cause Definitive Trust Preferred Security Certifi
cates to be delivered to Trust Preferred Security Beneficial Owners
in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively
rely on and shall be fully protected in relying on, said instruc
tions of the Clearing Agency. The Definitive Trust Preferred
Security Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trust
ees may deem appropriate, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Trust Pre
ferred Securities may be listed, or to conform to usage.
SECTION 10.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence
to their satisfaction of the destruction, loss or theft of any
Certificate; and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of
them harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate
under this Section 10.8, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the relevant Trust Securities, as
if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 11.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Trust Guarantees and the terms of the Trust Securities, the Sponsor and
the Trustees shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Trust Securities which shall be made solely from assets of the
Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Trust Securities shall be entitled to the same
limitation of personal liability extended to shareholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware.
SECTION 11.2 Exculpation.
(a) No Company Indemnified Person shall be liable, responsi-
ble or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Company Indemnified Person in good
faith on behalf of the Trust and in a manner such Company Indemnified
Person reasonably believed to be within the scope of the authority
conferred on such Company Indemnified Person by this Declaration or by
law, except that a Company Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Company Indemnified
Person's gross negligence (or, in the case of the Property Trustee,
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 Trust and upon such information,
opinions, reports or statements presented to the Trust 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 Trust, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts perti-
nent to the existence and amount of assets from which Distributions to
Holders of Trust Securities might properly be paid.
SECTION 11.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or
to any other Covered Person for its good faith reliance on the provisions
of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the duties
imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabili-
ties of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement contem
plated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles.
In the absence of bad faith by the Indemnified Person, the resolution,
action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified
Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar author
ity, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests,
and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Trust or any other Person;
or
(ii)_in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 11.4 Indemnification.
(a) (i) To the fullest extent permitted by applicable law,
the Sponsor shall indemnify and hold harmless any Company Indem
nified Person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or pro
ceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of
the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in con
nection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor by reason of the fact that he is
or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connec
tion with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that
no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the
extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chan
cery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceed
ing referred to in paragraphs (i) and (ii) of this Section 11.4(a),
or in defense of any claim, issue or matter therein, he shall be
indemnified, to the fullest extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 11.4(a) (unless ordered by a court) shall be made by
the Sponsor only as authorized in the specific case upon a determi
nation that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a major
ity vote of a quorum consisting of such Regular Trustees who were
not parties to such action, suit or proceeding, (2) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Holder of the Trust
Common Securities.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal, adminis
trative or investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 11.4(a) shall be paid by
the Sponsor in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified
by the Sponsor as authorized in this Section 11.4(a). Notwith
standing the foregoing, no advance shall be made by the Sponsor if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii)
the Holder of the Trust Common Securities, that, based upon the
facts known to the Regular Trustees, counsel or the Holder of the
Trust Common Securities at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Holder of the Trust Common Securities
reasonably determine that such person deliberately breached his
duty to the Trust or Holders of Trust Common Securities.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
11.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of shareholders or disinterested
directors of the Sponsor or Holders of the Trust Preferred Securi
ties or otherwise, both as to action in his official capacity and
as to action in another capacity while holding such office. All
rights to indemnification under this Section 11.4(a) shall be
deemed to be provided by a contract between the Sponsor and each
Company Indemnified Person who serves in such capacity at any time
while this Section 11.4(a) is in effect. Any repeal or modifica
tion of this Section 11.4(a) shall not affect any rights or obliga
tions then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemni
fied Person against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such,
whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section
11.4(a).
(viii) For purposes of this Section 11.4(a), references to
"the Trust" shall include, in addition to the resulting or surviv
ing entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of
such constituent entity, or is or was serving at the request of
such constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position under
the provisions of this Section 11.4(a) with respect to the result
ing or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 11.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees
or agents of the Property Trustee and the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless
against, any loss, damage, claim, liability or expense including
taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee 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 investi-
gating any claim or liability in connection with the exercise or perfor-
mance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 11.4(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 11.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, nor the
Property Trustee shall be obligated to present any particular investment
or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered
Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent
for, or act on any committee or body of Holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XII
ACCOUNTING
SECTION 12.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year.
SECTION 12.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable
detail, each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with
generally accepted accounting principles, consistently applied. The
books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm
of independent certified public accountants selected by the Regular
Trustees.
(b) Within 60 days after May 15 of each year commencing May
15, 1998, the Property Trustee shall provide to the Holders of the Trust
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 Property Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Trust Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the
Trust with any state or local taxing authority.
SECTION 12.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all
payments of funds in respect of the Partnership Preferred Securities
held by the Property Trustee shall be made directly to the Property
Account and no other funds of the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Account.
SECTION 12.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local
law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with
respect to the Holder to applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder,
the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding. Notwithstanding
anything herein to the contrary, the Trust and the Regular Trustees
shall, absent receipt of an opinion of tax counsel substantially to the
effect that withholding is not required, withhold thirty percent (30%)
(or such other rate as may be imposed as a result of an amendment to the
Code or such lower rate as may be imposed under an applicable income tax
treaty) on the gross amount of any Distributions on Trust Preferred
Securities held by a Holder that is not a "United States person" within
the meaning of section 7701(a)(30) of the Code.
ARTICLE XIII
AMENDMENTS AND MEETINGS
SECTOIN 13.1 Amendments.
(a) Except as otherwise provided in this Declaration or by
any applicable terms of the Trust Securities, this Declaration may only
be amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Declaration
(including the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of
the Property Trustee, the Property Trustee shall have first re
ceived an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Trust
Securities); and
(iii) to the extent the result of such amendment would:
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a
grantor trust;
(B) cause the Partnership to be classified for purposes
of United States federal income tax as an association or
publicly traded partnership taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture
Act; or
(D) cause the Trust to be deemed to be an Investment
Company required to be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the
Holder of the Partnership Preferred Securities is required under the
Limited Partnership Agreement with respect to any amendment, modifica-
tion or termination of the Limited Partnership Agreement or the Partner-
ship Preferred Securities the Property Trustee shall request the direc-
tion of the Holders of the Trust Securities with respect to such amend-
ment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in
liquidation amount of the Trust Securities voting together as a single
class; provided, however, that where a consent under the Limited
Partnership Agreement would require the consent of a Super Majority of
the Holders of Partnership Preferred Securities the Property Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Trust Securities which the rele-
vant Super Majority represents of the aggregate liquidation preference
of the Partnership Preferred Securities outstanding; provided, further,
that the Property Trustee shall not be obligated to take any action in
accordance with the directions of the Holders of the Trust Securities
under this Section 13.1(c) unless the Property Trustee has obtained an
opinion of independent tax counsel to the effect that for United States
federal income tax purposes the Trust will continue to be classified as
a grantor trust after consummation of such action and each Holder will
be treated as owning an undivided beneficial ownership interest in the
Partnership Preferred Securities.
(d) At such time after the Trust has issued any Trust Securities
that remain outstanding, any amendment that would (I) adversely
affect the powers, preferences or special rights of the Trust Securities
or (II) provide for the dissolution, winding-up or termination of the
Trust other than pursuant to the terms of this Declaration, may be
effected only with the approval of the Holders of at least a Majority in
liquidation amount of the Trust Securities affected thereby; provided,
that if any amendment or proposal referred to in clause (I) hereof would
adversely affect only the Trust Preferred Securities or the Trust Common
Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a Majority in liquidation amount
of such class of Trust Securities;
(e) Section 11.1(c) and this Section 13.1 shall not be
amended without the consent of all of the Holders of the Trust Securities;
(f) Article IV shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Trust Common
Securities and;
(g) The rights of the Holders of the Trust Common Securities
under Article V to increase or decrease the number of, and appoint and
remove, Trustees shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Trust Common Securities; and
(h) Notwithstanding Section 13.1(c), this Declaration may be
amended without the consent of the Holders of the Trust Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Declara
tion that may be defective or inconsistent with any other provision
of this Declaration;
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in the 1940 Act or written
change in interpretation or application of the rules and regula
tions promulgated thereunder by any legislative body, court, gov
ernment agency or regulatory authority;
(v) to conform to any change in the Trust Indenture Act or
written change in interpretation or application of the rules and
regulations promulgated thereunder by any legislative body, court,
government agency or regulatory authority; and
(vi) to modify, eliminate and add to any provision of this
Declaration to such extent as may be necessary;
provided, that such amendments do not have a material adverse effect on
the rights, preferences or privileges of the Holders.
SECTION 13.2 Meetings of the Holders of Trust Securities;
Action by Written Consent.
(a) Meetings of the Holders of any class of Trust Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Trust Securities) to consider and act on any matter on
which Holders of such class of Trust Securities are entitled to act
under the terms of this Declaration, the terms of the Trust Securities,
the Limited Partnership Agreement, the rules of any stock exchange on
which the Trust Preferred Securities are listed or admitted for trading,
the Business Trust Act or other applicable law. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so
by the Holders of at least 10% in liquidation amount of such class of
Trust Securities. Such direction shall be given by delivering to the
Regular Trustees one or more notices in a writing stating that the
signing Holders of Trust Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be
called. Any Holders of Trust Securities calling a meeting shall specify
in writing the Certificates held by the Holders of Trust Securities
exercising the right to call a meeting and only those Trust Securities
specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph
has been met.
(b) Except to the extent otherwise provided in the terms of
the Trust Securities, the following provisions shall apply to meetings
of Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat at least
7 days and not more than 60 days before the date of such meeting.
Any action that may be taken at a meeting of the Holders of Trust
Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of Trust
Securities owning not less than the minimum amount of Trust Securi
ties in liquidation amount that would be necessary to authorize or
take such action at a meeting at which all Holders of Trust Securi
ties having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be
given to the Holders of Trust Securities entitled to vote who have
not consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holder for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Trust
Securities is entitled to participate, including waiving notice of
any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Trust Securities
executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if
the Trust were a Delaware corporation and the Holders of the Trust
Securities were shareholders of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities
shall be conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Trust Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Trust Preferred
Securities are then listed for trading, otherwise provides, the
Regular Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of Trust Securi
ties, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Trust
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 14.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Property Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Property
Trustee's acceptance of its appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation
with trust powers, duly organized, validly existing and in good
standing under the laws of New York, with trust power and authority
to execute and deliver, and to carry out and perform its obliga
tions under the terms of, the Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all neces
sary corporate action on the part of the Property Trustee. The
Declaration has been duly executed and delivered by the Property
Trustee and constitutes a legal, valid and binding obligation of
the Property Trustee, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, morato
rium, insolvency, and other similar laws affecting creditors'
rights generally and to general principles of equity and the dis
cretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of the Declara
tion by the Property Trustee does not conflict with or constitute a
breach of the Articles of Organization or By-laws of the Property
Trustee;
(d) No consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of this Declaration; and
(e) The Property Trustee agrees that, except as expressly
provided or contemplated by this Agreement, it will not create,
incur or assume, or suffer to exist any mortgage, pledge,
hypothecation, encumbrance, lien or other charge or security
interest upon the Partnership Preferred Securities.
SECTION 14.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Delaware
Trustee's acceptance of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation with, duly
organized, validly existing and in good standing under the laws of
the State of Delaware, with power and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, the Declaration;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
The Declaration, under Delaware law, constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it
in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in
equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is
required for the execution, delivery or performance by the Delaware
Trustee of the Declaration; and
(d) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Trust Securi
ties):
UDS CAPITAL I
c/o Ultramar Diamond Shamrock
Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer.
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may
give notice of to the other Trustees):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Administration
(c) if given to the Property Trustee, at its Corporate Trust
Office to the attention of Walter N. Gitlin, Vice President (or
such other address as the Property Trustee may give notice of to
the Holders of the Trust Securities and the other Trustee).
(d) if given to the Holder of the Trust Common Securities, at
the mailing address of the Sponsor set forth below (or such other
address as the Holder of the Trust Common Securities may give
notice of to the Trust):
UDS CAPITAL I
c/o Ultramar Diamond Shamrock
Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer.
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
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 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and construed in accordance with the internal laws of the
State of Delaware and all rights and remedies shall be governed by such
laws without regard to principles of conflict of laws.
SECTION 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to
further this intention of the parties.
SECTION 15.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of
this Declaration or any provision hereof.
SECTION 15.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be
deemed to be included, and all covenants and agreements in this Declaration
by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
SECTION 15.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 15.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of
the signature of each of the Trustees and a duly authorized officer of
the Sponsor to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, each of the undersigned has caused these
presents to be executed as of the day and year first above written.
/s/ H. PETE SMITH
H. Pete Smith, as Regular Trustee
/s/ STEVE BLANK
Steve Blank, as Regular Trustee
/s/ PATTI K. MEISETSCHLEAGER
Patti K. Meisetschleager, as
Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ WALTER GITLIN
Name: Walter Gitlin
Title: Vice President
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ WALTER GITLIN
Name: Walter Gitlin
Title: Vice President
ULTRAMAR DIAMOND SHAMROCK
CORPORATION,
as Sponsor
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and Treasurer
<PAGE>
EXHIBIT A1
FORM OF PREFERRED SECURITY CERTIFICATE
This Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in
the name of The Depository Trust Company (the "Depositary") or a nominee
of the Depositary. This Trust Preferred Security is exchangeable for
Trust Preferred Securities registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances described
in the Declaration and no transfer of this Trust Preferred
Security (other than a transfer of this Trust Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Deposi-
tary) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York), a New York corporation, to the Trust or its agent for
registration of transfer, exchange or payment, and any Trust Preferred
Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and
any payment hereon is made to Cede & Co. or such other entity as is re-
quested by an authorized representative of the Depositary, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
<PAGE/>
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to trans-
fer this Trust Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Trust
Preferred Security Certificate)
Signature Guarantee (2):
(2) Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such other "signature guaran
tee program" as may be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securi
ties and Exchange Act of 1934, as amended.
****
<PAGE/>
<PAGE>
TP-1 Aggregate Liquidation
Amount: $200,000,000
CUSIP NO.
Certificate Evidencing Trust Preferred Securities
of
UDS CAPITAL I
8.32% Trust Preferred Securities
(liquidation amount $25 per Trust Preferred Security)
UDS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede
& Co. (the "Holder") is the registered owner of 8,000,000 preferred
securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 8.32% Trust Preferred
Securities (liquidation amount $25 per Trust Preferred Security)
(the "Trust Preferred Securities"). The Trust Preferred Securities are
freely transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights,
powers, privileges, restrictions, preferences and other terms and provi-
sions of the Trust Preferred Securities represented hereby are set forth
in, issued under and shall in all respects be subject to the provisions
of the Amended and Restated Declaration of Trust dated as of June 25,
1997, as the same may be amended from time to time (the "Declaration").
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits
of the Trust Preferred Securities Guarantee to the extent provided
therein. Each Holder of a Trust Preferred Security, by acceptance of
this Certificate and each Certificate owner, by acquisition of a beneficial
interest in a Certificate, agrees to treat the Debentures, and any
other Affiliate Investment Instruments that are treated as debt instru-
ments by the relevant Investment Affiliate and by the Partnership, as
indebtedness for United States federal income tax purposes. The Sponsor
will provide a copy of the Declaration, the Trust Preferred Securities
Guarantee and the Limited Partnership Agreement to a Holder without
charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 25th day of June, 1997.
UDS CAPITAL I
Steve Blank,
as Regular Trustee
CERTIFICATE OF AUTHENTICATION
This is the Trust Preferred Security described in the
within-mentioned Declaration.
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Signatory
Dated: June 25, 1997
(See reverse for additional terms)
<PAGE/>
[FORM OF REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.32% of the stated
liquidation amount of $25 per Trust Preferred Security. Distributions
on the Trust Preferred Securities shall, from the date of original
issue, accumulate and be cumulative and shall be payable quarterly only
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. Distributions not paid on the
scheduled payment date will accumulate and compound quarterly (to the
extent permitted by applicable law) at the rate of 8.32% per annum. The
term "Distributions" as used herein shall mean ordinary cumulative
distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribution
to the holders of the Trust Preferred Securities will be limited to
payments received by the Trust from the Partnership on the Partnership
Preferred Securities or from the Company on the Partnership Guarantee.
Distributions on the Partnership Preferred Securities will be paid only
if, as and when declared in the sole discretion of the Company, as the
General Partner of the Partnership. If and to the extent that the Part-
nership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment
being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are available for that purpose, to make a
Pro Rata Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period on the basis of the actual number of days
elapsed in a 90-day quarter.
Except as otherwise described herein, distributions on the Trust
Preferred Securities will be cumulative, will accumulate from the date
of initial issuance and will be payable quarterly in arrears, on March
31, June 30, September 30 and December 31 of each year, commencing on
June 30, 1997, if, as and when available for payment by the Property
Trustee. If the Trust Preferred Securities (or, if the Trust is
liquidated, the Partnership Preferred Securities) are in book-entry-only
form, Distributions will be payable to the Holders of record of Trust
Preferred Securities as they appear on the books and records of the
Trust on the relevant record dates, which will be one Business Day prior
to the relevant payment dates. If the Trust Preferred Securities (or,
if the Trust is liquidated, the Partnership Preferred Securities) do not
remain in book-entry-only form, the relevant record dates shall be the
15th day of the month of the relevant payment dates. In the event that
any date on which distributions are payable is not a Business Day,
payment of such Distribution shall be made on the next succeeding day
which is a Business Day (without any interest or other payment in
respect of any such delay) except that, if such Business Day falls in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, with the same force and effect as if
made on such date. Payments of accumulated Distributions will be
payable to Holders of record of Trust Preferred Securities as they
appear on the books and records of the Trust on the record date with
respect to the payment date for the Trust Preferred Securities which
corresponds to the payment date fixed by the Partnership with respect to
the payment of cumulative distributions on the Partnership Preferred
Securities.
The Trust Preferred Securities shall be redeemable as provided
in the Declaration.
<PAGE>
EXHIBIT A2
FORM OF COMMON SECURITY CERTIFICATE
TC-1 Aggregate Liquidation
Amount: $6,186,000
Certificate Evidencing Trust Common Securities
of
UDS CAPITAL I
8.32% Trust Common Securities
(liquidation amount $25 per Trust Common Security)
UDS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
Ultramar Diamond Shamrock Corporation, a Delaware corporation (the
"Holder") is the registered owner of 247,440 common securities of the
Trust representing undivided beneficial ownership interests in the
assets of the Trust designated the 8.32% Trust Common Securities (liqui-
dation amount $25 per Trust Common Security) (the "Trust Common Securi-
ties"). The designation, rights, powers, privileges, restrictions,
preferences and other terms and provisions of the Trust Common Securi-
ties represented hereby are set forth in, issued under and shall in all
respects be subject to the provisions of the Amended and Restated Decla-
ration of Trust dated as of June 25, 1997, as the same may be amended
from time to time (the "Declaration"). Capitalized terms used herein
but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Trust Common Securities
Guarantee to the extent provided therein. Each Holder of a Trust Common
Security, by acceptance of this Certificate, agrees to treat the Deben-
tures, and any other Affiliate Investment Instruments that are treated
as debt instruments by the relevant Investment Affiliate and by the
Partnership, as indebtedness for United States federal income tax
purposes. The Sponsor will provide a copy of the Declaration, the Trust
Common Securities Guarantee and the Limited Partnership Agreement to a
Holder without charge upon written request to the Sponsor at its princi-
pal place of business. THE TRUST COMMON SECURITIES ARE TRANSFERABLE ON
THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF
THE DECLARATION.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 25th day of June, 1997.
UDS CAPITAL I
Steve Blank,
as Regular Trustee
(See reverse for additional terms)
<PAGE/>
<PAGE>
[FORM OF REVERSE OF SECURITY]
Holders of Trust Common Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.32% of the stated
liquidation amount of $25 per Trust Common Security. Distributions on
the Trust Common Securities shall, from the date of original issue,
accumulate and be cumulative and shall be payable quarterly only to the
extent that the Trust has funds available for the payment of such
distributions in the Property Account. Distributions not paid on the
scheduled payment date will accumulate and compound quarterly (to the
extent permitted by applicable law) at the rate of 8.32% per annum. The
term "Distributions" as used herein shall mean ordinary cumulative
distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribu-
tion to the holders of the Trust Common Securities will be limited to
payments received by the Trust from the Partnership on the Partnership
Preferred Securities or from the Company on the Partnership Guarantee.
Distributions on the Partnership Preferred Securities will be paid only
if, as and when declared in the sole discretion of the Company, as the
General Partner of the Partnership. If and to the extent that the
Partnership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment
being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are available for that purpose, to make a
Pro Rata Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period, on the basis of the actual number of days
elapsed in a 90-day quarter.
Except as otherwise described herein, distributions on the Trust
Common Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing on June
30, 1997 if, as and when available for payment by the Property Trustee.
Distributions will be payable to the Holders of record of Trust Common
Securities as they appear on the books and records of the Trust on the
relevant record dates, which will be one Business Day prior to the rele-
vant payment dates. In the event that any date on which distributions
are payable is not a Business Day, payment of the Distribution shall be
made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. Payments
of accumulated Distributions will be payable to Holders of record of
Trust Common Securities as they appear on the books and records of the
Trust on the record date with respect to the payment date for the Trust
Common Securities which corresponds to the payment date fixed by the
Partnership with respect to the payment of cumulative distributions on
the Partnership Preferred Securities.
The Trust Common Securities shall be redeemable as provided in
the Declaration.
<PAGE/>
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Common Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Trust
Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Trust
Common Security Certificate)
Signature Guarantee (3):
(3) Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such other "signature guaran
tee program" as may be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securi
ties and Exchange Act of 1934, as amended.
<PAGE/>
EXHIBIT 4.2
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
UDS FUNDING I, L.P.
Dated as of June 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP
Section 2.2 NAME
Section 2.3 PURPOSES OF THE PARTNERSHIP
Section 2.4 TERM
Section 2.5 REGISTERED AGENT AND OFFICE
Section 2.6 PRINCIPAL PLACE OF ACTIVITY
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED SECURI
TIES; WITHDRAWAL OF INITIAL LIMITED PARTNER
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS
Section 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST REPRE
SENTED BY PARTNERSHIP PREFERRED SECURITIES
Section 3.3 CAPITAL ACCOUNTS
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES
Section 4.2 SPECIAL ALLOCATION
Section 4.3 WITHHOLDING
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS
Section 5.2 LIMITATIONS ON DISTRIBUTIONS
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PREFERRED
SECURITIES
Section 6.2 PARTNERSHIP PREFERRED SECURITIES
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS
Section 8.2 ACCOUNTING METHOD
Section 8.3 ANNUAL AUDIT
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS
Section 10.2 LIABILITY
Section 10.3 PRIORITY
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER
Section 11.4 LIABILITY
Section 11.5 OUTSIDE ACTIVITIES
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS
Section 11.7 EXCULPATION
Section 11.8 FIDUCIARY DUTY
Section 11.9 INDEMNIFICATION
Section 11.10 TAX MATTERS
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS
Section 12.2 TRANSFER OF L.P. CERTIFICATES
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED PARTNER
SHIP PREFERRED SECURITY HOLDERS
Section 12.4 BOOK ENTRY PROVISIONS
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS
Section 13.2 DISSOLUTION OF THE PARTNERSHIP
Section 13.3 LIQUIDATION
Section 13.4 DISTRIBUTION IN LIQUIDATION
Section 13.5 RIGHTS OF LIMITED PARTNERS
Section 13.6 TERMINATION
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS
Section 14.2 AMENDMENT OF CERTIFICATE
Section 14.3 MEETINGS OF PARTNERS
ARTICLE XV
MISCELLANEOUS
Section 15.1 NOTICES
Section 15.2 POWER OF ATTORNEY
Section 15.3 ENTIRE AGREEMENT
Section 15.4 GOVERNING LAW
Section 15.5 EFFECT
Section 15.6 PRONOUNS AND NUMBER
Section 15.7 CAPTIONS
Section 15.8 PARTIAL ENFORCEABILITY
Section 15.9 COUNTERPARTS
Section 15.10 WAIVER OF PARTITION
Section 15.11 REMEDIES
Schedule 1 LIST OF PARTNERS
Annex A FORM OF L.P. CERTIFICATE
Exhibit A FORM OF INDENTURE OF ULTRAMAR DIAMOND SHAMROCK
CORPORATION
Exhibit B FORM OF INDENTURE FOR SUBSIDIARIES
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
UDS FUNDING I, L.P.
June 25, 1997
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of UDS
Funding I, L.P., a Delaware limited partnership (the "Partnership"),
dated as of June 25, 1997, among Ultramar Diamond Shamrock Corporation a
Delaware corporation (the "Company"), as the general partner, H. Pete
Smith, as the initial limited partner (the "Initial Limited Partner")
and such other Persons (as defined herein) who become Limited Partners
(as defined herein) as provided herein.
WHEREAS, the Company and the Initial Limited Partner entered
into an Agreement of Limited Partnership of UDS Funding I, L.P. dated as
of June 5, 1997 (the "Original Partnership Agreement"), and the Partners
(as defined herein) desire to continue the Partnership under the Act (as
defined herein) and to amend and restate the Original Partnership Agree-
ment in its entirety;
WHEREAS, the Certificate of Limited Partnership of the
Partnership was filed with the Office of the Secretary of State of the
State of Delaware on June 5, 1997;
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and restate the Original
Partnership Agreement as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise
requires, the terms defined in this Article I shall, for the purposes of
this Agreement, have the meanings herein specified. Terms used in this
Agreement and not otherwise defined herein shall have the meanings
ascribed to such terms in the Declaration.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, Del. Code Ann. tit. 6, Section 17-101 et seq., as amended from time to
time.
"Affiliate" has the meaning set forth in Section 1.1 of the
Declaration.
"Affiliate Investment Instruments" has the meaning set forth
in Section 7.1 of this Agreement.
"Agreement" means this Amended and Restated Agreement of
Limited Partnership, as it may be amended or supplemented from time to
time.
"Beneficiaries" has the meaning set forth in Section 11.3 of
this Agreement.
"Book-Entry Interest" means a beneficial interest in the L.P.
Certificates, ownership and transfers of which shall be maintained and
made through book entries of a Clearing Agency as set forth in Section
12.4 of this Agreement.
"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.
"Capital Account" has the meaning set forth in Section 3.3 of
this Agreement.
"Certificate" means the Certificate of Limited Partnership of
the Partnership filed with the Secretary of State of the State of
Delaware on June 5, 1997, as it may be amended and restated from time to
time.
"Change in 1940 Act Law" has the meaning set forth in Section
1.1 of the Declaration.
"Closing Date" has the meaning set forth in Section 1.1 of the
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Company" means Ultramar Diamond Shamrock Corporation, a Dela-
ware corporation.
"Compounded Distributions" has the meaning set forth in
Section 6.2 of this Agreement.
"Declaration" means the Amended and Restated Declaration of
Trust by and among the Company, as Sponsor, the Property Trustee, the
Delaware Trustee, and the Regular Trustees, dated as of June 25, 1997.
"Definitive L.P. Certificates" has the meaning set forth in
Section 12.4(a) of this Agreement.
"Delaware Partnership Act" means the Revised Uniform Limited
Partnership Act of the State of Delaware (6 Del. C. Section 17-101, et
seq.).
"Delaware Trustee" has the meaning set forth in Section 6.2 of
the Declaration.
"Distribution Payment Date" has the meaning set forth in
Section 6.2(b)(ii) of this Agreement.
"Distributions" means the cumulative cash distributions
payable by the Partnership with respect to the Interests represented by
the Partnership Preferred Securities, which amounts will accumulate on
the $25 liquidation preference of each Partnership Preferred Security
from the Closing Date and are payable quarterly in arrears in accordance
with Sections 5.1 and 6.2(b) of this Agreement.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Eligible Debt Securities" means cash or book-entry
securities, negotiable instruments, or other securities of entities not
affiliated with the Company represented by instruments in registered
form which evidence any of the following: (a) any security issued or
guaranteed as to principal or interest by the United States, or by a
person controlled or supervised by and acting as an instrumentality of
the Government of the United States pursuant to authority granted by the
Congress of the United States, or any certificate of deposit for any of
the foregoing; (b) commercial paper issued pursuant to Section 3(a)(3)
of the Securities Act of 1933 (the "Securities Act") and having, at the
time of the investment or contractual commitment to invest therein, a
rating from each of S&P and Moody's in the highest rating category
granted by such rating agency and having a maturity not in excess of
nine months; (c) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC, in no case having a
maturity greater than nine months; (d) repurchase obligations, having a
maturity of no greater than nine months; with respect to any security
that is a direct obligation of, or fully guaranteed by, the Government
of the United States of America or any agency or instrumentality there-
of, the obligations of which are backed by the full faith and credit of
the United States of America, in either case entered into with a
depository institution or trust company which is an Eligible Institution
and the deposits of which are insured by the FDIC; and (e) any other
security which is identified as a permitted investment of a finance
subsidiary pursuant to Rule 3a-5 under the 1940 Act at the time it is
acquired by the Partnership.
"Eligible Institution" means a depository institution
organized under the laws of the United States of America or any one of
the states thereof or the District of Columbia (or any domestic branch
of a foreign bank), (1)(i) which has either (A) a long-term unsecured
debt rating of AA or better by S&P and Aa or better by Moody's or (B) a
short-term unsecured debt rating or a certificate of deposit rating of
A-1+ or better by S&P and P-1 or better by Moody's and (ii) whose
deposits are insured by the FDIC or (2)(i) the parent of which has a
long-term or short-term unsecured debt rating which signifies investment
grade and (ii) whose deposits are insured by the FDIC.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Finance Subsidiary" means any wholly-owned subsidiary of the
Company the principal purpose of which is to raise capital for the
Company by issuing securities that are guaranteed by the Company and the
proceeds of which are loaned to or invested in the Company or one or
more of its affiliates.
"Fiscal Period" means each calendar quarter.
"Fiscal Year" means the calendar year.
"General Partner" means Ultramar Diamond Shamrock Corporation,
in its capacity as the general partner of the Partnership, its permitted
successors, or any successor general partner in the Partnership admitted
as such pursuant to the terms of this Agreement.
"General Partner Capital Contribution" means the contribution
by the General Partner to the Partnership made contemporaneous with the
issuance of the Partnership Preferred Securities.
"General Partner Interest" means the Interest of the General
Partner in the Partnership.
"Holder" or "Partnership Preferred Security Holder" means a
Limited Partner in whose name an L.P. Certificate representing
Partnership Preferred Securities is registered.
"Indentures" means the Indentures between the Company or
certain of its subsidiaries, as the case may be, and The Bank of New
York, as Indenture Trustee, dated as of June 25, 1997, forms of which
are attached hereto as Exhibits A and B, respectively.
"Independent Financial Adviser" shall mean a nationally recog-
nized accounting firm, bank or investment banking firm which shall be
designated by the Company and which firm does not (and whose directors,
officers, employees and affiliates do not) have a direct or indirect
material equity interest in the Company or any of its subsidiaries.
"Initial Affiliate Debentures" has the meaning set forth in
Section 7.1(b) of this Agreement.
"Initial Company Debenture" has the meaning set forth in
Section 7.1(b) of this Agreement.
"Initial Debentures" means collectively, the Initial Company
Debenture and the Initial Affiliate Debentures.
"Initial Limited Partner" means H. Pete Smith.
"Initial Partnership Proceeds" means the aggregate proceeds
received by the Partnership from the sale of the Partnership Preferred
Securities and the General Partner Capital Contribution.
"Interest" means the entire ownership interest of a Partner in
the Partnership at any particular time, including, without limitation,
its interest in the capital, profits, and losses of, and distributions
from, the Partnership.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that (i) is controlled by the Company and (ii)
is not an investment company by reason of Section 3(a) or 3(b) of the
1940 Act or is otherwise an eligible recipient of funds directly or
indirectly from the Trust pursuant to an order issued by the Securities
and Exchange Commission.
"Investment Event of Default" means an event of default under
any Affiliate Investment Instrument that is a debt instrument or the
breach by an Investment Affiliate of its obligations under any Affiliate
Investment Instrument that is an equity instrument.
"Investment Guarantee" has the meaning specified in Section
1.1 of the Declaration.
"Investment Offer" has the meaning specified in Section 7.2(b)
of this Agreement.
"Limited Partner" means any Person who is admitted to the
Partnership as a limited partner pursuant to the terms of this
Agreement, in such Person's capacity as a limited partner of the
Partnership.
"Liquidator" has the meaning specified in Section 13.3 of this
Agreement.
"L.P. Certificate" means a certificate substantially in the
form attached hereto as Annex A, evidencing the Partnership Preferred
Securities held by a Limited Partner.
"Majority in Liquidation Preference" means Holder(s) of
Partnership Preferred Securities who are the record owners of Partner-
ship Preferred Securities whose aggregate liquidation preferences repre-
sent more than 50% of the aggregate liquidation preference of all
Partnership Preferred Securities then outstanding.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal
Period mean the income and loss, respectively, of the Partnership for
such Fiscal Period as determined in accordance with the method of
accounting followed by the Partnership for United States federal income
tax purposes, including, for all purposes, the net income, if any, from
the Affiliate Investment Instruments, Eligible Debt Securities and any
income exempt from tax and any noncapital, nondeductible expenditures of
the Partnership which are described in the Code.
"1940 Act" has the meaning set forth in Section 1.1 of the
Declaration.
"Original Partnership Agreement" has the meaning set forth in
the recitals to this Agreement.
"Partners" means the General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which
the term is used.
"Partnership Covered Person" means any Partner, any Affiliate
of a Partner or any officers, directors, shareholders, partners,
members, employees, representatives or agents of a Partner or its
respective Affiliates, or any employee or agent of the Partnership or
its Affiliates or any Special Representative.
"Partnership Enforcement Event" has the meaning set forth in
Section 6.2(h)(i) of this Agreement.
"Partnership Guarantee" means the Partnership Guarantee
Agreement dated as of June 25, 1997 by the Company in favor of the Par-
tnership Preferred Security Holders with respect to the Partnership Pre-
ferred Securities, as amended or supplemented from time to time.
"Partnership Indemnified Person" means the General Partner,
any Special Representative, any Affiliate of the General Partner or any
Special Representative or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the General
Partner or any Special Representative, or any of their respective
Affiliates, or any employee or agent of the Partnership or its Affili-
ates.
"Partnership Investment Company Event" means that the General
Partner shall have requested and received an opinion of nationally
recognized independent legal counsel experienced in such matters to the
effect that as a result of the occurrence on or after the date hereof of
a Change in 1940 Act Law, the Partnership is or will be considered an
"investment company" which is required to be registered under the 1940
Act.
"Partnership Liquidation Distribution" has the meaning set
forth in Section 6.2(g) of this Agreement.
"Partnership Preferred Securities" represent the Interests of
Limited Partners and have the preference and designation set forth in
Section 6.2(a) of this Agreement.
"Partnership Preferred Securities Purchase Agreement" means
the partnership purchase agreement between the Trust and the Partnership
providing for the purchase of the Partnership Preferred Securities.
"Partnership Preferred Security Owner" means, with respect to
a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest as reflected on the books of DTC, or on the books of a
Person maintaining an account with DTC (directly as a participant or as
an indirect participant, in each case in accordance with the rules of
DTC or such participant).
"Partnership Special Event" means either a Partnership Tax
Event or a Partnership Investment Company Event.
"Partnership Successor Securities" has the meaning set forth
in Section 11.11 of this Agreement.
"Partnership Tax Event" means that the General Partner shall
have requested and received an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that
there has been a Tax Action which affects any of the events described in
(i) through (iii) below and that there is more than an insubstantial
risk that (i) the Partnership is, or will be, subject to United States
federal income tax with respect to income accrued or received on the
Affiliate Investment Instruments or the Eligible Debt Securities, (ii)
the Partnership is, or will be, subject to more than a de minimis amount
of other taxes, duties or other governmental charges or (iii) interest
payable by an Investment Affiliate with respect to the Initial Deben-
tures is not, or will not be, deductible by such Investment Affiliate
for United States federal income tax purposes.
"Paying Agent" shall have the meaning set forth in Section
12.5 of this Agreement.
"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.
"Power of Attorney" means the Power of Attorney granted
pursuant to Section 15.2 of this Agreement.
"Property Trustee" has the meaning set forth in Section 1.1 of
the Declaration.
"Purchase Agreement" means the Purchase Agreement dated June
20, 1997 among the Company, the Trust, the Partnership and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"Record Date" means (i) as long as the Trust Preferred
Securities remain (or, in the event that the Trust is liquidated in
connection with a Trust Special Event, as long as the Partnership
Preferred Securities remain) in book-entry only form, one Business Day
prior to the relevant payment dates and (ii) in the event that the Trust
Preferred Securities (or in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred
Securities) shall not continue to remain in book-entry only form, the
15th day of the month of the relevant payment date.
"Redemption Notice" has the meaning set forth in Section
6.2(e) of this Agreement.
"Redemption Price" has the meaning set forth in Section 6.2(c)
of this Agreement.
"Registrar" has the meaning set forth in Section 12.5 of this
Agreement.
"Regular Trustees" has the meaning set forth in Section 1.1 of
the Declaration.
"Reinvestment Criteria" has the meaning specified in Section
7.2(c) of this Agreement.
"S&P" means Standard & Poor's Ratings Services or any
successor thereof.
"Special Representative" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
"Tax Action" has the meaning set forth in Section 1.1 of the
Declaration.
"Tax Matters Partner" means the General Partner designated as
such in Section 11.10 of this Agreement.
"10% in Liquidation Preference" means Holder(s) of the
Partnership Preferred Securities voting together as a single class
representing 10% of the aggregate liquidation amount of the Partnership
Preferred Securities.
"Treasury Regulations" has the meaning set forth in Section
1.1 of the Declaration.
"Trust" means UDS Capital I, a Delaware business trust.
"Trust Common Securities" has the meaning specified in Section
8.1 of the Declaration.
"Trust Common Securities Guarantee" means the Trust Common
Securities Guarantee Agreement dated as of June 25, 1997, entered into
by the Company, as Guarantor, for the benefit of the holders of the
Trust Common Securities.
"Trust Preferred Securities" has the meaning specified in
Section 8.1 of the Declaration.
"Trust Preferred Securities Guarantee" means the Trust
Preferred Securities Guarantee Agreement dated as of June 25, 1997,
entered into by the Company, as Guarantor, for the benefit of the
holders of the Trust Preferred Securities.
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto
agree to continue the Partnership in accordance with the terms of this
Agreement. The General Partner, for itself and as agent for the Limited
Partners, shall make every reasonable effort to assure that all
certificates and documents are properly executed and shall accomplish
all filing, recording, publishing and other acts necessary or appropri-
ate for compliance with all the requirements for the continuation of the
Partnership as a limited partnership under the Act and under all other
laws of the State of Delaware or such other jurisdictions in which the
General Partner determines that the Partnership may conduct activities.
The rights and duties of the Partners shall be as provided herein and,
subject to the terms hereof, under the Act.
Section 2.2 NAME. The name of the Partnership is "UDS
Funding I, L.P.", as such name may be modified from time to time by the
General Partner following written notice to the Limited Partners.
Section 2.3 PURPOSES OF THE PARTNERSHIP. The purposes of the
Partnership are (a) to issue limited partnership interests in the
Partnership in the form of Partnership Preferred Securities, (b) to
receive the General Partner Capital Contribution, (c) to use substan-
tially all of the Initial Partnership Proceeds to purchase, as an
investment, the Initial Debentures, (d) to invest, at all times, an
amount equal to at least 1% of the Initial Partnership Proceeds in
Eligible Debt Securities, (e) to receive interest and other payments on
the Affiliate Investment Instruments and the Eligible Debt Securities
held by the Partnership from time to time, (f) to make Distributions on
the Partnership Preferred Securities and distributions on the General
Partner Interest if, as and when declared by the General Partner in its
sole discretion, (g) subject to the restrictions and conditions
contained in this Agreement, to make additional investments in Affiliate
Investment Instruments and Eligible Debt Securities and to dispose of
any such investments and (h) except as otherwise limited herein, to
enter into, make and perform all contracts and other undertakings, and
engage in those activities and transactions as the General Partner may
reasonably deem necessary or advisable for the carrying out of the fore-
going purposes of the Partnership. The Partnership may not engage in
any other activities or operations except as contemplated by the
preceding sentence.
Section 2.4 TERM. The term of the Partnership shall commence
upon the filing of the Certificate in the Office of the Secretary of
State of the State of Delaware and shall continue until the Partnership
is dissolved in accordance with the provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE. The Partnership's
registered agent and office in Delaware shall be CT Corporation,
Corporate Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
At any time, the General Partner may designate another registered agent
and/or registered office.
Section 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place
of activity of the Partnership shall be c/o Ultramar Diamond Shamrock
Corporation, 9830 Colonnade Boulevard, San Antonio, Texas 78230. Upon
ten days' written notice to the Partners, the General Partner may change
the location of the Partnership's principal place of activity, provided
that such change has no material adverse effect upon any Partner.
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name
and address of the General Partner are as follows:
Ultramar Diamond Shamrock Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230.
Attention: Treasurer
The General Partner may change its name or address from time to time, in
which event the General Partner shall promptly notify the Limited
Partners of any such change.
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General
Partner shall cause the Partnership to become qualified, formed or
registered under the applicable qualification, fictitious name or
similar laws of any jurisdiction in which the Partnership conducts
activities.
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED
SECURITIES; WITHDRAWAL OF INITIAL LIMITED PARTNER.
(a) Without execution of this Agreement, upon the receipt of
an L.P. Certificate by a Person, whether by purchase, gift, devise or
other valid transfer, which receipt shall be deemed to constitute a
request by such Person that the books and records of the Partnership
reflect such Person's admission as a Limited Partner, such Person shall
be admitted to the Partnership as a Limited Partner and shall become
bound by this Agreement.
(b) Following the first admission of a Partnership Preferred
Security Holder to the Partnership as a Limited Partner, the Initial
Limited Partner shall withdraw from the Partnership and shall receive
the return of its capital contribution without interest or deduction.
(c) The name and mailing address of each Partner and the
amount contributed by such Partner to the capital of the Partnership
shall be listed on the books and records of the Partnership. The
General Partner shall be required to update the books and records from
time to time as necessary to accurately reflect such information.
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) The General Partner has, prior to the date hereof,
contributed an aggregate of $15.00 to the capital of the Partnership,
which amount is equal to at least 15% of the total capital contributions
to the Partnership, after taking into account the contribution of the
Initial Limited Partner referred to in Section 3.1(b). Contemporaneous
with the issuance of the Partnership Preferred Securities, the General
Partner shall make the General Partner Capital Contribution. The Gener-
al Partner shall, from time to time, make such additional capital
contributions as are necessary to maintain at all times a positive
Capital Account balance equal to at least one percent (1%) of the
aggregate positive Capital Account balances of all Partners at the end
of such period.
(b) The Initial Limited Partner has, prior to the date
hereof, contributed the amount of $85.00 to the capital of the
Partnership, which amount shall be returned to the Initial Limited
Partner as contemplated by Section 2.9(b).
(c) On the Closing Date, the Trust shall, in exchange for a
definitive L.P. Certificate, contribute to the capital of the Partner-
ship on behalf of the Trust an amount in cash equal to the gross
proceeds from the sale of the Trust Preferred Securities and the Trust
Common Securities (such amount being a capital contribution to the
Partnership). On such date, immediately following the withdrawal of the
Initial Limited Partner, the Trust shall be the sole Limited Partner.
(d) No Limited Partner shall at any time be required to make
any additional capital contributions to the Partnership, except as may
be required by law.
Section 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES. A Partnership Pref-
erred Security Holder's Interest shall be represented by the Partnership
Preferred Securities held by or on behalf of such Partner. Each Part-
nership Preferred Security Holder's respective ownership of Partnership
Preferred Securities shall be set forth on the books and records of the
Partnership. Each Partner hereby agrees that its Interest in the
Partnership shall for all purposes be personal property. No Partner
shall have an interest in specific Partnership property.
Section 3.3 CAPITAL ACCOUNTS.
(a) Establishment and Maintenance of Capital Accounts. The
Partnership shall establish and maintain a separate account (the
"Capital Account") for each Partner. The initial balance of the Capital
Account for each Partner shall be the amount as set out opposite the
name of each of the Partners on Schedule 1 attached hereto. The Capital
Account of each Partner shall be increased by (i) the dollar amount of
any additional contributions made by such Partner and (ii) allocations
to such Partner of income and gain (including income exempt from tax).
The Capital Account of each Partner shall be decreased by (i) the dollar
amount of any distributions made to such Partner, and (ii) allocations
to such Partner of loss and deduction (including noncapital,
nondeductible expenditures not deductible in computing the Partnership's
income or loss for United States federal income tax purposes).
(b) Compliance with Regulations. Notwithstanding any other
provision of this Agreement to the contrary, the provisions of Sec-
tion 3.3(a) hereof regarding the maintenance of Capital Accounts shall
be construed so as to comply with the Treasury Regulations promulgated
under section 704 of the Code. The General Partner, in its sole discre-
tion, is authorized to modify such provisions to the minimum extent
necessary to comply with such Treasury Regulations.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. Except as
provided herein, no Partner shall be entitled to interest on or with
respect to any capital contribution to the Partnership.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS.
Subject to Section 3.1(b) hereof, no Partner shall be entitled to
withdraw any part of such Partner's capital contribution to the
Partnership. No Partner shall be entitled to receive any distributions
from the Partnership, except as provided in this Agreement.
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES. After giving effect to the
special allocation provisions set forth in Section 4.2 which special
allocations shall take precedence over any allocations made pursuant to
this Section 4.1,
(a) the Partnership's Net Income for each Fiscal Period of
the Partnership shall be allocated as follows:
(i) First, to each Holder of a Partnership Preferred Security
in an amount equal to the excess, if any, of (x) all Net Losses, if
any, allocated to each such Holder from the date of issuance of the
Partnership Preferred Security through and including the close of
such Fiscal Period pursuant to Section 4.1(b)(ii) below over (y)
the amount of Net Income, if any, allocated to each such Holder
pursuant to this Section 4.1(a)(i) in all prior Fiscal Periods.
(ii) Second, to the Holders of the Partnership Preferred
Securities, an amount of Net Income equal to the excess of (x) the
Distributions accumulated on the Partnership Preferred Securities
from the date of their issuance through and including the last day
of such Fiscal Period, including any Compounded Distributions pay
able with respect thereto, over (y) the amount of Net Income allo
cated to the Holders of the Partnership Preferred Securities pursu
ant to this Section 4.1(a)(ii) in all prior Fiscal Periods.
Amounts allocated to all Partnership Preferred Security Holders
shall be allocated among such Holders in proportion to the number
of Partnership Preferred Securities held by such Holders.
(iii) Any remaining Net Income shall be allocated to the
General Partner.
(b) The Partnership's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the General Partner until the balance of the
General Partner's Capital Account is reduced to zero, provided,
however, that the aggregate amount of Net Losses allocated to the
General Partner pursuant to this Section 4.1(b)(i) shall not exceed
the sum of 14% of the total capital contributions of all Partners
plus the aggregate Net Income allocated to the General Partner
pursuant to this Section 4.1.
(ii) Second, among the Holders in proportion to their respec
tive aggregate Capital Account balances, until the Capital Account
balances of such Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the
General Partner.
(c) DAILY DETERMINATION. For purposes of determining the
profits, losses or any other items allocable to any period, profits,
losses and any such other items shall be determined on a daily basis,
unless the General Partner determines that another method is permissible
under Section 704 of the Code and the Treasury Regulations promulgated
thereunder. Unless otherwise specified, such profits, losses or other
items shall be determined for each Fiscal Period.
Section 4.2 SPECIAL ALLOCATION.
(a) All expenditures that are (i) incurred by, or on behalf
of, the Partnership and (ii) paid, or otherwise reimbursed, by the
General Partner out of its own funds shall be allocated entirely to the
General Partner.
(b) In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of the
Partnership's income (including gross income) shall be specially allo-
cated to such Partner in a manner sufficient to eliminate the deficit,
if any, in the balance of the Capital Account of such Partner as quickly
as possible. The foregoing is intended to be a "qualified income
offset" provision as described in Treasury Regulation Section 1.704-1(b)(2)(ii)
(d) and shall be interpreted and applied in all respects in
accordance with such Treasury Regulation.
(c) SECTION 704 COMPLIANCE. The Partners intend that the
allocations under Section 4.1 conform to section 704 of the Code and the
Treasury Regulations promulgated thereunder and, to the extent necessary
due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes
are reasonably necessary to meet the requirements of such Treasury Regu-
lations.
(d) ADJUSTMENT OF ALLOCATIONS. If the allocations set forth
in this Article IV are adjusted by the Internal Revenue Service and the
Tax Matters Partner agrees to such adjustments, such allocations shall
be amended to the minimum extent necessary to conform with such adjust-
ments.
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing,
if, upon the final dissolution and termination of the Partnership and
after taking into account all allocations of Net Income and Net Losses
(and other tax items) under this Article IV, the distributions to be
made in accordance with the positive Capital Account balances would
result in a distribution that would be different from a distribution
under Article XIII, then gross items of income and gain (and other tax
items) for the taxable year of the final dissolution and termination
(and, to the extent permitted under section 761(c) of the Code, gross
items of income and gain, and other tax items, for the immediately pre-
ceding taxable year) shall be allocated to the Partners to increase or
decrease their respective Capital Account balances so that the final
distribution will occur in the same manner as a distribution under
Section 13.4.
(f) GENERAL PARTNER ALLOCATIONS. Notwithstanding any
provision of this Agreement to the contrary, the interest of the General
Partner in each item of Partnership income, gain, loss, deduction, or
credit shall, at all times during the existence of the Partnership, be
equal to at least (A) at any time that the aggregate capital
contributions to the Partnership are equal to or less than $50,000,000,
one percent (1%) of each such item and (B) at any time that the
aggregate capital contributions to the Partnership are greater than
$50,000,000, at least a percentage equal to the product of (i) one per-
cent (1%) and (ii) a fraction (not exceeding 1 and not less than 0.2),
the numerator of which is $50,000,000 and the denominator of which is
the lesser of (x) the aggregate Capital Account balances of the Capital
Accounts of all Partners at such time and (y) the aggregate capital con-
tributions to the Partnership of all Partners at such time.
Section 4.3 WITHHOLDING. The Partnership shall comply with
withholding requirements under Federal, state and local law and shall
remit amounts withheld to and file required forms with applicable
jurisdictions. To the extent that the Partnership is required to with-
hold and pay over any amounts to any authority with respect to
distributions or allocations to any Partner, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the
Partner. In the event of any claimed over-withholding, Partners shall
be limited to an action against the applicable jurisdiction. If the
amount withheld was not withheld from actual distributions, the
Partnership may reduce subsequent distributions by the amount of such
withholding. Each Partner agrees to furnish the Partnership with any
representations and forms as shall reasonably be requested by the -
Partnership to assist it in determining the extent of, and in fulfill-
ing, its withholding obligations.
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. Limited Partners shall receive
periodic Distributions and Compounded Distributions, if any, redemption
payments and liquidation distributions in accordance with the terms of
the Partnership Preferred Securities set forth in Article VI. The
General Partner shall in its sole discretion determine whether and when
Distributions shall be payable; provided, however, that if the General
Partner shall determine a Distribution will not be paid on a scheduled
Distribution Payment Date, the General Partner shall give notice of its
determination not to pay such Distribution to Limited Partners of record
as of the Record Date for the payment of such Distribution; provided,
further, however, that the General Partner shall not declare
distributions, and no distributions shall be payable by the Partnership
to the General Partner in respect of its General Partner Interest unless
all accumulated and unpaid Distributions, including any Compounded
Distributions, have been paid in full for all prior Fiscal Periods.
Subject to the immediately preceding sentence, to the extent that the
aggregate payments of interest (or dividends) received by the Partner-
ship in respect of Affiliate Investment Instruments and Eligible Debt
Securities for each Fiscal Period exceed the amount of Distributions,
including any Compounded Distributions, paid on the Partnership Pre-
ferred Securities for such Fiscal Period, the General Partner, in its
sole discretion may declare and distribute such excess funds to the
General Partner in respect of its General Partner Interest.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership
shall not make a Distribution to any Partner on account of such
Partner's Interest if such Distribution would violate Section 17-607 of
the Act or other applicable law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PRE-
FERRED SECURITIES.
(a) There is hereby authorized for issuance and sale
Partnership Preferred Securities having an aggregate liquidation
preference not greater than $206,186,000 and having the designation,
annual distribution rate, liquidation preference, redemption terms, and
other powers, preferences and special rights and limitations set forth
in this Article VI.
(b) The payment of Distributions (including payments of
distributions by the Partnership in liquidation or on redemption in
respect of Partnership Preferred Securities) shall be guaranteed by the
Company pursuant to and to the extent set forth in the Partnership
Guarantee. The Partnership Preferred Security Holders hereby authorize
the General Partner to hold the Guarantee on behalf of the Partnership
Preferred Security Holders. In the event of an appointment of a Special
Representative pursuant to Section 6.2(i), among other things, to en-
force the Partnership Guarantee, the Special Representative may take
possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee,
the General Partner has the right to enforce the Partnership Guarantee
on behalf of the Partnership Preferred Security Holders. The Partner-
ship Preferred Security Holders, by acceptance of such Partnership Pref-
erred Securities, acknowledge and agree to the subordination provisions
in, and other terms of, the Partnership Guarantee.
(c) The Partnership may not issue any interests in the
Partnership other than the Partnership Preferred Securities and the
General Partner Interest, provided that the Partnership may accept
consideration for additional capital contributions from the General
Partner with respect to the General Partner Interest. All Partnership
Preferred Securities shall rank senior to all other Interests in the
Partnership in respect of the right to receive Distributions. All Par-
tnership Preferred Securities redeemed, purchased or otherwise acquired
by the Partnership shall be canceled. The Partnership Preferred Securi-
ties will be issued in registered form only.
(d) No Holder shall be entitled as a matter of right to
subscribe for or purchase, or have any preemptive right with respect to,
any part of any new or additional limited partnership interests, or of
securities convertible into any Partnership Preferred Securities or
other limited partnership interests, whether now or hereafter authorized
and whether issued for cash or other consideration or by way of a
distribution.
(e) Any of the Partnership Preferred Securities that are
owned by the Company or by any entity directly or indirectly controlled
by, or under direct or indirect common control with, the Company, shall
not be entitled to vote or consent with respect to any Partnership Pre-
ferred Security owned by it, and shall, for purposes of such vote or
consent, be treated as if they were not outstanding except for
Partnership Preferred Securities purchased or acquired by the Company or
its affiliates in connection with transactions effected by or for the
account of customers of the Company or any of its subsidiaries or in
connection with the distribution or trading of such Partnership
Preferred Securities; provided, however, that persons (other than
affiliates of the Company) to whom the Company or any of its sub-
sidiaries have pledged Partnership Preferred Securities may vote or
consent with respect to such pledged Partnership Preferred Securities
under any of the circumstances described in Section 6.2.
Section 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) DESIGNATION. A total of 8,247,440 Partnership Preferred
Securities, liquidation preference $25 per Partnership Preferred
Security, are hereby designated as "8.32% Partnership Preferred Securi-
ties".
(b) DISTRIBUTIONS. (i) Partnership Preferred Security Hold-
ers shall be entitled to receive cumulative Distributions and Compounded
Distributions (as defined below) (if any), if, as and when declared by
the General Partner, in its sole discretion, out of the assets of the
Partnership legally available therefor, at a rate per annum of 8.32% of
the stated liquidation preference of $25 per Partnership Preferred Secu-
rity, calculated on the basis of a 360-day year consisting of twelve 30-day
months. For any period shorter than a full 90-day quarter, Dis-
tributions will be computed on the basis of the actual number of days
elapsed in such 90-day quarter. Such Distributions shall, from the date
of original issue, accumulate and be cumulative and shall be payable
quarterly, when, if, and as declared by the General Partner on the dates
specified in Section 6.2(b)(ii) below. Distributions and Compounded
Distributions (as defined below) (if any) on the Partnership Preferred
Securities shall be cumulative from the Closing Date. Distributions not
paid on the scheduled Distribution Payment Date will accumulate and com-
pound quarterly at the rate of 8.32% per annum ("Compounded Distribu-
tions"). In the event that any date on which Distributions are payable
on the Partnership Preferred Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Busi-
ness Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(ii) Distributions on the Partnership Preferred Securities
will be payable quarterly in arrears if, as and when, declared by the
General Partner on March 31, June 30, September 30 and December 31 of
each year, commencing on June 30, 1997 (each a "Distribution Payment
Date").
Distributions will be payable to the Holders as they appear on
the books and records of the Partnership on the relevant Record Date.
If the Trust or the Property Trustee is the Holder of the Partnership
Preferred Securities, all Distributions of cash shall be made by wire
transfer of same day funds to such Holder by 10:00 a.m., New York City
time, on the applicable Distribution Payment Date. Distributions pay-
able on any Partnership Preferred Securities that are not punctually
paid on any Distribution Payment Date will cease to be payable to the
Person in whose name such Partnership Preferred Securities are regis-
tered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securi-
ties are registered on the special record date or other specified date
for payment of such defaulted or accumulated Distribution.
(c) OPTIONAL REDEMPTION. Partnership Preferred Securities
shall be redeemable at the option of the General Partner, in whole or in
part, from time to time, on or after June 30, 2002, upon not less than
30 nor more than 60 days notice, at an amount per Partnership Preferred
Securities equal to $25 plus accumulated and unpaid Distributions
thereon, including any Compounded Distributions (the "Redemption
Price"). The Partnership may not redeem the Partnership Preferred
Securities in part unless all accumulated and unpaid Distributions, in-
cluding any Compounded Distributions, have been paid in full on all
Partnership Preferred Securities for all Fiscal Periods terminating on
or prior to the date of redemption. If a partial redemption of the
Partnership Preferred Securities would result in the delisting of the
Trust Preferred Securities (or, if the Trust is liquidated in connection
with a Trust Special Event, or if a partial redemption would result in
the delisting of the Partnership Preferred Securities), the Partnership
may only redeem the Partnership Preferred Securities in whole but not in
part.
(d) SPECIAL EVENT REDEMPTIONS. (i) If, at any time, a Part-
nership Special Event shall occur and be continuing, the General Partner
shall, within 90 days following the occurrence of such Partnership
Special Event, elect to either (i) redeem the Partnership Preferred
Securities in whole (but not in part), upon not less than 30 or more
than 60 days notice at the Redemption Price, provided that if at the
time there is available to the Partnership the opportunity to eliminate,
within such 90-day period, the Partnership Special Event by taking some
ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that in the sole judgment
of the General Partner has or will cause no adverse effect on the
Partnership, the Trust, or the Company, the General Partner will pursue
such measure in lieu of redemption; or (ii) cause the Partnership Pre-
ferred Securities to remain outstanding, provided that in the case of
this clause (ii), the General Partner shall pay any and all costs and
expenses incurred by or payable by the Partnership which are attrib-
utable to the Partnership Special Event.
(e) REDEMPTION PROCEDURES. (i) Notice of any redemption of
Partnership Preferred Securities (a "Redemption Notice") will be given
by the Partnership by mail to each Holder of Partnership Preferred
Securities to be redeemed not fewer than 30 nor more than 60 days before
the date fixed for redemption. For purposes of the calculation of the
date of redemption and the dates on which notices are given pursuant to
this Section 6.2(e)(i), a Redemption Notice shall be deemed to be given
on the day such notice is first mailed, by first-class mail, postage
prepaid, to Holders of Partnership Preferred Securities. Each Redemp-
tion Notice shall be addressed to the Holders of Partnership Preferred
Securities at the address of each such Holder appearing in the books and
records of the Partnership. No defect in the Redemption Notice or in
the mailing thereof with respect to any Holder shall affect the validity
of the redemption proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Partnership Preferred Securities are to be redeemed, the Partnership
Preferred Securities to be redeemed shall be redeemed pro rata provided,
that, in the event Partnership Preferred Securities are held in book-entry only
form by DTC or its nominee (or any successor Clearing Agency
or its nominee), DTC will reduce, in accordance with DTC's customary
procedures, the amount of the interest of each Clearing Agency Partic-
ipant in the Partnership Preferred Securities to be redeemed; provided,
that if, as a result of such pro rata redemption, Holders would hold
fractional interests in the Partnership Preferred Securities, the
General Partner may adjust the amount of the interest of each Holder to
be redeemed to avoid such fractional interests.
(iii) If the Partnership gives a Redemption Notice (which
notice will be irrevocable), then by 12:00 noon, New York City time, on
the redemption date, the Partnership (A) if the Partnership Preferred
Securities are in book-entry only form with DTC, will deposit irrevoca-
bly with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemp-
tion Price in respect of the Partnership Preferred Securities held
through DTC in global form or (B) if the Partnership Preferred Securi-
ties are held in certificated form, will deposit with the Paying Agent,
funds sufficient to pay the applicable Redemption Price of the amount of
any such Partnership Preferred Securities and will give to the Paying
Agent irrevocable instructions and authority to pay such amounts to the
Holders of Partnership Preferred Securities, upon surrender of their
certificates, by check, mailed to the address of the relevant Holder ap-
pearing on the books and records of the Partnership on the redemption
date; provided, however, that for so long as the Trust or the Property
Trustee of the Trust shall hold the Partnership Preferred Securities,
payment of cash shall be made by wire in same day funds to the Holder by
10:00 a.m., New York City time, on the redemption date. For these pur-
poses, the applicable Redemption Price shall not include Distributions
which are being paid to Holders who were Holders on a relevant record
date. Upon satisfaction of the foregoing conditions, then immediately
prior to the close of business on the date of such deposit or payment,
all rights of Holders of such Partnership Preferred Securities so called
for redemption will cease, except the right of the Holders to receive
the Redemption Price, but without interest on such Redemption Price, and
from and after the date fixed for redemption, such Partnership Preferred
Securities will not accumulate Distributions or bear interest.
In the event that any date fixed for redemption of Partnership
Preferred Securities is not a Business Day, then payment of the Redemp-
tion Price payable on such date will be made on the next succeeding
Business Day (and without any interest in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day in each
case, with the same force and effect as if made on such date fixed for
redemption. In the event that payment of the Redemption Price is
improperly withheld or refused and not paid by either the Partnership or
the Company pursuant to the Partnership Guarantee, Distributions on the
Partnership Preferred Securities called for Redemption will continue to
accumulate, to the extent that payment of such interest is legally
available, from the original redemption date until the Redemption Price
is actually paid.
The Partnership shall not be required to register or cause to
be registered the transfer of any Partnership Preferred Securities which
have been called for redemption.
(f) COMPANY PURCHASES. Subject to the provisions of this
Section 6.2 and applicable law (including, without limitation, Federal
securities laws), if Partnership Preferred Securities have been
distributed to the Holders (as defined in the Declaration) of Trust Pre-
ferred Securities, the Company or any of its subsidiaries may at any
time and from time to time purchase outstanding Partnership Preferred
Securities by tender, in the open market, or by private agreement.
(g) LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event
of any voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Partnership, the Holders of Partnership Preferred
Securities at the time outstanding will be entitled to receive out of
the assets of the Partnership such amount as is determined in accordance
with Section 13.4 (the "Partnership Liquidation Distribution") payable
in cash.
(h) VOTING RIGHTS.
(i) SPECIAL REPRESENTATIVE. (1) If one or more of the
following events shall occur and be continuing (each a "Partnership En-
forcement Event"): (i) arrearages on distributions on the Partnership
Preferred Securities shall exist for six consecutive quarterly
distribution periods, (ii) the Company is in default on any of its
obligations under the Partnership Guarantee or (iii) an Investment Event
of Default on any Affiliate Investment Instrument or a default under any
Investment Guarantee, as the case may be, occurs and is continuing then
the Property Trustee, for so long as the Partnership Preferred
Securities are held by the Property Trustee, will have the right, or the
Holders of the Partnership Preferred Securities, upon the affirmative
vote of at least a Majority in Liquidation Preference of the Partnership
Preferred Securities, shall have the right, to the exclusion of the
General Partner, (a) to appoint and authorize a special representative
of the Partnership and the Limited Partners (a "Special Representative")
to enforce (1) to the maximum extent permitted by applicable law, the
Partnership's creditors' rights and other rights with respect to the
Affiliate Investment Instruments and the Investment Guarantees, (2) the
rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee, and (3) the rights of the Holders of the Part-
nership Preferred Securities to receive Distributions (only if, and to
the extent, declared by the General Partner, in its sole discretion, out
of funds legally available therefor) on the Partnership Preferred Secu-
rities, and (b) under the Partnership Guarantee to enforce the terms of
the Partnership Guarantee, including the right to enforce the covenant
restricting certain payments of the Company and Finance Subsidiaries.
Under no circumstances, however, shall the Special Representative have
authority to cause the General Partner to declare Distributions on the
Partnership Preferred Securities nor to have any authority concerning
the selection of Partnership Investments. When the Special Representa-
tive acts to enforce the Partnership's creditors' rights and other
rights with respect to the Affiliate Investment Instruments and the
Investment Guarantees, the Special Representative acts as an agent of
the Partnership. When the Special Representative acts to enforce the
rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee or their rights to receive Distributions on the
Partnership Preferred Securities, the Special Representative acts as an
agent of the Holders of the Partnership Preferred Securities. In addi-
tion, the Special Representative shall not, by virtue of acting in such
capacity, be admitted as a general or limited partner in the Partnership
or otherwise be deemed to be a general or limited partner in the Part-
nership and shall have no liability for the debts, obligations, or
liabilities of the Partnership.
(2) In furtherance of the foregoing, and without limiting the
powers of any Special Representative so appointed and to avoid any doubt
concerning the powers of the Special Representative, any Special Repre-
sentative, in its own name, in the name of the Partnership, in the name
of the Limited Partners, or otherwise, may institute, or cause to be
instituted, a proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or administrative proceeding,
to enforce on behalf of the Partnership the Partnership's rights di-
rectly against the Company or any other obligor in connection with its
obligations to the Partnership, and may prosecute such proceeding to
judgment or final decree, and enforce the same against the Company or
any other obligor in connection with such obligations and collect, out
of the property, wherever situated, of the Company or any such other
obligor upon such obligations, the monies adjudged or decreed to be
payable in the manner provided by law. The General Partner agrees to
execute and deliver such documents as may be necessary, appropriate or
convenient for the Special Representative to enforce the foregoing
rights and obligations on behalf and in the name of the Partnership.
(3) If the Special Representative fails to enforce its
rights under the Affiliate Investment Instruments after a holder of
Partnership Preferred Securities has made a written request, such holder
of record of Partnership Preferred Securities may to the fullest extent
permitted by law directly institute a legal proceeding against the
Company to enforce the rights of the Special Representative and the
Partnership under the Affiliate Investment Instruments without first
instituting any legal proceeding against the Special Representative, the
Partnership or any other person or entity. In any event, if a Partner-
ship Enforcement Event has occurred and is continuing and such event is
attributable to the failure of an Investment Affiliate to make any
required payment when due on any Affiliate Investment Instrument, then a
holder of Partnership Preferred Securities may to the fullest extent
permitted by law on behalf of the Partnership directly institute a pro-
ceeding against such Investment Affiliate with respect to such Affiliate
Investment Instrument for enforcement of payment. In addition, the
Partnership acknowledges that, for so long as the Trust holds any
Partnership Preferred Securities, if the Special Representative fails to
enforce its rights on behalf of the Partnership under the Affiliate
Investment Instruments after a holder of Trust Securities has made a
written request, a holder of record of Trust Securities may to the
fullest extent permitted by law on behalf of the Partnership directly
institute a legal proceeding against the Investment Affiliates under the
Affiliate Investment Instruments, without first instituting any legal
proceeding against the Property Trustee, the Trust, the Special
Representative or the Partnership. In any event, for so long as the
Trust is the holder of any Partnership Preferred Securities, if a Trust
Enforcement Event has occurred and is continuing and such event is
attributable to the failure of an Investment Affiliate to make any
required payment when due on any Affiliate Investment Instrument or the
failure of the Company to make any required payment when due on any
Investment Guarantee, then the Partnership acknowledges that a holder of
Trust Securities may to the fullest extent permitted by law on behalf of
the Partnership directly institute a proceeding against such Investment
Affiliate with respect to such Affiliate Investment Instrument or
against the Company with respect to any such Investment Guarantee, in
each case for enforcement of payment. Under no circumstances shall the
Special Representative, any holder of Partnership Preferred Securities
or any holder of Trust Preferred Securities have authority to cause the
General Partner to declare distributions on the Partnership Preferred
Securities.
(4) For purposes of determining whether the Partnership has
deferred payment of Distributions for six (6) consecutive quarters,
Distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Distributions,
including Compounded Distributions, have been or contemporaneously are
paid with respect to all quarterly Distribution periods terminating on
or prior to the date of payment of such full cumulative Distributions.
Not later than 30 days after such right to appoint a Special Repre-
sentative arises, the General Partner will convene a meeting for
election of a Special Representative. If the General Partner fails to
convene such meeting within such 30-day period, the Holders of not less
than 10% in Liquidation Preference of the Outstanding Partnership Pre-
ferred Securities will be entitled to convene such meeting. The provi-
sions of Section 14.3 relating to the convening and conduct of meetings
of the Partners will apply with respect to any such meeting. In the
event that, at any such meeting, Holders of less than a Majority in
Liquidation Preference of Partnership Preferred Securities entitled to
vote for the appointment of a Special Representative vote for such
appointment, no Special Representative shall be appointed. Any Special
Representative appointed shall cease to be a Special Representative of
the Partnership and/or the Limited Partners if (x) the Partnership (or
the Company pursuant to the Partnership Guarantee) shall have paid in
full all accumulated and unpaid Distributions on the Partnership Pre-
ferred Securities, (y) the relevant Investment Event of Default shall
have been cured, and (z) the Company is in compliance with all its
obligations under the Partnership Guarantee, and the Company, in its
capacity as the General Partner, shall continue the activities of the
Partnership without dissolution. Notwithstanding the appointment of any
such Special Representative, the Company shall continue as General
Partner and shall retain all rights under this Agreement, including the
right to determine whether to declare, in its sole discretion, the pay-
ment of Distributions on the Partnership Preferred Securities.
(ii) CERTAIN AMENDMENTS; WAIVER. (1) If any proposed
amendment of this Agreement provides for, or the General Partner
otherwise proposes to effect, (x) any action that would adversely affect
the powers, preferences or special rights of the Holders of the Partner-
ship Preferred Securities, whether by way of amendment of this Agreement
or otherwise (including, without limitation, the authorization or
issuance of any limited partnership interests in the Partnership
ranking, as to participation in profits or distributions, or in the
assets of the Partnership, senior to the Partnership Preferred Securi-
ties); or (y) the dissolution, winding-up or termination of the
Partnership, other than (1) in connection with the occurrence of a
Partnership Special Event or (2) as described under Sections 11.11 and
13.2 of this Agreement, then the Holders of outstanding Partnership
Preferred Securities will be entitled to vote on such amendment or
proposal of the General Partner (but not on any other amendment or
proposal) as a class and such amendment or proposal shall not be effec-
tive except with the approval of Holders of a Majority in Liquidation
Preference of such outstanding Partnership Preferred Securities having a
right to vote on the matter; provided, however, that if the Property
Trustee on behalf of the Trust is the Holder of the Partnership
Preferred Securities, any such amendment or proposal not excepted by (1)
or (2) above shall not be effective without the prior or concurrent
approval of the Holders of a majority in liquidation preference of the
outstanding Trust Preferred Securities having a right to vote on such
matters; provided, further, that no such approval shall be required if
the dissolution, winding-up or termination of the Partnership is
proposed or initiated upon the initiation of proceedings, or after
proceedings have been initiated, for the dissolution, winding-up,
liquidation or termination of the Company.
(2) The Holders of a Majority in Liquidation Preference of
Partnership Preferred Securities may, by vote, on behalf of the Holders
of all of the Partnership Preferred Securities, waive any past Partner-
ship Enforcement Event with respect to the Partnership Preferred Securi-
ties and its consequences; provided, that if the underlying Investment
Event of Default:
(A) is not waivable under the related Affiliate Investment Instru
ment, such Partnership Enforcement Event shall also not be
waivable; or
(B) requires the consent or vote of the Holders of greater than a
majority in principal amount or liquidation preference of the
Affiliate Investment Instruments (a "Super Majority") to be
waived under the related Affiliate Investment Instrument, the
Partnership Enforcement Event may only be waived by the vote
of the Holders of the relevant Super Majority in liquidation
preference of the Partnership Preferred Securities.
Upon such waiver, any such Partnership Enforcement Event shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other
Partnership Enforcement Event or impair any right consequent thereon.
(3) A waiver of an Investment Event of Default by the Special
Representative, acting at the direction of the Holders of the Partner-
ship Preferred Securities, constitutes a waiver of the corresponding
Partnership Enforcement Event.
(iii) GENERAL VOTING. (1) The General Partner shall not (i)
direct the time, method and place of conducting any proceeding for any
remedy available, (ii) waive any Investment Event of Default that is
waivable under the Affiliate Investment Instruments, (iii) exercise any
right to rescind or annul a declaration that the principal of any
Affiliate Investment Instruments that are debt instruments shall be due
and payable, (iv) waive the breach of the covenant by the Company in the
Partnership Guarantee to restrict certain payments by the Company, or
(v) consent to any amendment, modification or termination of any Affili-
ate Investment Instrument, where such consent shall be required from the
investor, without, in each case, obtaining the prior approval of the
Holders of at least a Majority in Liquidation Preference of the Part-
nership Preferred Securities; provided, however, that if the Property
Trustee on behalf of the Trust is the Holder of the Partnership
Preferred Securities, such waiver, consent or amendment or other action
shall not be effective without the prior or concurrent approval of at
least a majority in liquidation amount of the outstanding Trust Pre-
ferred Securities having a right to vote on such matters. The General
Partner shall not revoke any action previously authorized or approved by
a vote of the Holders of the Partnership Preferred Securities without
the approval of a Majority in Liquidation Preference of the Partnership
Preferred Securities. The General Partner shall notify all Holders of
the Partnership Preferred Securities of any notice of an Investment
Event of Default received with respect to any Affiliate Investment
Instrument.
(2) Any required approval of Holders of Partnership Preferred
Securities may be given at a separate meeting of such Holders convened
for such purpose or pursuant to written consent. The General Partner
will cause a notice of any meeting at which Holders of Partnership
Preferred Securities are entitled to vote, or of any matter upon which
the action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Partnership Preferred Securities.
Each such notice will include a statement setting forth (x) the date of
such meeting or the date by which such action is to be taken, (y) a
description of any matter proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matters upon which written
consent is sought and (z) instructions for the delivery of proxies or
consents. No vote or consent of the Holders of Partnership Preferred
Securities will be required for the Partnership to redeem and cancel
Partnership Preferred Securities in accordance with this Agreement.
(3) Notwithstanding that Holders of Partnership Preferred
Securities are entitled to vote or consent under any of the
circumstances described above, any of the Partnership Preferred
Securities at such time that are beneficially owned by the Company or by
any entity directly or indirectly controlled by, or under direct or
indirect common control with, the Company, shall not be entitled to vote
or consent and shall, for purposes of such vote or consent, be treated
as if they were not outstanding, except for Partnership Preferred
Securities purchased or acquired by the Company or its affiliates in
connection with transactions effected by or for the account of customers
of the Company or any of its subsidiaries or in connection with the dis-
tribution or trading of such Partnership Preferred Securities; provided,
however, that persons (other than affiliates of the Company) to whom the
Company or any of its subsidiaries have pledged Partnership Preferred
Securities may vote or consent with respect to such pledged Partnership
Preferred Securities pursuant to the terms of such pledge.
(4) Holders of the Partnership Preferred Securities shall
have no rights to remove or replace the General Partner.
(5) Holders of Partnership Preferred Securities shall have no
preemptive rights.
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS.
(a) All Partnership funds will be invested in the securities
of Investment Affiliates (the "Affiliate Investment Instruments") and
Eligible Debt Securities. No more than 99% of the Initial Partnership
Proceeds will be used by the Partnership to purchase the Initial Deben-
tures meeting the criteria set forth in this Section 7.1. The remaining
funds from the Initial Partnership Proceeds will be used to purchase
Eligible Debt Securities in accordance with the terms of this Agreement.
(b) The Partnership shall apply approximately 99% of the Ini-
tial Partnership Proceeds to purchase (1) a debt instrument of the
Company (the "Initial Company Debenture") and (2) debt instruments of
one or more eligible controlled affiliates of the Company (such debt in-
struments collectively referred to as the "Initial Affiliate Deben-
tures"). The Initial Company Debenture and the Initial Affiliate Deben-
tures are collectively referred to as the "Initial Debentures". The
Initial Affiliate Debentures may each contain a provision that allows an
affiliate of the issuer of such Debenture to assume the obligations of
such issuer subject to certain conditions. The Partnership may purchase
the Initial Debentures only upon receipt of an opinion of the Inde-
pendent Financial Advisor to the effect that (i) if such Initial
Debentures were to be rated, at least one Rating Agency would rate all
the Initial Debentures investment grade at the time such Initial
Debentures are purchased by the Partnership, (ii) the Company and each
Investment Affiliate which is a subsidiary of the Company would have
been capable of issuing and selling debt instruments with the same terms
and conditions as the applicable Initial Debentures to unrelated third
party investors, (iii) the terms and conditions of the Initial
Debentures are consistent with the terms and conditions of a public
offering or a private placement pursuant to Rule 144A under the
Securities Act of 1933 of such Initial Debentures and are no more favor-
able to the relevant Investment Affiliate than could have been obtained
by such Investment Affiliate from unrelated third party investors
pursuant to such a public offering or private placement of such Initial
Debentures. On the Closing Date, the Partnership shall invest at least
1% of such Initial Partnership Proceeds in Eligible Debt Securities.
The terms of the Initial Debentures will be as set forth in the
Indentures attached hereto as Exhibits A and B.
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE
PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal
to at least 1% of the Initial Partnership Proceeds in Eligible Debt
Securities.
(b) The Partnership may reinvest any payments it receives in
respect of its investments in (i) Eligible Debt Securities without
limitation or (ii) additional Affiliate Investment Instruments but only
upon (A) the acceptance of a written offer setting forth the terms and
conditions on which an Investment Affiliate would be willing to issue an
Affiliate Investment Instrument to the Partnership (an "Investment
Offer") and (B) the receipt of an opinion of the Independent Financial
Advisor that the terms of such Affiliate Investment Instrument set forth
in such Investment Offer satisfy the Reinvestment Criteria (as defined
below).
(c) If the Independent Financial Advisor determines that the
terms of an Affiliate Investment Instrument (as set forth in the Invest-
ment Offer) do not satisfy the Reinvestment Criteria, the Partnership
shall be prohibited from making any investment in such Affiliate Invest-
ment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the
following criteria (the "Reinvestment Criteria"): (i) the economic terms
of each Affiliate Investment Instrument shall be no less favorable to
the Partnership than terms that would otherwise be obtainable through a
public offering or private placement under Rule 144A of the Securities
Act of 1933 of securities by the requesting Investment Affiliate and the
other terms and conditions of each Affiliate Reinvestment Instrument are
substantially similar to the terms and conditions of similar securities
and guarantees, if any, included therein, that are offered to the public
in a public offering or private placement under Rule 144A of the Securi-
ties Act of 1933 of such securities; (ii) the Partnership shall not have
held any Affiliate Investment Instruments of the Investment Affiliate
submitting the Investment Offer within the three-year period ending on
the date of the Investment Offer; (iii) there shall not have been a de-
fault on any debt obligation of the Investment Affiliate submitting the
Investment Offer that was owned by the Partnership; (iv) no dividend ar-
rearages shall have existed on any preferred stock of the Investment
Affiliate submitting the Investment Offer which was owned by the Part-
nership; and (v) the Investment Affiliate submitting the Investment
Offer shall not be deemed to be an investment company by reason of Sec-
tion 3(a) or 3(b) of the 1940 Act or is otherwise an eligible recipient
of funds directly or indirectly from the Trust pursuant to an order
issued by the Securities and Exchange Commission.
(e) Any payments received by the Partnership in respect of
its investments that are not invested in additional Affiliate Investment
Instruments, may be reinvested only in Eligible Debt Securities (subject
to restrictions of applicable law, including the 1940 Act).
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the
Partnership shall be kept by the General Partner, in which shall be
entered fully and accurately all transactions and other matters relative
to the Partnership's investments. The books and records of the Partner-
ship, together with a certified copy of this Agreement and of the
Certificate, shall at all times be maintained at the principal office of
the General Partner and shall be open to the inspection and examination
of the Partners or their duly authorized representatives for any proper
purpose reasonably related to its Interest during reasonable business
hours.
(b) Notwithstanding any other provision of this Agreement to
the contrary, the General Partner may, to the maximum extent permitted
by applicable law, keep confidential from the Partners any information
with respect to the Partnership, the disclosure of which the General
Partner reasonably believes is not in the best interests of the Partner-
ship, or is adverse to the interests of the Partnership, or which the
Partnership or the General Partner is required by law or by an agreement
with any Person to keep confidential.
(c) (i) For so long as the Partnership Preferred Securities
are held by the Property Trustee on behalf of the Trust, within one
month after the close of each Fiscal Year, the General Partner shall
transmit to each Partner a statement indicating such Partner's share of
each item of Partnership income, gain, loss, deduction or credit, for
United States federal income tax purposes, for such Fiscal Year.
(ii) In the event that the Partnership Preferred Securities
are no longer held by the Property Trustee on behalf of the Trust, as
soon as reasonably possible after the close of the Fiscal Year, the
General Partner shall transmit to each Partner the statement referred to
in Section 8.1(c)(i) hereof.
Section 8.2 ACCOUNTING METHOD. For both financial and tax
reporting purposes, the books and records of the Partnership shall be
kept on the accrual method of accounting applied on a consistent basis
and shall reflect all Partnership transactions.
Section 8.3 ANNUAL AUDIT. As soon as practical after the end
of each Fiscal Year, but not later than 90 days after such end, the
financial statements of the Partnership shall be audited by a firm of
independent certified public accountants selected by the General Partner
in accordance with applicable law. The cost of such audits will be an
expense of the Partnership and shall be paid by the General Partner.
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES.
Since the Trust is being formed solely to facilitate a direct investment
in the Partnership Preferred Securities, the Partnership hereby agrees,
at any time while the Property Trustee is the Holder of any Partnership
Preferred Securities, to pay all the expenses of the Trust, including,
but not limited to, any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on the
Trust by the United States, or any other domestic taxing authority, so
that the net amounts received and retained by the Trust and the Property
Trustee after paying such expenses will be equal to the amounts the
Trust and the Property Trustee would have received had no such costs or
expenses been incurred by or imposed on the Trust. The General Partner
shall be liable for, and shall pay all such expenses solely out of its
own funds. In addition, if the Partnership is required to pay any
taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any
other domestic taxing authority, then, in any case, the General Partner
will pay such taxes, duties, assessments or other governmental charges
out of its own funds.
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In con-
nection with the offering, sale and issuance of the Partnership
Preferred Securities by the Partnership, the General Partner shall:
(a) pay all costs and expenses of the Partnership (including,
but not limited to, costs and expenses relating to the organization of
the Partnership, the offering, sale and issuance of the Partnership Pre-
ferred Securities (including commissions to the underwriters in connec-
tion therewith) the fees and expenses of the Special Representatives (if
any), and the costs and expenses relating to the operation of the
Partnership, including, without limitation, costs and expenses of ac-
countants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and tele-
phone and other telecommunications expenses; and
(b) be primarily and fully liable for any indemnification
obligations arising with respect to this Agreement.
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS. The Limited Partners shall not
participate in the management or control of the Partnership's investment
activity, property or other assets, nor shall the Limited Partners
engage in any activities for the Partnership, nor shall the Limited
Partners have the power to act for or bind the Partnership, such powers
being vested solely and exclusively in the General Partner (and, upon
appointment, and to the extent set forth herein, the Special Representa-
tive). The Limited Partners shall have such rights as are set forth
herein and in the Partnership Guarantee. The Limited Partners shall
have no interest in the properties or assets of the General Partner, or
any equity therein, or in any proceeds of any sales thereof (which sales
shall not be restricted in any respect), by virtue of acquiring or
owning an Interest in the Partnership.
Section 10.2 LIABILITY. Subject to the provisions of the
Act, no Limited Partner shall be liable for the repayment, satisfaction
or discharge of any debts or other obligations of the Partnership in
excess of the Capital Account balance of such Limited Partner.
Section 10.3 PRIORITY. No Limited Partner shall have
priority over any other Limited Partner as to Partnership allocations or
distributions.
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY. Subject to the provisions of Section
6.2(h)(i) with respect to the Special Representative, the General
Partner shall have exclusive and complete authority and discretion to
manage the operations and affairs of the Partnership and to make all
decisions regarding the investment activity of the Partnership. Any
action taken by the General Partner shall constitute the act of and
serve to bind the Partnership. In dealing with the General Partner
acting on behalf of the Partnership no Person shall be required to
inquire into the authority of the General Partner to bind the Partnersh-
ip. Persons dealing with the Partnership are entitled to rely conclu-
sively on the power and authority of the General Partner as set forth in
this Agreement.
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER. (a)
Subject to the provisions of Section 6.2(h)(i) with respect to the Spe-
cial Representative, the General Partner shall have all rights and
powers of a general partner under the Act, and shall have all authority,
rights and powers in the management of the Partnership's investment
activity to do any and all other acts and things necessary, proper,
convenient or advisable to effectuate the purposes of this Agreement,
including by way of illustration but not by way of limitation, the
following:
(i) to secure the necessary goods and services required in
performing the General Partner's duties for the Partnership;
(ii) to exercise all powers of the Partnership, on behalf of
the Partnership, in connection with enforcing the Partnership's
rights under the Affiliate Investment Instruments and the Partner
ship Guarantee;
(iii) to issue Partnership Preferred Securities and to admit
Limited Partners in connection therewith in accordance with this
Agreement;
(iv) to act as registrar and transfer agent for the Partner
ship Preferred Securities or designate an entity to act as regis
trar and transfer agent;
(v) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including with respect to Distributions and voting rights and to
make determinations as to the payment of Distributions, and make or
cause to be made all other required payments to Holders of the
Partnership Preferred Securities and to the General Partner;
(vi) to open, maintain and close bank accounts and to draw
checks and other orders for the payment of money;
(vii) to bring or defend, pay, collect, compromise, arbi
trate, resort to legal action, or otherwise adjust claims or
demands of or against the Partnership;
(viii) to deposit, withdraw, invest, pay, retain and dis
tribute the Partnership's funds in a manner consistent with the
provisions of this Agreement;
(ix) to take all action that may be necessary or appropri
ate for the preservation and the continuation of the Partnership's
valid existence, rights, franchises and privileges as a limited
partnership under the laws of the State of Delaware and of each
other jurisdiction in which such existence is necessary to protect
the limited liability of the Limited Partners or to enable the
Partnership to invest in the Affiliate Investment Instruments and
Eligible Debt Securities;
(x) to take all action not inconsistent with applicable
law, the Certificate or this Agreement, that the General Partner
or, upon appointment pursuant to Section 6.2(h)(i), the Special
Representative determines in its sole discretion to be necessary or
desirable to ensure, as long as such action does not adversely
affect the interests of the Partnership Preferred Security Holders,
or cause (i) the Partnership to be deemed to be an "investment
company" required to be registered under the 1940 Act, (ii) any
Initial Debenture (or any subsequent Affiliate Investment Instru
ment that is intended to be classified as debt) to not be treated
as indebtedness for United States federal income tax purposes, or
(iii) the Partnership to be treated as an association, or as a
publicly traded partnership, taxable as a corporation;
(xi) to cause the Partnership to enter into and perform the
Purchase Agreement and the Partnership Preferred Securities Pur
chase Agreement and to purchase Eligible Debt Securities and Affil
iate Investment Instruments, as the case may be, without any fur
ther act, vote or approval of any Partner; and
(xii) to execute and deliver any and all documents or
instruments, perform all duties and powers and do all things for
and on behalf of the Partnership in all matters necessary or
desirable or incidental to the foregoing.
(b) For so long as any Partnership Preferred Securities
remain outstanding, the General Partner covenants and agrees (i) subject
to Section 12.1(b) hereof, to remain the sole general partner of the
Partnership and to maintain directly 100% ownership of the General
Partner's interest in the Partnership, which interest will at all times
represent at least 1% of the total capital of the Partnership, (ii) to
cause the Partnership to remain a limited partnership and not to
voluntarily dissolve, liquidate, wind-up or be terminated, except as
permitted by the Limited Partnership Agreement and (iii) to use its
commercially reasonable efforts to ensure that the Partnership will not
be (A) an "investment company" for purposes of the 1940 Act or (B) an
association or a publicly traded partnership taxable as a corporation
for United States federal income tax purposes.
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL
PARTNER. The General Partner hereby assumes and shall be liable for
the debts, obligations and liabilities of the Partnership, including,
but not limited to, any liabilities arising under the Securities Act or
the Exchange Act and all costs and expenses relating to the investment
by the Partnership in any Affiliate Investment Instruments (but not any
losses related to any non-payment with respect to such investments), and
agrees to pay to each Person to whom the Partnership is now or hereafter
becomes indebted or liable (the "Beneficiaries"), whether such indebted-
ness, obligations or liabilities arise in contract, tort or otherwise
(excluding payment obligations of the Company to Holders of the
Partnership Preferred Securities in such Holders' capacities as Holders
of such Partnership Preferred Securities, such obligations being sepa-
rately guaranteed under the Partnership Guarantee), the full payment of
such indebtedness and any and all liabilities, when and as due. This
Agreement is intended to be for the benefit of and to be enforceable by
all such Beneficiaries whether or not such Beneficiaries have received
notice hereof.
(b) The General Partner agrees to pay and be responsible for:
(i) all costs and expenses of the Partnership including,
but not limited to, costs and expenses relating to the organization of
the Partnership, the offering, sale and issuance of Partnership Pre-
ferred Securities, the costs and expenses relating to the operation of
the Partnership (including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agents, duplicating, travel and tele-
phone and other telecommunications expenses) and costs and expenses
incurred in connection with the acquisition, financing, and disposition
of the Partnership's assets; and
(ii) any and all taxes (other than Federal, state and
local withholding taxes) and all liabilities, costs and expenses with
respect to such taxes of the Partnership.
Section 11.4 LIABILITY. Except as expressly set forth in
this Agreement or in the Guarantee Agreements, (a) the General Partner
shall not be personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Limited Partners;
(b) the return of such capital contributions (or any return thereon)
shall be made solely from assets of the Partnership; and (c) the General
Partner shall not be required to pay to the Partnership or to any
Limited Partner any deficit in any Limited Partner's Capital Account
upon dissolution, winding up or otherwise. Other than as expressly pro-
vided in this Agreement or under the Act, no Limited Partner shall have
the right to demand or receive property other than cash for its re-
spective Interest in the Partnership. The General Partner shall be
liable to an unlimited extent for the debts and other obligations of the
Partnership.
Section 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate
thereof may engage in or possess an interest in other ventures of any
nature or description, independently or with others, similar or
dissimilar to the activities of the Partnership, and the Partnership and
the Partners shall have no rights by virtue of this Agreement in and to
such independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the
activities of the Partnership, shall not be deemed wrongful or improper.
No Partner or Affiliate thereof shall be obligated to present any par-
ticular investment opportunity to the Partnership even if such
opportunity is of a character that, if presented to the Partnership,
could be taken by the Partnership, and any Partner or Affiliate thereof
shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular
investment opportunity.
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything
in this Agreement to the contrary notwithstanding, the General Partner
shall not cause or permit the Partnership to:
(i) acquire any assets other than as expressly provided
herein;
(ii) do any act which would make it impractical or impossible
to carry on the ordinary activity of the Partnership as set forth
in Section 2.3;
(iii) possess Partnership property for other than a Partner
ship purpose;
(iv) admit a Person as a Partner, except as expressly pro
vided in this Agreement;
(v) make any advances of funds to the General Partner or its
Affiliates, other than such as represented by the Affiliate Invest
ment Instruments;
(vi) perform any act that would subject any Limited Partner
to liability as a general partner in any jurisdiction;
(vii) engage in any activity that is not consistent with the
purposes of the Partnership, as set forth in Section 2.3;
(viii) without the written consent of the Holders of 66-2/3%
in liquidation preference of the Partnership Preferred Securities,
have an order for relief entered with respect to the Partnership or
commence a voluntary case under any applicable bankruptcy, insol
vency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a substantial
part of the Partnership's property, or make any assignment for the
benefit of creditors of the Partnership; or
(ix) borrow money or become liable for the borrowings of any
third party or to engage in any financial or other trade or busi
ness.
Section 11.7 EXCULPATION. (a) No Partnership Indemnified
Person shall be liable, responsible or accountable in damages or
otherwise to the Partnership or any Partnership Covered Person for any
loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good
faith on behalf of the Partnership and in a manner such Partnership
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Partnership Indemnified Person by this
Agreement or by law, except that a Partnership Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such
Partnership Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
(b) A Partnership Indemnified Person shall be fully protected
in relying in good faith upon the records of the Partnership and upon
such information, opinions, reports or statements presented to the
Partnership by any Person as to matters the Partnership 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 Partnership, 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 Partners
might properly be paid.
Section 11.8 FIDUCIARY DUTY. (a) To the extent that, at law
or in equity, a Partnership Indemnified Person has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or
to any other Partnership Covered Person, a Partnership Indemnified
Person acting under this Agreement shall not be liable to the Partner-
ship or to any other Partnership Covered Person for its good faith
reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities
of a Partnership Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties
and liabilities of such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever
a conflict of interest exists or arises between Partnership Covered
Persons, or (ii) whether this Agreement or any other agreement
contemplated herein or therein provides that a Partnership Indemnified
Person shall act in a manner that is, or provides terms that are, fair
and reasonable to the Partnership or any Partner, the Partnership
Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Partnership Indemnified
Person, the resolution, action or term so made, taken or provided by the
Partnership Indemnified Person shall not constitute a breach of this
Agreement or any other agreement contemplated herein or of any duty or
obligation of the Partnership Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Agreement a Partnership Indemnified
Person is permitted or required to make a decision (i) in its
"discretion" or under a grant of similar authority, the Partnership
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interest, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Partnership or any other Person, or (ii) in its
"good faith" or under another express standard, the Partnership
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this Agreement
or by applicable law.
Section 11.9 INDEMNIFICATION. (a) To the fullest extent
permitted by applicable law, the Partnership shall indemnify and hold
harmless each Partnership Indemnified Person from and against any loss,
damage or claim incurred by such Partnership Indemnified Person by
reason of any act or omission performed or omitted by such Partnership
Indemnified Person in good faith on behalf of the Partnership and in a
manner such Partnership Indemnified Person reasonably believed to be
within the scope of authority conferred on such Partnership Indemnified
Person by this Agreement, except that no Partnership Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Partnership Indemnified Person by reason of gross
negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 11.9 shall be
provided out of and to the extent of Partnership assets only, and no
Partnership Covered Person shall have any personal liability on account
thereof.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Partnership Indemnified
Person in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding upon
receipt by the Partnership of an undertaking by or on behalf of the
Partnership Indemnified Person to repay such amount if it shall be
determined that the Partnership Indemnified Person is not entitled to be
indemnified as authorized in Section 11.9(a).
Section 11.10 TAX MATTERS
(a) For purposes of section 6231(a)(7) of the Code, the "Tax
Matters Partner" shall be the Company as long as it remains the general
partner of the Partnership. The Tax Matters Partner shall keep the
Limited Partners fully informed of any inquiry, examination or pro-
ceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on
behalf of the Partnership, shall make an election under section 754 of
the Code.
(c) The General Partner and the Partnership Preferred
Security Holders acknowledge that they intend, for United States federal
income tax purposes, that the Partnership shall be treated as a
"partnership" (other than a publicly traded partnership taxable as a
corporation) and that the General Partner and the Partnership Preferred
Security Holders shall be treated as "partners" of the Partnership.
(d) The General Partner shall retain, at the expense of the
Partnership and at its sole discretion, a nationally recognized firm of
certified public accountants which shall prepare all United States
federal, state, local or other tax and information returns of the Part-
nership, as required by law, and the Schedule K-1's or any successor or
similar forms or schedules.
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS. The
Partnership may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except
as permitted pursuant to this Section 11.11. The Partnership may, with-
out the consent of the Holders of the Partnership Preferred Securities,
consolidate, amalgamate, merge with or into, or be replaced by a limited
partnership, limited liability company or trust organized as such under
the laws of any state of the United States of America, provided that (i)
such successor entity either (x) expressly assumes all of the
obligations of the Partnership under the Partnership Preferred Securi-
ties or (y) substitutes for the Partnership Preferred Securities other
securities having substantially the same terms as the Partnership
Preferred Securities (the "Partnership Successor Securities") so long as
the Partnership Successor Securities are not junior to any other equity
securities of the successor entity, with respect to participation in the
profits and distributions, and in the assets, of the successor entity,
(ii) the Investment Affiliates expressly acknowledge such successor
entity as the holder of the Affiliate Investment Instruments, (iii) the
Partnership Preferred Securities continue to be or any Partnership
Successor Securities are or will be listed, upon notification of issu-
ance, on any national securities exchange or other organization on which
the Partnership Preferred Securities, if so listed, are then listed,
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Trust Preferred Securities (or, in the event that the Trust is
liquidated in connection with a Trust Special Event, the Partnership
Preferred Securities (including any Partnership Successor Securities))
to be downgraded by any nationally recognized statistical securities
rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the powers, preferences and other
special rights of the holders of the Trust Preferred Securities or the
Holders of the Partnership Preferred Securities (including any Partner-
ship Successor Securities)) in any material respect (other than, in the
case of the Partnership Preferred Securities, with respect to any
dilution of the Holders' interest in the new resulting entity), (vi)
such successor entity has a purpose substantially identical to that of
the Partnership, (vii) prior to such merger, consolidation, amalgamation
or replacement, the Company has received an opinion of nationally
recognized independent counsel to the Partnership experienced in such
matters to the effect that (A) such successor entity will be treated as
a "partnership" for United States federal income tax purposes and not as
an association or a publicly traded partnership taxable as a
corporation, (B) such merger, consolidation, amalgamation or replacement
will not cause the Trust to be classified as an association or a public-
ly traded partnership taxable as a corporation for United States federal
income tax purposes, (C) following such merger, consolidation, amal-
gamation or replacement, the Company and such successor entity will be
in compliance with the 1940 Act without registering thereunder as an
investment company, and (D) such merger, consolidation, amalgamation or
replacement will not adversely affect the limited liability of the
Holders of the Partnership Preferred Securities and (viii) the Company
guarantees the obligations of such successor entity under the Partner-
ship Successor Securities at least to the extent provided by the
Partnership Guarantee.
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be freely
transferable by a Holder.
(b) Except as provided in the next sentence, the General
Partner may not assign or transfer its Interest in the Partnership in
whole or in part unless, prior to such assignment or transfer, the
General Partner has obtained the consent of the Holders of not less than
66-2/3% in Liquidation Preference of the Partnership Preferred
Securities. The General Partner may assign or transfer its Interest in
the Partnership without such consent to an entity that is the survivor
of a merger or consolidation of the General Partner in a transaction
that meets the requirements of Section 11.11 and only if prior to such
assignment or transfer the Company has received an opinion of nationally
recognized independent tax counsel to the Partnership experienced in
such matters to the effect that after such assignment or transfer the
Partnership will continue to be treated as a partnership for United
States federal income tax purposes and will not be treated as an
association or a publicly traded partnership taxable as a corporation.
The General Partner may transfer its Interest to a wholly-owned direct
or indirect subsidiary of the Company provided that (i) such entity
expressly accepts such transfer of the obligations as General Partner
and (ii) prior to such transfer, the Company has received an opinion of
nationally recognized independent counsel to the Partnership experienced
in such matters to the effect that (A) the Partnership will be treated
as a partnership for United States federal income tax purposes, (B) such
transfer would not cause the Trust to be classified as an association
taxable as a corporation for United States federal income tax purposes,
(C) following such transfer, the Company and such successor entity will
be in compliance with the 1940 Act without registering thereunder as an
investment company, and (D) such transfer will not adversely affect the
limited liability of the holders of the Partnership Preferred
Securities. "Permitted Successor" shall mean an entity that is an
assignee or transferee of the Interest of the General Partner as
permitted by this Section 12.1(b). The admission of a Permitted
Successor as a general partner of the Partnership shall be effective
upon the filing of an amendment to the Certificate with the Secretary of
State of the State of Delaware which indicates that the Permitted
Successor has been admitted as a general partner of the Partnership. If
the General Partner assigns its entire Interest, the General Partner
shall cease to be a general partner of the Partnership simultaneously
with the admission of the Permitted Successor as a general partner of
the Partnership. Any such Permitted Successor is hereby authorized to
and shall continue the business of the Partnership without dissolution.
(c) Except as provided above, no Interest shall be
transferred, in whole or in part, except in accordance with the terms
and conditions set forth in this Agreement. Any transfer or purported
transfer of any Interest not made in accordance with this Agreement
shall be null and void.
Section 12.2 TRANSFER OF L.P. CERTIFICATES. The General
Partner shall provide for the registration of L.P. Certificates and of
transfers of L.P. Certificates. Upon surrender for registration of
transfer of any L.P. Certificate, the General Partner shall cause one or
more new L.P. Certificates to be issued in the name of the designated
transferee or transferees. Every L.P. Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the General Partner duly executed by
the Partnership Preferred Security Holder or his or her attorney duly
authorized in writing. Each L.P. Certificate surrendered for registra-
tion of transfer shall be cancelled by the General Partner. A
transferee of an L.P. Certificate shall be admitted to the Partnership
as a Limited Partner, shall become bound by this Agreement and shall be
entitled to the rights and subject to the obligations of a Partnership
Preferred Security Holder hereunder upon the receipt by the transferee
of an L.P. Certificate, which receipt shall be deemed to constitute a
request by such transferee that the books and records of the Partnership
reflect such transferee's admission as a limited partner. The transfer-
or of an L.P. Certificate, in whole, shall cease to be a Limited Partner
at the time that the transferee of such L.P. Certificate is admitted to
the Partnership as a Limited Partner in accordance with this Section
12.2.
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED
PARTNERSHIP PREFERRED SECURITY HOLDERS. (a) DEFINITIVE L.P.
CERTIFICATES. Unless and until the Partnership issues a global L.P.
Certificate pursuant to Section 12.4(a), the Partnership shall only
issue definitive L.P. Certificates to the Partnership Preferred Security
Holders. (b) The Partnership may treat the Person in whose name any
L.P. Certificate shall be registered on the books and records of the
Partnership as the sole holder of such L.P. Certificate and of the
Partnership Preferred Securities represented by such L.P. Certificate
for purposes of receiving Distributions and for all other purposes what-
soever (including without limitation, tax returns and information
reports) and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such L.P. Certificate or in the
Partnership Preferred Securities represented by such L.P. Certificate on
the part of any other Person, whether or not the Partnership shall have
actual or other notice thereof.
Section 12.4 BOOK ENTRY PROVISIONS.
(a) General. The provisions of this Section 12.4 shall apply
only in the event that the Partnership Preferred Securities are
distributed to the Holders of Trust Securities in connection with the
involuntary or voluntary dissolution, winding up or liquidation of the
Trust as a result of the occurrence of a Trust Special Event. Upon the
occurrence of such event, a global L.P. Certificate representing the
Book-Entry Interests shall be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Partnership and any previously issued
and still outstanding definitive L.P. Certificates shall be of no
further force and effect. The global L.P. Certificate shall initially
be registered on the books and records of the Partnership in the name of
Cede & Co., the nominee of DTC, and no Holder of a Partnership Preferred
Security will receive a new definitive L.P. Certificate representing
such Holder's interests in such L.P. Certificate, except as provided in
Section 12.4(c). In connection with the involuntary or voluntary
dissolution, winding up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event, Cede & Co., the nominee of DTC,
shall automatically be admitted to the Partnership as a Limited Partner.
Receipt of the global L.P. Certificate shall be deemed to constitute a
request by Cede & Co., the nominee of DTC, that the books and records of
the Partnership reflect its admission as a Limited Partner. Unless and
until new definitive, fully registered L.P. Certificates (the "Defin-
itive L.P. Certificates") have been issued to the Partnership Preferred
Security Owners pursuant to Section 12.4(c):
(i) The provisions of this Section shall be in full force and
effect;
(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including the payment of
Distributions, Redemption Price and liquidation proceeds on the
L.P. Certificates and receiving approvals, votes or consents
hereunder) as the Partnership Preferred Security Holder and the
sole holder of the L.P. Certificates and shall have no obligation
to the Partnership Preferred Security Owners;
(iii) None of the Partnership, the Trust, the General Part
ner, any Special Representative or any agents of any of the forego
ing shall have any liability or responsibility for any aspect of
the records relating to or payments made on account of beneficial
ownership interests in a global L.P. Certificate for such benefi
cial ownership interests or for maintaining, supervising or review
ing any records relating to such beneficial ownership interests;
and
(iv) Except as provided in Section 12.4(c) below, the Part
nership Preferred Security Owners will not be entitled to receive
physical delivery of the Partnership Preferred Securities in defin
itive form and will not be considered Holders thereof for any
purpose under this Agreement, and no global L.P. Certificate
representing Partnership Preferred Securities shall be exchange
able, except for another global L.P. Certificate of like denomina
tion and tenor to be registered in the name of DTC or Cede & Co.,
or to a successor Depositary or its nominee. Accordingly, each
Partnership Preferred Security Owner must rely on the procedures of
DTC or if such person is not a Participant, on the procedures of
the Participant through which such person owns its interest to
exercise any rights of a Holder under the Agreement.
(b) NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Partnership Preferred Security Holders is required
under this Agreement, unless and until Definitive L.P. Certificates
shall have been issued to the Partnership Preferred Security Owners
pursuant to Section 12.4(c), the General Partner and any Special
Representative shall give all such notices and communications specified
herein to be given to the Partnership Preferred Security Holders to the
Clearing Agency, and shall have no obligations to the Partnership
Preferred Security Owners.
(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P.
Certificates shall be prepared by the Partnership and exchangeable for
the global L.P. Certificate or L.P. Certificates if and only if (i) the
Depositary notifies the Company that it is unwilling or unable to
continue its services as a securities depositary and no successor
depositary shall have been appointed, (ii) the Depositary, at any time,
ceases to be a clearing agency registered under the Exchange Act at such
time as the Depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed, or
(iii) the Company, in its sole discretion, determines that such global
L.P. Certificate shall be so exchangeable. Upon surrender of the global
L.P. Certificate or L.P. Certificates representing the Book-Entry
Interests by the Clearing Agency, accompanied by registration instruc-
tions, the General Partner shall cause Definitive L.P. Certificates to
be delivered to Partnership Preferred Security Owners in accordance with
the instructions of the Clearing Agency. Neither the General Partner
nor the Partnership shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Any Person receiving a Definitive L.P.
Certificate in accordance with this Section 12.4 shall be admitted to
the Partnership as a Limited Partner upon receipt of such Definitive
L.P. Certificate and shall be registered on the books and records of the
Partnership as a Partnership Preferred Security Holder. The Clearing
Agency or the nominee of the Clearing Agency, as the case may be, shall
cease to be a Limited Partner under this Section 12.4(c) at the time
that at least one additional Person is admitted to the Partnership as a
Limited Partner in accordance herewith. The Definitive L.P. Certifi-
cates shall be printed, lithographed or engraved or may be produced in
any other manner as may be required by any national securities exchange
on which Partnership Preferred Securities may be listed and is reason-
ably acceptable to the General Partner, as evidenced by its execution
thereof.
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent
and Paying Agent for the Partnership Preferred Securities for so long as
the Partnership Preferred Securities are held by the Trust or, if the
Trust is liquidated in connection with a Trust Special Event, for so
long as the Partnership Preferred Securities remain in book-entry only
form.
(b) Except in such case where the General Partner shall act
as Registrar or Paying Agent pursuant to Section 12.5(a) hereof, the -
Partnership shall maintain in the Borough of Manhattan, City of New
York, State of New York (i) an office or agency where Partnership Pre-
ferred Securities may be presented for registration of transfer or for
exchange ("Registrar") and (ii) an office or agency where Partnership
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Partnership Preferred Securities
and of their transfer and exchange. The Partnership may appoint the
Registrar and the Paying Agent and may appoint one or more co-registrars
and one or more additional paying agents in such other locations as it
shall determine. The term "Paying Agent" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails
to appoint or maintain another entity as Registrar or Paying Agent, the
General Partner shall act as such.
(c) Registration of transfers of Partnership Preferred
Securities shall be effected without charge by or on behalf of the
Partnership, but upon payment (with the giving of such indemnity as the
Partnership or the General Partner may require) in respect of any tax or
other governmental charges that may be imposed.
(d) The Partnership will not be required to register or cause
to be registered the transfer of Partnership Preferred Securities after
such Partnership Preferred Securities have been called for redemption.
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS. The General Partner
shall not at any time retire or withdraw from the Partnership except as
otherwise permitted hereunder. If the General Partner retires or
withdraws in contravention of this Section 13.1, it shall indemnify,
defend and hold harmless the Partnership and the other Partners from and
against any losses, expenses, judgments, fines, settlements or damages
suffered or incurred by the Partnership or such other Partners arising
out of or resulting from such retirement or withdrawal.
Section 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission
of Partners in accordance with the terms of this Agreement. The death,
withdrawal, bankruptcy or dissolution of a Limited Partner, or the
occurrence of any other event which terminates the Interest of a Limited
Partner in the Partnership, shall not, in and of itself, cause the Part-
nership to be dissolved and its affairs wound up. To the fullest extent
permitted by applicable law, upon the occurrence of any such event, the
General Partner may, without any further act, vote on approval of any
Partner, admit any Person to the Partnership as an additional or
substitute limited partner in the Partnership, which admission shall be
effective as of the date of the occurrence of such event, and the busi-
ness of the Partnership shall be continued without dissolution.
(b) The Partnership shall be dissolved and its affairs shall
be wound up upon the earliest to occur of any of the following events:
(i) upon the bankruptcy or insolvency of the General Partner;
(ii) upon the assignment by the General Partner of its entire
interest in the Partnership when the assignee is not admitted to
the Partnership as a general partner of the Partnership in accor
dance with this Agreement, or the filing of a certificate of
dissolution or its equivalent with respect to the General Partner,
or the revocation of the General Partner's charter and the expira
tion of 90 days after the date of notice to the General Partner of
revocation without a reinstatement of its charter, or if any other
event occurs that causes the General Partner to cease to be a
general partner of the Partnership under the Delaware Partnership
Act, unless the business of the Partnership is continued in accor
dance with the Delaware Partnership Act;
(iii) the Partnership has redeemed or otherwise purchased all
of the Partnership Preferred Securities;
(iv) upon the entry of a decree of judicial dissolution under
Section 17-802 of the Act; or
(v) the written consent of all Partners.
(c) Upon dissolution of the Partnership, the Liquidator shall
promptly notify the Partners of such dissolution.
Section 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for
any reason, the General Partner (or, if the Partnership is dissolved
pursuant to Section 13.2(b)(i) or (ii), then a liquidating agent
appointed by Holders of not less than 66 2/3% in Liquidation Preference
of the Partnership Preferred Securities (the General Partner or such
Person so appointed is hereinafter referred to as the "Liquidator"))
shall commence to wind up the affairs of the Partnership and to
liquidate the Partnership's assets; provided, however, that a reasonable
time shall be allowed for the orderly liquidation of the assets of the
Partnership and the satisfaction of liabilities to creditors so as to
enable the Partners to minimize the normal losses attendant upon
liquidation. The Partners shall continue to share all income, losses
and distributions during the period of liquidation in accordance with
Articles IV and V. Subject to the provisions of this Article XIII, the
Liquidator shall have full right and unlimited discretion to determine
the time, manner and terms of any sale or sales of Partnership property
pursuant to such liquidation, giving due regard to the activity and
condition of the relevant market and general financial and economic
conditions.
(b) The Liquidator shall have all of the rights and powers
with respect to the assets and liabilities of the Partnership in
connection with the liquidation and termination of the Partnership that
the General Partner would have with respect to the assets and liabil-
ities of the Partnership during the term of the Partnership, and the
Liquidator is hereby expressly authorized and empowered to execute any
and all documents necessary or desirable to effectuate the liquidation
and termination of the Partnership and the transfer of any assets.
(c) Notwithstanding the foregoing, a Liquidator that is not a
General Partner shall not, by virtue of acting in such capacity, be
deemed a Partner in this Partnership and shall not have any of the
economic interests in the Partnership of a Partner; and such Liquidator
may be compensated for its services to the Partnership at normal
customary and competitive rates for its services to the Partnership as
reasonably determined by all the Limited Partners.
Section 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of
liquidation shall be applied in the following order of priority (and
without regard to the non-mandatory provisions of Section 17-804 of the
Act):
(i) first, to creditors of the Partnership, including Part
ners who are creditors, to the extent otherwise permitted by law,
in satisfaction of the liabilities of the Partnership (whether by
payment or the making of reasonable provisions for payment
thereof), other than liabilities for distributions (including Dist
ributions) to Partners;
(ii) second, following any allocations required under Section
4.2(e) of the Agreement, to the Limited Partners, an amount equal
to the aggregate liquidation preference of their Partnership Pre
ferred Securities, plus the amount of Distributions (including any
Compounded Distributions) that are accumulated and unpaid as of the
date of such liquidating distribution; and
(iii) thereafter, to the General Partner.
Section 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited
Partner shall look solely to the assets of the Partnership for all
distributions with respect to the Partnership and such Partner's capital
contribution (including returns thereof), and such Partner's share of
profits or losses thereof, and shall have no recourse therefor (upon
dissolution or otherwise) against the General Partner, except under the
Partnership Guarantee. No Partner shall have any right to demand or
receive property other than cash upon dissolution and termination of the
Partnership.
Section 13.6 TERMINATION. The Partnership shall terminate
when all of the assets of the Partnership shall have been disposed of
and the assets shall have been distributed as provided in Section 13.4
and the Liquidator has executed and caused to be filed a certificate of
cancellation of the Partnership.
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS. Except as provided by Section
3.3(b) and Section 6.2(i), this Agreement may be amended by, and only
by, a written instrument executed by the General Partner without the
consent of any Limited Partner; provided, however, that no amendment
shall be made, and any such purported amendment shall be void and inef-
fective, to the extent the result thereof would be to (A) cause the
Partnership to be treated for United States federal income tax purposes
as an association or a publicly traded partnership taxable as a corpora-
tion, (B) require the Partnership to register under the 1940 Act or (C)
materially adversely affect the rights, privileges or preferences of the
Partnership Preferred Securities. Notwithstanding any provision to the
contrary, in the event of (i) a liquidation of the Trust for any reason
or (ii) any other distribution which effectively causes Partnership Pre-
ferred Securities to be distributed to Holders of Trust Preferred
Securities, the General Partner may amend this Agreement without the
consent of the Limited Partners to provide for (A) orderly dissemina-
tion, purchase, sale, exchange and replacement of such Partnership Pre-
ferred Securities, (B) all other matters to the extent required by or
desirable under then applicable law and (C) such other matters
reasonably incidental or related thereto; provided, however, that no
such amendment may materially adversely affect the rights, privileges,
or preferences of the Partnership Preferred Securities without the
consent of a majority in interest of the Partners so effected.
Section 14.2 AMENDMENT OF CERTIFICATE. In the event this
Agreement shall be amended pursuant to Section 14.1, the General Partner
shall amend the Certificate to reflect such change if it deems such
amendment of the Certificate to be necessary or appropriate.
Section 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be
called at any time by the General Partner to consider and act on any
matter on which Limited Partners are entitled to act under the terms of
this Agreement or the Act. The General Partner shall call a meeting of
Holders if directed to do so by Holders of no less than 10% in
Liquidation Preference as permitted by this Agreement. Such direction
shall be given by delivering to the General Partner a request in writing
stating that the signing Limited Partners desire to call a meeting and
indicating the general or specific purpose for which the meeting is to
be called. Any Limited Partners calling a meeting shall specify in
writing the L.P. Certificates held by the Limited Partners exercising
the right to call a meeting and only those specified Interests shall be
counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met. Except to
the extent otherwise provided in this Agreement, the following
provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited
Partners having a right to vote thereat not less than seven Business
Days nor more than 60 days prior to the date of such meeting. Each such
notice shall set forth the date, time and place of the meeting, a
description of any matter on which Holders are entitled to vote and
instructions for the delivery of proxies or written consents.
(c) Any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by Limited Partners owning not less
than the minimum Interests that would be necessary to authorize or take
such action at a meeting in which all Limited Partners having a right to
vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Limited Partners entitled
to vote who have not consented in writing. The General Partner may
provide that any written ballot submitted to the Limited Partners for
the purpose of taking any action without a meeting shall be returned to
the Partnership within a specified time.
(d) Each Partner may authorize any Person to act for it by
proxy on all matters as to which a Partner is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Partner or its attorney-in-fact. No
proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Partner executing it. Except
as otherwise provided herein, or pursuant to Section 14.3(f), all
matters relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Partnership were a Delaware corporation and the Limited Partners were
stockholders of a Delaware corporation.
(e) Each meeting of Partners shall be conducted by the
General Partner or by such other Person that the General Partner may
designate.
(f) The General Partner may establish all other reasonable
procedures relating to meetings of Limited Partners or the giving of
written consents, in addition to those expressly provided, including
notice of time, place or purpose of any meeting at which any matter is
to be voted on by any Partners, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XV
MISCELLANEOUS
Section 15.1 NOTICES. All notices provided for in this
Agreement shall be in writing, and shall be delivered or mailed by first
class or registered or certified mail or, with respect to the
Partnership and General Partner, telecopied, as follows:
(a) if given to the Partnership, in care of the General
Partner at the Partnership's mailing address set forth below:
Ultramar Diamond Shamrock Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer
(b) if given to the General Partner, at its mailing address
set forth below:
Ultramar Diamond Shamrock Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer
(c) if given to any other Partner at the address set forth on
the books and records of the Partnership.
Section 15.2 POWER OF ATTORNEY. Each Holder of a Partnership
Preferred Security does hereby constitute and appoint the General Part-
ner, and if applicable, any Special Representative appointed pursuant to
Section 6.2(h)(i) of this Agreement, as its true and lawful represen-
tative and attorney-in-fact, in its name, place and stead to make,
execute, sign, deliver and file (a) any amendment of the Certificate
required because of an amendment of this Agreement or in order to effect
any change in the Partnership, (b) this Agreement, (c) any amendments to
this Agreement and (d) all such other instruments, documents and
certificates which from time to time may be required by the laws of the
United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, to effec-
tuate, implement and continue the valid and subsisting existence of the
Partnership or to dissolve the Partnership for any other purpose consis-
tent with this Agreement and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the subsequent
death, incapacity, disability, dissolution, termination, or bankruptcy
of the Holder granting the same or the transfer of all or any portion of
such Holder's Interest and (b) extend to such Holder's successors,
assigns and legal representatives.
Section 15.3 ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement among the parties. It supersedes any prior
agreement or understandings among them, and it may not be modified or
amended in any manner other than as set forth herein.
Section 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL
BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
Section 15.5 EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit
of the parties and their legal representatives, successors and assigns.
Section 15.6 PRONOUNS AND NUMBER. Wherever from the context
it appears appropriate, each term stated in either the singular or the
plural shall include the singular and the plural, and pronouns stated in
either the masculine, feminine or neuter shall include the masculine,
feminine and neuter.
Section 15.7 CAPTIONS. Captions, headings, and subheadings
contained in this Agreement are included for convenience and
identification purposes only and in no way define, limit or extend the
scope or intent of this Agreement or any provision herein.
Section 15.8 PARTIAL ENFORCEABILITY. If any provision of
this Agreement, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Agreement, or
the application of such provision to persons or circumstances other than
those to which it is held invalid, shall not be affected thereby.
Section 15.9 COUNTERPARTS. This Agreement may contain more
than one counterpart of the signature page and this Agreement may be
executed by the affixing of the signature of each of the Partners to one
of such counterpart signature pages. All of such counterpart signature
pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature
page.
Section 15.10 WAIVER OF PARTITION. Each Partner hereby
irrevocably waives any and all rights (if any) that such Partner may
have to maintain any action for partition of any of the Partnership's
property.
Section 15.11 REMEDIES. The failure of any party to seek
redress for violation of, or to insist upon the strict performance of,
any provision of this Agreement shall not prevent a subsequent act,
which would have originally constituted a violation, from having the
effect of an original violation. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by
any party shall not preclude or waive its right to use any or all other
remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
GENERAL PARTNER:
ULTRAMAR DIAMOND SHAMROCK
CORPORATION,
a Delaware corporation
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
INITIAL LIMITED PARTNER:
Steve Blank
By: /s/ STEVE BLANK
Name: Steve Blank
SCHEDULE 1
Initial Capital
Account Balance
Partner at June 25, 1997
Ultramar Diamond Shamrock Corporation $36,386,000
UDS Capital I 206,186,000
<PAGE>
ANNEX A
FORM OF L.P. CERTIFICATE
[IF THE PARTNERSHIP PREFERRED SECURITY IS TO BE A GLOBAL
CERTIFICATE INSERT: This Partnership Preferred Security is a Global Cer-
tificate within the meaning of the Partnership Agreement hereinafter re-
ferred to and is registered in the name of The Depository Trust Company
(the "Depositary") or a nominee of the Depositary. This Partnership
Preferred Security is exchangeable for Partnership Preferred Securities
registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Partnership
Agreement and no transfer of this Partnership Preferred Security (other
than a transfer of this Partnership Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depos-
itary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Partnership Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water
Street, New York, New York), a New York corporation, to the Partnership
or its agent for registration of transfer, exchange or payment, and any
Partnership Preferred Security issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of
the Depositary and any payment hereon is made to Cede & Co. or such
other entity as is requested by an authorized representative of the
Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHER-
WISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
<PAGE/>
<PAGE>
PP-1 Aggregate Liquidation
Preference: $206,186,000
Certificate Evidencing Partnership Preferred Securities
of
UDS FUNDING I, L.P.
8.32% Partnership Preferred Securities
(liquidation preference $25 per Partnership Preferred Security)
UDS FUNDING I, L.P., a limited partnership formed under the
laws of the State of Delaware (the "Partnership"), hereby certifies that
The Bank of New York, a property trustee pursuant to the Amended and Re-
stated Declaration of Trust of UDS Capital I, dated as of June 25, 1997
(the "Holder") is the registered owner of 8,247,440 preferred securities
of the Partnership representing limited partner interests in the
Partnership designated the 8.32% Partnership Preferred Securities (liq-
uidation preference $25 per Partnership Preferred Security) (the "Part-
nership Preferred Securities"). The Partnership Preferred Securities
are freely transferable on the books and records of the Partnership, in
person or by a duly authorized attorney, upon surrender of this certifi-
cate duly endorsed and in proper form for transfer. The designation,
rights, powers, privileges, restrictions, preferences and other terms
and provisions of the Partnership Preferred Securities represented
hereby are set forth in, issued under and shall in all respects be
subject to the provisions of the Amended and Restated Agreement of
Limited Partnership dated as of June 25, 1997, as the same may be
amended from time to time (the "Partnership Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in
the Partnership Agreement. The Holder is entitled to the benefits of
the Partnership Guarantee to the extent provided therein. The
Partnership will provide a copy of the Partnership Agreement and the
Partnership Guarantee to a Holder without charge upon written request to
the Partnership at its principal place of business.
Upon receipt of this certificate, the Holder is admitted to
the Partnership as a Limited Partner, is bound by the Partnership Agree-
ment and is entitled to the benefits thereunder. Each Holder of a
Partnership Preferred Security, by acceptance of this Certificate and
each Certificate owner, by acquisition of a beneficial interest in a
Certificate, agrees to treat the Debentures, and any other Affiliate
Investment Instruments that are treated as debt instruments by the
relevant Investment Affiliate and by the Partnership, as indebtedness
for United States federal income tax purposes.
IN WITNESS WHEREOF, the Partnership has executed this certif-
icate this 25th day of June, 1997.
UDS FUNDING I, L.P.
By: ULTRAMAR DIAMOND SHAMROCK CORPORATION,
as General Partner
By:
Name:
Title:
(See reverse for additional terms)
<PAGE/>
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of 8.32% of the stated liquidation
preference of $25 per Partnership Preferred Security. Distributions not
paid on the scheduled payment date will accumulate and compound quar-
terly (to the extent permitted by applicable law) at the rate of 8.32%
per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with
any such Compounded Distributions. Distributions on the Partnership
Preferred Securities will only be made to the extent that the Part-
nership has funds legally available for the payment of such distribu-
tions. Amounts available to the Partnership for Distribution to the
holders of the Partnership Preferred Securities will be limited to pay-
ments received by the Partnership from the Company and certain wholly
owned subsidiaries on the Initial Debentures and Affiliate Investment
Instruments or from the Company on the Partnership Guarantee or on the
Eligible Debt Securities. Distributions on the Partnership Preferred
Securities will be paid only if, as and when declared in the sole
discretion of the Company, as the General Partner of the Partnership.
The amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in
a 90-day quarter.
Except as otherwise described herein, Distributions on the
Partnership Preferred Securities will be cumulative, will accumulate
from the date of initial issuance and will be payable quarterly in
arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on June 30, 1997, if, as and when declared by the
General Partner in its sole discretion. If the Trust Preferred Securi-
ties (or, if the Trust is liquidated, the Partnership Preferred Securi-
ties) are in book-entry-only form, Distributions will be payable to the
Holders of record of Partnership Preferred Securities as they appear on
the books and records of the Partnership on the relevant record dates,
which will be one Business Day prior to the relevant payment dates. If
the Trust or the Property Trustee is the Holder of the Partnership Pre-
ferred Securities, all Distributions of cash shall be made by wire
transfer of same day funds to such Holder by 10:00 a.m., New York City
time, on the applicable Distribution Payment Date. Distributions pay-
able on any Partnership Preferred Securities that are not punctually
paid on any Distribution Payment Date will cease to be payable to the
Person in whose name such Partnership Preferred Securities are regis-
tered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securi-
ties are registered on the special record date or other specified date
for payment of such defaulted or accumulated Distribution. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership
Preferred Securities) are not in book-entry-only form, the relevant
record dates shall be the 15th day of the month of the relevant payment
dates. In the event that any date on which Distributions are payable is
not a Business Day, payment of such Distribution shall be made on the
next succeeding day which is a Business Day (without any interest or
other payment in respect of any such delay) except that, if such Busi-
ness Day falls in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
The Partnership Preferred Securities shall be redeemable as
provided in the Partnership Agreement.
<PAGE/>
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Partnership Preferred Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to
transfer this Partnership Preferred Security Certificate on the books of
the Partnership. The agent may substitute another to act for him or
her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Partnership
Preferred Security Certificate)
EXHIBIT 4.3
ULTRAMAR DIAMOND SHAMROCK CORPORATION
AND
The Bank of New York, Trustee
Indenture
Dated as of June 25, 1997
Subordinated Debt Securities
ULTRAMAR DIAMOND SHAMROCK CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of June 25, 1997
Trust Indenture Act Section Indenture Section
Section 310(a)(1) 608
(a)(2) 608
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 608
Section 311(a) 609
(b) 605
Section 312(a) 605, 703
(b) 701, 702
(c) 702
Section 313(a) 703(a)
(b)(1) Not Applicable
(b)(2) 703(b)
(c) 703(c)
(d) 703(c)
Section 314(a)(1) 704
(a)(2) 704
(a)(3) 704
(a)(4) 1005
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
Section 315(a) 601(a)
(b) 602
(c) 601(b)
(d) 601(c)
(d)(1) 601(a)(1), (c)(1)
(d)(2) 601(c)(2)
(d)(3) 601(c)(3)
(e) 514
Section 316(a)(1)(A) 502, 512
(a)(1)(B) 513
(a)(2) Not Applicable
(b) 508
(c) Not Applicable
Section 317(a)(1) 503
(a)(2) 504
(b) 1003
Section 318(a) 108
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
PARTIES
RECITALS
ARTICLE ONE
SECTION 101. Definitions
Act
Additional Amounts
Affiliate
Authenticating Agent
Authorized Newspaper
Bearer Security
Board of Directors
Board Resolution
Business Day
Commission
Company
Company Request" and "Company Order
Controlled Subsidiary
Corporate Trust Office
corporation
coupon
Defaulted Interest
Dollars" or "$
Event of Default
Holder
Indenture
interest
Interest Payment Date
Maturity
Officers' Certificate
Opinion of Counsel
Original Issue Discount Security
Outstanding
Paying Agent
Person
Place of Payment
Predecessor Security
Redemption Date
Redemption Price
Registered Security
Regular Record Date
Responsible Officer
Security" or "Securities
Security Register" and "Security Registrar
Senior Indebtedness
Special Record Date
Stated Maturity
Subsidiary
Trustee
Trust Indenture Act
United States
United States Alien
U.S. Depository" or "Depository
Vice President
Voting Stock
SECTION 102. Compliance Certificates and Opinions
SECTION 103. Form of Documents Delivered to Trustee
SECTION 104. Acts of Holders
SECTION 105. Notices etc. to Trustee and Company
SECTION 106. Notice to Holders of Securities; Waiver
SECTION 107. Language of Notices, etc.
SECTION 108. Conflict with Trust Indenture Act
SECTION 109. Effect of Headings and Table of Contents
SECTION 110. Successors and Assigns
SECTION 111. Separability Clause
SECTION 112. Benefits of Indenture
SECTION 113. Governing Law
SECTION 114. Legal Holidays
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally
SECTION 202. Form of Trustee's Certificate of Authentication
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
SECTION 302. Denominations
SECTION 303. Execution, Authentication, Delivery and Dating
SECTION 304. Temporary Securities
SECTION 305. Registration, Transfer and Exchange
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities
SECTION 307. Payment of Interest; Interest Rights Preserved
SECTION 308. Persons Deemed Owners
SECTION 309. Cancellation
SECTION 310. Computation of Interest
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture
SECTION 402. Application of Trust Money
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default
SECTION 502. Acceleration of Maturity; Rescission and Annulment
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee
SECTION 504. Trustee May File Proofs of Claim
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons
SECTION 506. Application of Money Collected
SECTION 507. Limitation on Suits
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest
SECTION 509. Restoration of Rights and Remedies
SECTION 510. Rights and Remedies Cumulative
SECTION 511. Delay or Omission Not Waiver
SECTION 512. Control by Holders of Securities
SECTION 513. Waiver of Past Defaults
SECTION 514. Undertaking for Costs
SECTION 515. Waiver of Stay, Extension or Usury Laws
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities
SECTION 602. Notice of Defaults
SECTION 603. Certain Rights of Trustee
SECTION 604. Not Responsible for Recitals or Issuance of Securities
SECTION 605. May Hold Securities
SECTION 606. Money Held in Trust
SECTION 607. Compensation and Reimbursement
SECTION 608. Corporate Trustee Required; Eligibility
SECTION 609. Resignation and Removal; Appointment of Successor
SECTION 610. Acceptance of Appointment by Successor
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business
SECTION 612. Appointment of Authenticating Agent
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders
SECTION 702. Preservation of Information; Communications to Holders
SECTION 703. Reports by Trustee
SECTION 704. Reports by Company
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions
SECTION 802. Rights and Duties of Successor Corporation
SECTION 803. Officers' Certificate and Opinion of Counsel
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders
SECTION 902. Supplemental Indentures with Consent of Holders
SECTION 903. Execution of Supplemental Indentures
SECTION 904. Effect of Supplemental Indentures
SECTION 905. Conformity with Trust Indenture Act
SECTION 906. Reference in Securities to Supplemental Indentures
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest
SECTION 1002. Maintenance of Office or Agency
SECTION 1003. Money for Securities Payments to be Held in Trust
SECTION 1004. Additional Amounts
SECTION 1005. Statement as to Compliance; Notice of Certain Defaults
SECTION 1006. Waiver of Certain Covenants
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101 Agreement to Subordinate
SECTION 1102 Distribution on Dissolution, Liquidation and
Reorganization; Subrogation of Securities
SECTION 1103 No Payment on Securities in Event of Default on Senior
Indebtedness
SECTION 1104 Payments on Securities Permitted
SECTION 1105 Authorization of Holders of Securities to Trustee to
Effect Subordination
SECTION 1106 Notices to Trustee
SECTION 1107 Trustee as Holder of Senior Indebtedness
SECTION 1108 Modification of Terms of Senior Indebtedness
ARTICLE TWELVE
SECTION 1202. Election to Redeem; Notice to Trustee
SECTION 1203. Selection by Trustee of Securities to be Redeemed
SECTION 1204. Notice of Redemption
SECTION 1205. Deposit of Redemption Price
SECTION 1206. Securities Payable on Redemption Date
SECTION 1207. Securities Redeemed in Part
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities
SECTION 1303. Redemption of Securities for Sinking Fund
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. Applicability of Article
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called
SECTION 1502. Call, Notice and Place of Meetings
SECTION 1503. Persons Entitled to Vote at Meetings
SECTION 1504. Quorum; Action
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings
SECTION 1506. Counting Votes and Recording Action of Meetings
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 1601 Securities in Foreign Currencies
INDENTURE, dated as of June 25, 1997, between ULTRAMAR DIAMOND
SHAMROCK CORPORATION, a Delaware corporation (hereinafter called the
"Company"), having its principal office at 9830 Colonnade Boulevard, San
Antonio, Texas 78230 and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (hereinafter called the "Trustee") having its
Corporate Trust Office at 101 Barclay Street, Floor 21 West, New York,
New York 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its
subordinated debentures, notes or other evidences of subordinated
indebtedness (hereinafter called the "Securities"), unlimited as to
principal amount, to bear such rates of interest, to mature at such time
or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the sum of one
dollar duly paid by the Company to the Trustee, the receipt of which is
hereby acknowledged, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders, as follows:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities
or of series thereof, as follows
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have
the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall
mean such accounting principles as are generally accepted at the
date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required by a Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Company in respect of
certain matters, including, without limitation, taxes imposed on certain
Holders, and which are owing to such Holders.
"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.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 612 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in an official language
of the country of publication or in the English language, customarily
published on each Business Day, whether or not published on Saturdays,
Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of
such place. Where successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the
same or in different newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form established
pursuant to Section 201 which is payable to bearer.
"Board of Directors" means either the Board of Directors of the
Company or the Executive Committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"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, except as may otherwise be provided in the form of Securities
of any particular series pursuant to the provisions of this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on
such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of
the Board, the President, a Vice President or by the Treasurer, and by
an Assistant Treasurer, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee.
"Controlled Subsidiary" means any corporation more than 80% of the
outstanding Voting Stock, except for qualifying shares, of which shall
at the time be owned directly or indirectly by the Company.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be
administered, which office is located at 101 Barclay Street, Floor 21
West, New York, New York 10286.
"Corporation" includes corporations, associations, companies and
business trusts.
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollars" or "$" or any similar reference shall mean the currency
of the United States, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.
"Event of Default" has the meaning specified in Section 501.
"Holder", when used with respect to any Security, means in the case
of a Registered Security, the Person in whose name the Security is
registered in the Security Register and in the case of a Bearer
Security, the bearer thereof and, when used with respect to any coupon,
means the bearer thereof.
"Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, and shall
include each Officers' Certificate delivered to the Trustee pursuant to
Section 303.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity, and, when used with respect to a
Security which provides for the payment of Additional Amounts pursuant
to Section 1004, includes such Additional Amounts.
"Interest Payment Date" means the Stated Maturity of an instalment
of interest on the applicable Securities.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, notice of redemption,
request for redemption or otherwise.
"Officers' Certificate" means 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 the
Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an
employee of or counsel for the Company, or other counsel acceptable to
the Trustee.
"Original Issue Discount Security" means a Security issued pursuant
to this Indenture which provides for declaration of an amount less than
the principal thereof to be due and payable upon acceleration pursuant
to Section 502.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities and any coupons thereto appertaining, provided
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
and
(iii) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder or are present at a meeting of Holders of Securities for
quorum purposes, the principal amount of an Original Issue Discount
Security that may be counted in making such determination and that shall
be deemed to be Outstanding for such purposes shall be equal to the
amount of the principal thereof that could be declared to be due and
payable pursuant to the terms of such Original Issue Discount Security
at the time the taking of such action by the Holders of such requisite
principal amount is evidenced to the Trustee as provided in Section
104(a), and, provided further, that Securities owned beneficially by the
Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor, other than Securities purchased in
connection with the distribution or trading thereof, shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Place of Payment" when used with respect to the Securities of any
series, means the place or places where the principal of (and premium,
if any) and interest on the Securities of that series are payable as
specified as provided pursuant to Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306
in exchange for or in lieu of a lost, destroyed, mutilated or stolen
Security or a Security to which a mutilated, destroyed, lost or stolen
coupon appertains shall be deemed to evidence the same debt as the lost,
destroyed, mutilated or stolen Security or the Security to which a
mutilated, destroyed, lost or stolen coupon appertains.
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed means the price at which it is to be redeemed as determined
pursuant to the provisions of this Indenture.
"Registered Security" means any Security established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on a Registered
Security on any Interest Payment Date means the date, if any, specified
in such Security as the "Regular Record Date".
"Responsible Officer" when used with respect to the Trustee means
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 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.
"Security" or "Securities" means any Security or Securities, as the
case may be, authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means any payment in respect of indebtedness
of the Company for money borrowed, except for trade credit and any such
indebtedness that is by its terms subordinated to or pari passu with the
Securities.
"Special Record Date" for the payment of any Defaulted Interest on
the Registered Securities of any series means a date fixed by the
Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Security or any
instalment of principal thereof or interest thereon means the date
specified in such Security or a coupon representing such installment of
interest as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or
controls directly or indirectly more than 50% of the shares of Voting
Stock, (ii) any general partnership, joint venture, business trust or
similar entity, of which at the time of determination the Company and/or
one or more Subsidiaries owns or controls directly or indirectly more
than 50% or the outstanding partnership or similar interests and (iii)
any limited partnership of which the Company or any of its Subsidiaries
is a general partner. "Wholly-owned", when used with reference to a
Subsidiary, means a Subsidiary of which all of the outstanding capital
stock (except for qualifying shares) or partnership or similar
interests, as applicable, is owned by the Company or by one or more
wholly-owned Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such with respect to one or more series of Securities pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall
mean each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" as used with respect to
the Securities of any series shall mean the Trustee with respect to the
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a
particular provision thereof shall mean such Act or provision, as the
case may be, as amended or replaced from time to time or as supplemented
from time to time by rules or regulations adopted by the Commission
under or in furtherance of the purposes of such Act or provision, as the
case may be.
"United States" means the United States of America (including the
States and the District of Columbia), its territories and possessions
and other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a non-resident
alien individual, a non-resident alien fiduciary of a foreign estate or
trust, or a foreign partnership one or more of the members of which is,
for United States Federal income tax purposes, a foreign corporation, a
non-resident alien individual or a nonresident alien fiduciary of a
foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to the
Securities of any series issuable or issued in whole or in part in the
form of one or more global Securities, the Person designated as U.S.
Depository by the Company pursuant to Section 301, which must be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and, if so provided pursuant to Section 301 with respect to the
Securities of any series, any successor to such Person. If at any time
there is more than one such Person, "U.S. Depository" shall mean, with
respect to any series of Securities, the qualifying entity which has
been appointed with respect to the Securities of that series.
"Vice President" when used with respect to the Company shall mean
any Vice President of the Company whether or not designated by a number
or a word or words added before or after the title "Vice President".
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of such corporation
provided that, for the purposes hereof, stock, which carries only the
right to vote conditionally on the happening of an event shall not be
considered voting stock whether or not such event shall have happened.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of
any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only
one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows,
or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. If,
but only if, Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders of Securities of such series may,
alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a
combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both
are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any
such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instrument or of
a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the
Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.
Without limiting the generality of this Section 104, unless
otherwise established in or pursuant to a Board Resolution or set
forth or determined in an Officers' Certificate, or established in
one or more indentures supplemental hereto, pursuant to Section
301, a Holder, including a U.S. Depository that is a Holder of a
global Security, may make, give or take, by a proxy, or proxies,
duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its
proxy or proxies to the beneficial owners of interests in any such
global Security through such U.S. Depository's standing
instructions and customary practices.
The Company shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in
any permanent global Security held by a U.S. Depository entitled
under the procedures of such U.S. Depository to make, give or take,
by a proxy or proxies duly appointed in writing, any request,
demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by
Holders. If such a record date is fixed, the Holders on such
record date or their duly appointed proxy or proxies, and only such
Persons shall be entitled to make, give or take such request,
demand, authorization, direction, notice, consent, waiver or other
action, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction,
notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner
which the Trustee deems sufficient and in accordance with such
reasonable rules as the Trustee may determine; and the Trustee may
in any instance require further proof with respect to any of the
matters referred to in this Section.
(c) The ownership of Registered Securities and the principal
amount and serial numbers of Registered Securities held by any
Person, and the date of holding the same, shall be proved by the
Security Register.
(d) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same,
may be proved by the production of such Bearer Securities or by a
certificate executed, as depositary, by any trust company, bank,
banker or other depositary reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the
Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person
holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is
produced, or (2) such Bearer Security is produced to the Trustee by
some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is
no longer Outstanding. The principal amount and serial numbers of
Bearer Securities held by the Person so executing such instrument
or writing and the date of holding the same may also be proved in
any other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any
Registered Securities any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may,
at its option, by Board Resolution, fix in advance a record date
for the determination of Holders of Registered Securities entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the
Holders of Registered Securities of record at the close of business
on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders of
Registered Securities on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall
bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 105. Notices etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to the attention of its Treasurer
at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, where this Indenture provides for notice to Holders of
Securities of any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at his address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such Notice; and
(2) such notice shall be sufficiently given to Holders of
Bearer Securities, if any, if published in an Authorized Newspaper
in The City of New York and, if the Securities of such series are
then listed on any stock exchange outside the United States, in an
Authorized Newspaper in such city as the Company shall advise the
Trustee that such stock exchange so requires, on a Business Day at
least twice, the first such publication to be not earlier than the
earliest date and not later than the latest date prescribed for the
giving of such notice.
In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect
in any notice so mailed, to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice
to Holders of Bearer Securities given as provided herein. In case by
reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other
cause it shall be impracticable to publish any notice to Holders of
Bearer Securities as provided above, then such notification to Holders
of Bearer Securities as shall be given with the approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice mailed to Holders
of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be equivalent of
such notice. Waivers of notice by Holders of Securities shall be filed
with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
SECTION 107. Language of Notices, etc.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be
in the English language, except that, if the Company so elects, any
published notice may be in an official language of the country of
publication.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required
provisions shall control.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities or
coupons shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons, express
or implied, shall give to any Person, other than the parties hereto, any
Security Registrar, any Paying Agent and their successors hereunder and
the Holders of Securities or coupons, any benefit or any legal or
equitable right, remedy or
SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by
and controlled in accordance with the laws of the State of New York
without regard to the conflicts of laws provisions thereof.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture
or the Securities or coupons other than a provision in the Securities
which specifically states that such provision shall apply in lieu of
this Section) payment of interest or any Additional Amounts or principal
(and premium, if any) need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day, except that
if such next succeeding Business Day is in the next succeeding calendar
year, then on the immediately preceding Business Day, at such Place of
Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, and no
interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series, related coupons, if any, and
temporary global Securities, if any, shall be in the form established by
or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their
execution of such Securities.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, the Securities of each series shall
be issuable in registered form without coupons. If so provided as
contemplated by Section 301, the Securities of a series also shall be
issuable in bearer form, with or without interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods
on a steel engraved border or steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such
Securities, as conclusively evidenced by their execution of such
Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: By:
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures
supplemental hereto:
(1) the title of the Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may
be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 304, 305, 306, 906 or 1107);
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons)
or both; any restrictions applicable to the offer, sale or delivery
of Bearer Securities and the terms upon which Bearer Securities of
the series may be exchanged for Registered Securities of the series
and vice versa; and whether any Securities of the series are to be
issuable initially in global form and, if so, (i) whether
beneficial owners of interests in any such global Security may
exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the
manner specified in Section 305 and (ii) the name of the depository
or the U.S. Depository, as the case may be, with respect to any
global Security;
(4) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding
Securities of the series shall be dated if other than the date of
original issuance of the first Security of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a
temporary Bearer Security in global form (representing all of the
Outstanding Bearer Securities of the series) payable in respect of
an Interest Payment Date prior to the exchange of such temporary
Bearer Security for definitive Securities of the series shall be
paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such
event, the terms and conditions (including any certification
requirements) upon which any such interest payment received by a
clearing organization will be credited to the Persons entitled to
interest payable on such Interest Payment Date;
(6) the date or dates on which the principal of such
Securities is payable;
(7) the rate or rates at which such Securities shall bear
interest, if any, or any method by which such rate or rates shall
be determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be
payable and the Regular Record Date for the interest payable on
Registered Securities on any Interest Payment Date, whether and
under what circumstances Additional Amounts on such securities
shall be payable in respect of specified taxes, assessments or
other governmental charges withheld or deducted and, if so, whether
the Company has the option to redeem the affected Securities rather
than pay such Additional Amounts, and the basis upon which interest
shall be calculated if other than that of a 360 day year of twelve
30-day months;
(8) the place or places, if any, in addition to or other than
the Borough of Manhattan, The City of New York, where the principal
of (and premium, if any) and interest on or Additional Amounts, if
any, payable in respect of such Securities shall be payable;
(9) the period or periods within which, the price or prices
at which and the terms and conditions upon which such Securities
may be redeemed, in whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or
purchase such Securities pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms
and conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and
any provisions for the remarketing of such Securities;
(11) the denominations in which Registered Securities of the
series, if any, shall be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations in
which Bearer Securities of the series, if any, shall be issuable if
other than the denomination of $5,000;
(12) if other than the principal amount thereof, the portion
of the principal amount of such Securities which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(13) if other than such coin or currency of the United States
of America as at the time of payment is legal tender for payment of
public or private debts, the coin or currency, including composite
currencies, in which payment of the principal of (and premium, if
any) and interest, if any, on, and Additional Amounts in respect of
such Securities shall be payable;
(14) if the principal of (and premium, if any) or interest,
if any, on, and Additional Amounts in respect of, such Securities
are to be payable, at the election of the Company or a Holder
thereof, in a coin or currency, including composite currencies,
other than that in which the Securities are stated to be payable,
the period or periods within which, and the terms and conditions
upon which, such election may be made;
(15) if the amount of payments of principal of (and premium,
if any) or interest, if any, on, and Additional Amounts in respect
of, such Securities may be determined with reference to an index,
formula or other method or based on a coin or currency other than
that in which the Securities are stated to be payable, the manner
in which such amounts shall be determined;
(16) the right, if any, of the Company to defer payments of
interest by extending the interest payment periods and specify the
duration of such extension, the Interest Payment Dates on which
such interest shall be payable and whether and under what
circumstances additional interest on amounts deferred shall be
payable;
(17) the limitation, if any, on the Company's right to 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;
(18) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other
conditions, then the form and terms of such certificates, documents
or conditions; and
(19) any other terms of such Securities (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to
Bearer Securities of such series, if any, shall be substantially
identical except as to denomination and the rate or rates of interest,
if any, and Stated Maturity, the date from which interest, if any, shall
accrue and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto. All Securities of any one series
need not be issued at the same time, and unless otherwise provided, a
series may be reopened for issuances of additional Securities of such
series.
If any of the terms of the Securities of any series are established
by action taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the
terms of such series.
SECTION 302. Denominations.
Unless other denominations and amounts may from time to time be
fixed by or pursuant to a Board Resolution, the Registered Securities of
each series, if any, shall be issuable in registered form without
coupons in denominations of $1,000 and any integral multiple thereof and
the Bearer Securities of each series, if any, shall be issuable in the
denomination of $5,000, or in such other denominations and amounts as
may from time to time be fixed by or pursuant to a Board Resolution.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, President, Vice President serving as Chief
Financial Officer or its Treasurer and attested by its Secretary or one
of its Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile. Coupons shall bear the
facsimile signature of the Treasurer or any Assistant Treasurer of the
Company.
Securities and coupons bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of
such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series,
together with any coupons appertaining thereto, executed by the Company
to the Trustee for authentication, together with the Board Resolution
and Officers' Certificate or supplemental indenture with respect to such
Securities referred to in Section 301 and a Company Order for the
authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order and subject to the provisions hereof
shall authenticate and make available for delivery such Securities. In
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601)
shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) the form and terms of such Securities and coupons, if
any, have been established in conformity with the provisions of
this Indenture;
(b) that all conditions precedent to the authentication and
delivery of such Securities, together with the coupons, if any,
appertaining thereto, have been complied with and that such
Securities and coupons, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable
in accordance with their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting the enforcement of creditors' rights and to general
equity principles,
(c) that all laws and requirements in respect of the
execution and delivery by the Company of such Securities and
coupons, if any, have been complied with; and
(d) as to such other matters as the Trustee may reasonably
request.
The Trustee shall not be required to authenticate such Securities
if the issue of such Securities pursuant to this Indenture will affect
the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee or if the Trustee being advised by counsel
determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security and any temporary Bearer Security
in global form shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Security a certificate of authentication
substantially in the form provided for in Section 202 or 615 executed by
or on behalf of the Trustee by the manual signature of one of its
authorized signers, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. Except as permitted by
Section 306 or 307, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured
have been detached and cancelled.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute and deliver to the Trustee, and upon Company Order
the Trustee shall authenticate and deliver, in the manner provided in
Section 303, temporary Securities of such series which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form, or, if
authorized, in bearer form with one or more coupons or without coupons,
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities. In the case of Bearer
Securities of any series, such temporary Securities may be in global
form, representing all of the Outstanding Bearer Securities of such
series.
Except in the case of temporary Securities in global form, which
shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary
Securities of such series shall be exchangeable for definitive
Securities of such series containing identical terms and provisions upon
surrender of the temporary Securities of such series at an office or
agency of the Company maintained for such purpose pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series (accompanied by any
unmatured coupons appertaining thereto) the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations of
the same series containing identical terms and provisions; provided,
however, that no definitive Bearer Security, except as provided pursuant
to Section 301, shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security
only in compliance with the conditions set forth therein. Unless
otherwise specified as contemplated by Section 301 with respect to a
temporary global Security, until so exchanged the temporary Securities
of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any,
the Company shall cause to be kept at an office or agency of the Company
maintained pursuant to Section 1002, a register (herein sometimes
referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide
for the registration of the Registered Securities of each series and of
transfers of the Registered Securities of each series. Such office or
agency shall be the "Security Registrar" for the Registered Securities,
if any, of each series of Securities. In the event that the Trustee
shall not be the Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Registered
Security of any series at any office or agency of the Company maintained
for that series pursuant to Section 1002, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations, of a
like aggregate principal amount bearing a number not contemporaneously
outstanding and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series
may be exchanged for other Registered Securities of the same series
containing identical terms and provisions, in any authorized
denominations, and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency.
Whenever any Registered Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Registered Securities which the holder making the exchange is
entitled to receive.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series containing
identical terms and provisions, of any authorized denominations and
aggregate principal amount, upon surrender of the Bearer Securities to
be exchanged at any such office or agency, with all unmatured coupons
and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or
coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee
if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying
Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in
Section 1002, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in
case a Bearer Security of any series is surrendered at any such office
or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i)
any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any
Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be
(or, if such coupon is so surrendered with such Bearer Security, such
coupon shall be returned to the person so surrendering the Bearer
Security), and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to
the Holder of such coupon when due in accordance with the provisions of
this Indenture.
If expressly provided with respect to the Securities of any series,
at the option of the Holder, Registered Securities of such series may be
exchanged for Bearer Securities upon such terms and conditions as may be
provided with respect to such series.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Securities which the Holder making the exchange is entitled to
receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable
only if (i) the Securities Depository is at any time unwilling or unable
to continue as Securities Depository and a successor depository is not
appointed by the Company within 60 days, (ii) the Company executes and
delivers to the Trustee a Company Order to the effect that such global
Security shall be so exchangeable, or (iii) an Event of Default has
occurred and is continuing with respect to the Securities. If the
beneficial owners of interests in a global Security are entitled to
exchange such interests for Securities of such series and of like tenor
and principal amount of any authorized form and denomination, as
specified as contemplated by Section 301, then without unnecessary delay
but in any event not later than the earliest date on which such
interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in aggregate principal amount equal
to the principal amount of such global Security, executed by the
Company. On or after the earliest date on which such interests may be
so exchanged, such global Securities shall be surrendered from time to
time by the U.S. Depository or such other depository as shall be
specified in the Company Order with respect thereto, and in accordance
with instructions given to the Trustee and the U.S. Depository or such
depository, as the case may be (which instructions shall be in writing
but need not comply with Section 102 or be accompanied by an Opinion of
Counsel), as shall be specified in the Company Order with respect
thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities of the same
series without charge. The Trustee shall authenticate and make
available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like
tenor as the portion of such global Security to be exchanged which
(unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, in which case the definitive
Securities exchanged for the global Security shall be issuable only in
the form in which the Securities are issuable, as specified as
contemplated by Section 301) shall be in the form of Bearer Securities
or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no
such exchanges may occur during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending on the relevant Redemption Date; and provided,
further, that (unless otherwise specified as contemplated by Section
301) no Bearer Security delivered in exchange for a portion of a global
Security shall be mailed or otherwise delivered to any location in the
United States. Promptly following any such exchange in part, such
global Security shall be returned by the Trustee to such depository or
the U.S. Depository, as the case may be, or such other depository or
U.S. Depository referred to above in accordance with the instructions of
the Company referred to above. If a Registered Security is issued in
exchange for any portion of a global Security after the close of
business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record
Date and before the opening of business at such office or agency on the
related proposed date for payment of interest or Defaulted Interest, as
the case may be, interest will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture,
as the Securities surrendered upon such registration of transfer or
exchange.
Every Registered Security presented or surrendered for registration
of transfer, or for exchange or redemption shall (if so required by the
Company or the Security Registrar for such series of Security presented)
be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and such Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to
Section 304, 906 or 1206 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Securities of any series during a period
beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Securities of that series selected
for redemption under Section 1103 and ending at the close of business on
the day of such mailing, or (ii) to register the transfer of or exchange
any Registered Security so selected for redemption in whole or in part,
except, in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series, provided that such
Registered Security shall be immediately surrendered for redemption with
written instruction for payment consistent with the provisions of this
Indenture.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a new Security of the same series
containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with coupons corresponding to
the coupons, if any, appertaining to the surrendered Securities.
If there be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee
that such Security or coupon has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all
appurtenant coupons not destroyed, lost or stolen), a new Security of
the same series containing identical terms and of like principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed,
lost or stolen Security or to the Security to which such destroyed, lost
or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security
or coupon; provided, however, that payment of principal of (and premium,
if any) and any interest on Bearer Securities shall, except as otherwise
provided in Section 1002, be payable only at an office or agency located
outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be
payable only upon presentation and surrender of the coupons appertaining
thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and
its counsel) connected therewith.
Every new Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security and its coupons, if any, or the destroyed, lost
or stolen coupon shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and
their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date
shall, if so provided in such Security, be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an
office of agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer
Security shall be surrendered without the coupon relating to such
Interest Payment Date and interest will not be payable on such Interest
Payment Date in respect of the Registered Security issued in exchange
for such Bearer Security, but will be payable only to the Holder of such
coupon when due in accordance with the provisions of this Indenture.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date for such Registered Security (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities
affected (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each
such Registered Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest
as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of such
Registered Securities at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date.
The Trustee may in the name and at the expense of the Company,
cause a similar notice to be published at least once in a
newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of
Manhattan, The City of New York, but such publication shall not be
a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Registered Securities (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following Clause (2). In case a Bearer Security of any series
is surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special
Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the
coupon relating to such proposed date of payment and Defaulted
Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such
coupon when due in accordance with the provisions of this
Indenture.
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and
upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable
by the Trustee.
At the option of the Company, interest on Registered Securities of
any series that bear interest may be paid by mailing a check to the
address of the person entitled thereto as such address shall appear in
the Security Register.
Subject to the foregoing provisions of this Section and Section
305, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall
carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name such Registered Security
is registered as the owner of such Registered Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject
to Sections 305 and 307) interest on and Additional Amounts with respect
to, such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall
be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of
any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Security or coupon be
overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking
fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and coupons and
Securities and coupons surrendered directly to the Trustee for any such
purpose shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall
be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities and coupons held by the Trustee
shall be returned by the Trustee to the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360 day year of twelve 30-day months
or, for any period shorter than a full three months, on the basis of the
actual number of days elapsed in such period.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
Upon the direction of the Company by a Company Order this Indenture
shall cease to be of further effect (except as to any surviving rights
of registration of transfer or exchange of Securities herein expressly
provided for and any right to receive Additional Amounts, as provided in
Section 1004), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered and all coupons appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived
as provided in Section 305, (ii) Securities and coupons which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing
after the relevant Redemption Date, whose surrender has been
waived as provided in Section 1106, and (iv) Securities and
coupons for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all such Securities and, in the case of (i) or (ii)
below, any such coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company,
are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company, in the
case of (i), (ii) or (iii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust
for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities and coupons
not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect
thereto, to the date of such deposit (in the case of
Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
In the event there are Securities of two or more series hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so
with respect to Securities of all series as to which it is Trustee and
if the other conditions thereto are met. In the event there are two or
more Trustees hereunder, then the effectiveness of any such instrument
shall be conditioned upon receipt of such instrument from all Trustees
hereunder.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607 and, if
money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it, in accordance with the provisions of
the Securities, the coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as
its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and any
interest and Additional Amounts for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that
series when such interest or Additional Amounts becomes due and
payable, and continuance of such default for a period of 30 days;
provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of the
Securities of such series shall not constitute a default in the
payment of interest for this purpose; or
(2) default in the payment of the principal of (and premium,
if any, on) any Security of that series when it becomes due and
payable at Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has been
expressly included in this Indenture solely for the benefit of
series of Securities other than that series), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its
affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(6) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for any substantial part of its
property, or shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due or shall take any corporate action in furtherance of any of the
foregoing; or
(7) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series may declare the principal
of all the Securities of that series, or such lesser amount as may be
provided for in the Securities of that series, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee
if given by the Holders), and upon any such declaration such principal
or such lesser amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect
to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Securities of
that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at
the rate or rates borne by or provided for in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest and
Additional Amounts at the rate or rates borne by or provided
for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities
of that series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if
(1) default is made in the payment of any instalment of
interest on or any Additional Amounts payable in respect of any
Security when such interest or Additional Amounts shall have become
due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at its Maturity.
the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities and coupons, the whole amount then due
and payable on such Securities and coupons for principal (and premium,
if any) and interest and Additional Amounts, if any, with interest upon
the overdue principal (and premium, if any) and, to the extent that
payment of such interest shall be legally enforceable, upon overdue
installments of interest or any Additional Amounts, at the rate or rates
borne by or provided for in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so
due and unpaid, and may prosecute such proceeding to judgment or final
decree, and may enforce the same against the Company or any other
obligor upon such Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of
Securities of such series and any related coupons by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company or of
such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the
payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of that
series, of principal (and premium, if any) and interest and any
Additional Amounts owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents or counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such judicial proceeding is hereby authorized
by each Holder of Securities and coupons to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders of Securities and coupons, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder of
a Security or coupon any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or coupons or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder of a Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the
production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery or judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in
respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of
principal (and premium, if any), interest or any Additional Amounts,
upon presentation of the Securities or coupons, or both, as the case may
be, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and its
agents and counsel under Section 607;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium, if any) and
interest and any Additional Amounts payable in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
aggregate amounts due and payable on such Securities and coupons
for principal (and premium, if any), interest and Additional
Amounts, respectively;
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons
shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other such Holders or Holders of any other series, or to
obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if
any) and (subject to Sections 305 and 307) interest on and any
Additional Amounts in respect of such Security or payment of such coupon
on the respective Stated Maturity or Maturities expressed in such
Security or coupon (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason, or
has been determined adversely to the Trustee or to such Holder, then and
in every such case the Company, the Trustee and the Holders of
Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in
the last paragraph of Section 306, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or
coupons is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion of employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security or coupon to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee or to
the Holders of Securities or coupons may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall 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 Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of
other Holders of Securities of such series.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series and any related coupons waive any past
default hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of (and premium, if any)
or interest on or Additional Amounts payable in respect of any
Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security or coupon by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, suffered or omitted by it
as Trustee, the filing by any party litigant in such suit, other than
the Trustee, of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit,
including the Trustee, having due regard to the merits and good faith of
the claims or defenses made by such party litigant, but the provisions
of this Section shall not apply to any suit instituted by the Company,
the Trustee or by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder of any
Security or coupon for the enforcement of the payment of the principal
of (and premium, if any) or interest on or any Additional Amounts in
respect of any Security or the payment of any coupon on or after the
respective Stated Maturities expressed in such Security (or, in the case
of redemption, on or after the Redemption Date) or interest on any
overdue principal of any Security.
SECTION 515. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties, and
only such duties, as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own wilful misconduct,
except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the 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
principal amount of the Outstanding Securities of any series,
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such
series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by
mail to all Holders of Securities of such series entitled to receive
reports pursuant to Section 703(c), notice of such default hereunder
known to the Trustee, unless such default shall have been cured or
waived, provided, however, that, except in the case of a default in the
payment of the principal of (and premium, if any) or interest on, or any
Additional Amounts with respect to, any Security of such series or in
the payment of any sinking fund instalment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee
in good faith determine that the withholding of such notice is in the
interests of the Holders of Securities and coupons of such series; and
provided, further, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of
such series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the 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, or other
paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Security to the Trustee for
authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of
the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any
series or any related coupons pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or
direction;
(f) the 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, debenture or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the 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.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be
taken as the statements of the Company, and the Trustee or any
Authenticating Agent assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Securities or coupons. The Trustee or any
Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and
coupons and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as the parties shall agree to in writing from time to time for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursements or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold
them harmless against, any loss, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending
themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities
of any series upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal
of (or premium, if any) or interest on Securities.
SECTION 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a
corporation (or other person permitted to so act by the Commission
permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a
combined capital and surplus (computed in accordance with Section
310(a)(2) of the Trust Indenture Act) of at least $50,000,000. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section or Section 310(a)(5) of the Trust Indenture
Act, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 610.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series giving written notice thereof to
the Company. If the instrument of acceptance by a successor
Trustee required by Section 610 shall not have been delivered to
the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee
with respect to such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company. If the instrument of
acceptance by a successor Trustee required by Section 610 shall not
have been delivered to the Trustee within 30 days after the giving
of such notice of removal, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.
(d) If at any time:
(1) the Trustee shall fail to comply with the
obligations imposed upon it under Section 310(b) of the Trust
Indenture Act with respect to Securities of any series after
written request therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section
608 and shall fail to resign after written request therefor by
the Company or by any such Holder of a Security, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act,
any Holder of a Security who has been a bona fide Holder of a Security
of any series for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities of such
series and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or
more series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Securities
of any particular series) and shall comply with the applicable
requirements of Section 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of
Section 610, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and
accepted appointment in the manner required by Section 610, any
Holder of a Security who has been a bona fide Holder of a Security
of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect to
the Securities of any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of
Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of
such series are issued as Bearer Securities, by publishing notice
of such event once in an Authorized Newspaper in each Place of
Payment located outside the United States. Each notice shall
include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust
Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to
or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any notice
given to, or received by, or any act or failure to act on the part
of any other Trustee hereunder, and upon the execution and delivery
of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Securities
of that or those series to which the appointment of such successor
Trustee relates have no further responsibility for the exercise of
rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture other than
as hereinafter expressly set forth, and each such successor Trustee
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
Trustee, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of
this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 612. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to
act on behalf of the Trustee to authenticate Securities of such series
issued upon original issue or exchange, registration of transfer or
partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by
the Trustee hereunder. Wherever reference is made in this Indenture to
the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an Authenticating
Agent, shall continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee
may appoint a successor Authenticating Agent which shall be acceptable
to the Company and shall (i) mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Registered
Securities, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in
the Security Register, and (ii) if Securities of the series are issued
as Bearer Securities, publish notice of such appointment at least once
in an Authorized Newspaper in the place where such successor
Authenticating Agent has its principal office if such office is located
outside the United States. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to
each Authenticating Agent.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the
following form.
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: By:
As Authenticating Agent
By:
Authorized Signatory
If all of the Securities of any series may not be originally issued
at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of
Payment where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested in
writing (which writing need not comply with Section 102) by the Company,
shall appoint in accordance with this Section 612 an Authenticating
Agent having an office in a Place of Payment designated by the Company
with respect to such series of Securities.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than fifteen days after the
Regular Record Date for interest for each series of Securities, a
list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Registered Securities of such
series as of such Regular Record Date, or if there is no Regular
Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such
series, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any
such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished,
provided, however, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to
Holders.
The Trustee shall comply with the obligations imposed upon it
pursuant to Section 312 of the Trust Indenture Act.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company,
the Trustee, any Paying Agent or any Security Registrar shall be held
accountable by reason of the disclosure of any information as to the
names and addresses of the Holders of Securities in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from
which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request
made under Section 312(b) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with
the first May 15 following the first issuance of Securities
pursuant to Section 301, if required by Section 313(a) of the Trust
Indenture Act, the Trustee shall transmit, pursuant to Section
313(c) of the Trust Indenture Act, a brief report dated as of such
May 15 with respect to any of the events specified in said Section
313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by
Section 313(b) of the Trust Indenture Act at the times specified
therein.
(c) Reports pursuant to this Section shall be transmitted in
the manner and to the Persons required by Sections 313(c) and
313(d) of the Trust Indenture Act. The Company will notify the
Trustee when any series of Securities are listed on any securities
exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required
to file information, documents or reports pursuant to either of
said sections, then it shall file with the Commission, in
accordance with rules and regulations prescribed from time to time
by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and
regulations and shall file a copy thereof with the Trustee within
30 days after such supplementary and periodic information,
documents and reports would have been required to be filed with the
Commission;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 703(c)
with respect to reports pursuant to Section 703(a), such summaries
of any information, documents and reports required to be filed by
the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions.
The Company 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 Company
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 or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of
(and premium, if any), any interest on, and any Additional Amounts
payable pursuant to Section 1004 with respect to, all the Securities,
according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to
be performed by the Company by supplemental indenture satisfactory to
the Trustee, executed and delivered to the Trustee by such corporation,
and (ii) the Company 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 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or
conveyance and upon any such assumption by the successor corporation,
such successor corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the
party of the first part, and the predecessor corporation, except in the
event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities and coupons. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name
or in the name of the Company, any or all of the Securities and coupons
issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such
successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities and coupons
which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Securities or
coupons which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the
Securities and coupons so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities and
coupons theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities and coupons had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in substance)
may be made in the Securities and coupons thereafter to be issued as may
be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
The Trustee, subject to the provisions of Sections 601 and 603, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance,
and any such assumption, complies with the provisions of this Article.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants
of the Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender any
right or power herein conferred upon the Company; or
(3) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as
to principal, to change or eliminate any restrictions on the
payment of principal (or premium, if any) on Registered Securities
or of principal (or premium, if any) or any interest on Bearer
Securities, to permit Registered Securities to be exchanged for
Bearer Securities or to permit the issuance of Securities in
uncertificated form, provided any such action shall not adversely
affect the interests of the Holders of Securities of any series or
any related coupons in any material respect; or
(4) to establish the form of terms of Securities of any
series as permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 610 (b); or
(6) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture which
shall not be inconsistent with the provisions of this Indenture
which shall not adversely affect the interest of the Holders of
Securities of any series or any related coupons in any material
respect; or
(7) to add to, delete from or revise the conditions,
limitations and restrictions on the authorized amount, terms or
purposes of issue, authentication and delivery of Securities, as
herein set forth; or
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series
affected by such supplemental indenture, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders
of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any Additional
Amounts payable in respect thereof, or any premium payable upon the
redemption thereof, or change the obligation of the Company to pay
Additional Amounts pursuant to Section 1004 (except as contemplated
by Section 801(i) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or
any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder
and their consequences) provided for in this Indenture, or reduce
the requirements of Section 1404 for quorum or voting, or
(3) modify any of the provisions of this Section, or Section
513, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding
Security affected thereby.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series
with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of
any other series.
It shall not be necessary for any Act of Holders of Securities
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder and of any coupons appertaining
thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the
principal of (and premium, if any), interest on and any Additional
Amounts payable in respect of the Securities of that series in
accordance with the terms of such series of Securities, any coupons
appertaining thereto and this Indenture. Any interest due on and any
Additional Amounts payable in respect of Bearer Securities on or before
Maturity, other than Additional Amounts, if any, payable as provided in
Section 1004 in respect of principal of (or premium, if any, on) such a
Security, shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby
as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series (but
not Bearer Securities, except as otherwise provided below, unless such
Place of Payment is located outside the United States) may be presented
or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company will maintain, subject to any
laws or regulations applicable thereto, an office or agency in a Place
of Payment for such series which is located outside the United States
where Securities of such series and the related coupons may be presented
and surrendered for payment (including payment of any Additional Amounts
payable on Securities of such series pursuant to Section 1004);
provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or
the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent in London, Luxembourg or any other
required city located outside the United States, as the case may be, so
long as the Securities of such series are listed on such exchange. The
Company will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts
payable on Bearer Securities of that series pursuant to Section 1004) at
the place specified for the purpose pursuant to Section 301, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no
payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an
account maintained with a bank located in the United States; provided,
however, payment of principal of and any premium and interest in U.S.
dollars (including Additional Amounts payable in respect thereof) on any
Bearer Security may be made at the Corporate Trust Office of the Trustee
in the Borough of Manhattan, The City of New York if (but only if)
payment of the full amount of such principal, premium, interest or
Additional Amounts at all offices outside the United States maintained
for the purpose by the Company in accordance with this Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency. Unless otherwise set forth in a Board Resolution or indenture
supplemental hereto with respect to a series of Securities, the Company
hereby designates as the Place of Payment for each series of Securities
the Borough of Manhattan, The City of New York, and initially appoints
the Trustee at its Corporate Trust Office as the Company's office or
agency for each of such purposes in such City.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date
of the principal of (and premium, if any), or interest on, any of the
Securities of that series, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the
principal of (and premium, if any), or interest on, any Securities of
that series, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series
in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making
of any payment of principal (and premium, if any) or interest on
the Securities of that series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or of any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Except as otherwise provided in the form of Securities of any
particular series pursuant to the provisions of this Indenture, any
money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company
cause to be published once, in an Authorized Newspaper in each Place of
Payment or to be mailed to Holders of Registered Securities, or both,
notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of any
series or any coupon appertaining thereto Additional Amounts as provided
therein. Whenever in this Indenture there is mentioned, in any context,
the payment of the principal of (or premium, if any) or interest on, or
in respect of, any Security of any series or any related coupon or the
net proceeds received on the sale or exchange of any Security of any
series, such mention shall be deemed to include mention of the payment
of Additional Amounts provided for in this Section to the extent that,
in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and express
mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts
in those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with
respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which
a payment of principal (and premium, if any) is made), and at least 10
days prior to each date of payment of principal (and premium, if any) or
interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will
furnish the Trustee and the Company's principal Paying Agent or Paying
Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether
such payment of principal (and premium, if any) or interest on the
Securities of that series shall be made to Holders of Securities of that
series or the related coupons who are United States Aliens without
withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of that Series. If any
such withholding shall be required, then such Officers' Certificate
shall specify by country the amount, if any, required to be withheld on
such payments to such Holders of Securities or coupons and the Company
will pay to the Trustee or such Paying Agent the Additional Amounts
required by this Section. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any
loss, liability or expense reasonably incurred without negligence or bad
faith on their part arising out of or in connection with actions taken
or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
SECTION 1005. Statement as to Compliance
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement, which need not comply with
Section 102, signed by the Chairman of the Board, the President or a
Vice President and by the Treasurer, an Assistant Treasurer, the
Controller or an Assistant Controller of the Company, stating, as to
each signer thereof, that
(a) a review of the activities of the Company during such year and
of performance under this Indenture has been made under his
supervision, and
(b) to the best of his knowledge, based on such review, (i) the
Company has fulfilled all of its obligations under this Indenture
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default
known to him and the nature and status thereof, and (ii) no event
has occurred and is continuing which is, or after notice or lapse
of time or both would become, an Event of Default, or, if such an
event has occurred and is continuing, specifying each such event
known to him and the nature and status thereof.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1004 to 1005,
inclusive, with respect to the Securities of any series if before the
time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain
in full force and effect.
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of Securities, by his acceptance thereof,
likewise covenants and agrees, that the payment of the principal of (and
premium, if any), interest on and any Additional Amounts payable in
respect of each and all of the Securities is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the prior payment in full of all Senior
Indebtedness.
SECTION 1102. Distribution on Dissolution, Liquidation and
Reorganization; Subrogation of Securities.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency, reorganization or receivership
proceedings or upon an assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of the Company or
otherwise (subject to the power of a court of competent jurisdiction to
make other equitable provision reflecting the rights conferred in this
Indenture upon the Senior Indebtedness and the holders thereof with
respect to the Securities and the Holders thereof by a lawful plan or
reorganization under applicable bankruptcy law),
(1) the holders of all Senior Indebtedness shall be entitled
to receive payment in full of the principal thereof, premium, if
any, interest or additional amounts required in respect of certain
taxes, and any interest thereon, due thereon before the Holders of
the Securities are entitled to receive any payment upon the
principal, premium, interest or Additional Amounts of or on the
Securities or interest on overdue amounts thereof; and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article Eleven shall be
paid by the liquidating trustee or agent or other person making
such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the principal of,
premium, if any, interest or additional amounts required in respect
of certain taxes, and any interest thereon, on the Senior
Indebtedness held or represented by each, to the extent necessary
to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, shall be
received by the Trustee or the Holders of the Securities before all
Senior Indebtedness is paid in full, such payment or distribution
shall be paid over to the holders of such Senior Indebtedness or
their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing
any of such Senior Indebtedness may have been issued, ratably as
aforesaid, for application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to Senior Indebtedness
until the principal, premium, interest or Additional Amounts, and any
interest thereon, of or on the Securities shall be paid in full and no
such payments or distributions to the Holders of the Securities of cash,
property or securities otherwise distributable to the Senior
Indebtedness shall, as between the Company, its creditors other than the
holders of Senior Indebtedness, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the
Securities. It is understood that the provisions of this Article Eleven
are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the
holders of Senior Indebtedness, on the other hand. Nothing contained in
this Article Eleven or elsewhere in this Indenture or in the Securities
is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is unconditional and
absolute, to pay to the Holders of the Securities the principal,
premium, interest or Additional Amounts, and any interest thereon, of or
on the Securities as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the
Holders of the Securities and creditors of the Company other than the
holders of Senior Indebtedness, nor shall anything herein or in the
Securities prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article Eleven of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any
such remedy. Upon any payment or distribution of assets of the Company
referred to in this Article Eleven, the Trustee shall be entitled to
conclusively rely upon a certificate of the liquidating trustee or agent
or other person making any distribution to the Trustee for the purpose
of ascertaining the persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon, and all other facts pertinent
thereto or to this Article Eleven.
The Trustee, however, shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness. The Trustee shall not be liable
to any such holder if it shall pay over or distribute to or on behalf of
Holders of Securities or the Company moneys or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this
Article Eleven. The rights and claims of the Trustee under Section 607
shall not be subject to the provisions of this Article Eleven.
If the Trustee or any Holder of Securities does not file a proper
claim or proof of debt in the form required in any proceeding referred
to above prior to 30 days before the expiration of the time to file such
claim in such proceeding, then the holder of any Senior Indebtedness is
hereby authorized, and has the right, to file an appropriate claim or
claims for or on behalf of such Holder of Securities.
SECTION 1103. No Payment on Securities in Event of Default on
Senior Indebtedness.
No payment by the Company on account of principal, premium,
interest or Additional Amounts, and any interest thereon, of or on the
Securities shall be made unless full payment of amounts then due for
principal, premium, if any, sinking funds, and interest or Additional
Amounts on Senior Indebtedness has been made or duly provided for in
money or money's worth.
SECTION 1104. Payments on Securities Permitted.
Nothing contained in this Indenture or in any of the Securities
shall (a) affect the obligation of the Company to make, or prevent the
Company from making, at any time except as provided in Sections 1102 and
1103, payments of principal, premium, interest or Additional Amounts,
and any interest thereon, of or on the Securities or (b) prevent the
application by the Trustee of any moneys deposited with it hereunder to
the payment of or on account of the principal, premium, interest or
Additional Amounts, and any interest thereon, of or on the Securities
unless the Trustee shall have received at its Corporate Trust Office
written notice of any event prohibiting the making of such payment more
than two Business Days prior to the date fixed for such payment or prior
to the execution of an instrument to satisfy and discharge this
Indenture based upon the deposit of funds under Section 401(1)(B).
SECTION 1105. Authorization of Holders of Securities to Trustee to
Effect Subordination.
Each Holder of Securities by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in
this Article Eleven and appoints the Trustee his attorney-in-fact for
any and all such purposes.
SECTION 1106. Notices to Trustee.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee located at the Corporate Trust Office of the
Trustee of any fact known to the Company which would prevent the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provisions
of this Indenture, neither the Trustee nor any Paying Agent (other than
the Company) shall be charged with knowledge of the existence of any
Senior Indebtedness or of any event which would prohibit the making of
any payment of moneys to or by the Trustee or such Paying Agent, unless
and until the Trustee or such Paying Agent shall have received (in the
case of the Trustee, at its Corporate Trust Office) written notice
thereof from the Company or from the holder of any Senior Indebtedness
or from the trustee for any such holder, together with proof
satisfactory to the Trustee of such holding of Senior Indebtedness or of
the authority of such trustee; provided, however, that if at least two
Business Days prior to the date upon which by the terms hereof any such
moneys may become payable for any purpose (including, without
limitation, the payment of the principal, premium, interest or
Additional Amounts, of or on any Security, or any interest thereon) or
the date on which the Trustee shall execute an instrument acknowledging
satisfaction and discharge of this Indenture, the Trustee shall not have
received with respect to such moneys or the moneys deposited with it as
a condition to such satisfaction and discharge the notice provided for
in this Section 1106, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they
were received, and shall not be affected by any notice to the contrary,
which may be received by it on or after such two Business Days prior to
such date. The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a person representing himself to
be a holder of Senior Indebtedness (or a trustee on behalf of such
holder) to establish that such a notice has been given by a holder of
Senior Indebtedness or a trustee on behalf of any such holder. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to
this Article Eleven, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this
Article Eleven and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
SECTION 1107. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this
Article Eleven in respect of any Senior Indebtedness at any time held by
it to the same extent as any other holder of Senior Indebtedness and
nothing in Section 613 or elsewhere in this Indenture shall be construed
to deprive the Trustee of any of its rights as such holder.
SECTION 1108. Modification of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of
any of their rights under any instrument creating or evidencing Senior
Indebtedness, including without limitation the waiver of default
thereunder, may be made or done all without notice to or assent from
Holders of the Securities or the Trustee.
No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in
respect of, any liability or obligation under or in respect of, or of
any of the terms, covenants or conditions of any indenture or other
instrument under which any Senior Indebtedness is outstanding or of such
Senior Indebtedness, whether or not such release is in accordance with
the provisions of any applicable document, shall in any way alter or
affect any of the provisions of this Article Eleven or of the Securities
relating to the subordination thereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article.
Redemption of Securities of any series at the option of the Company
as permitted or required by the terms of such Securities shall be made
in accordance with the terms of such Securities and this Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Company Order. In case of any redemption at the election
of the Company of less than all of the Securities of any series with the
same issue date, interest rate and Stated Maturity, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed.
SECTION 1203. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series with the same issue
date, interest rate and Stated Maturity are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal
amount of Registered Securities of such series; provided, however, that
no such partial redemption shall reduce the portion of the principal
amount of a Registered Security of such series not redeemed to less than
the minimum denomination for a Security of that series established
pursuant to Section 302.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal of such Securities which has been
or is to be redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 106, not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities
to be redeemed, to the Holders of Securities to be redeemed. Failure to
give notice by mailing in the manner herein provided to the Holder of
any Registered Securities designated for redemption as a whole or in
part, or any defect in the notice to any such Holder, shall not affect
the validity of the proceedings for the redemption of any other
Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered
Securities in the manner herein provided shall be conclusively presumed
to have been duly given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Securities to
be redeemed,
(4) in case any Registered Security is to be redeemed in part
only, the notice which relates to such Security shall state that on
and after the Redemption Date, upon surrender of such Security, the
Holder of such Security will receive, without charge, a new
Registered Security or Registered Securities of authorized
denominations for the principal amount thereof remaining
unredeemed,
(5) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed, and,
if applicable, that interest thereon shall cease to accrue on and
after said date,
(6) the place or places where such Securities, together in
the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the
case.
A notice of redemption published as contemplated by Section 106
need not identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1205. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date)
accrued interest on and any Additional Amounts with respect thereto, all
the Securities or portions thereof which are to be redeemed on that
date.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price
and accrued interest) such Securities shall cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so
to be redeemed, except to the extent provided below, shall be void.
Upon surrender of any such Security for redemption in accordance with
said notice, together with all coupons, if any, appertaining thereto
maturing after the Redemption Date, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest (and any
Additional Amounts) to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable only upon
presentation and surrender of coupons for such interest (at an office or
agency located outside the United States except as otherwise provided in
Section 1002), and provided, further, that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption
Date, such Security may be paid after deducting from the Redemption
Price an amount equal to the face amount of all such missing coupons, or
the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to
the Trustee or any Paying Agent any such missing coupon in respect of
which a deduction shall have been made from the Redemption Price, such
Holder shall be entitled to receive the amount so deducted; provided,
however, that interest (and any Additional Amounts) represented by
coupons shall be payable only upon presentation and surrender of those
coupons at an office or agency located outside of the United States
except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 1207. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall
be surrendered at any office or agency of the Company maintained for
that purpose pursuant to Section 1002 (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in
writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Registered Security or Securities of the same series,
containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Security in global form is so
surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the U.S. Depository or other depository for
such Security in global form as shall be specified in the Company Order
with respect thereto to the Trustee, without service charge, a new
Security in global form in a denomination equal to and in exchange for
the unredeemed portion of the principal of the Security in global form
so surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series, except as otherwise
permitted or required by any form of Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of such series is herein
referred to as an "optional sinking fund payment". If provided for by
the terms of Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 1302.
Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of
such series.
SECTION 1302. Satisfaction of Sinking Fund Payments with
Securities.
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series to be made
pursuant to the terms of such Securities as provided for by the terms of
such series (1) deliver Outstanding Securities of such series (other
than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series
with all unmatured coupons appertaining thereto, and (2) apply as a
credit Securities of such series which have been redeemed either at the
election of the Company pursuant to the terms of such series of
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly. If as a result of
the delivery or credit of Securities of any series in lieu of cash
payments pursuant to this Section 1302, the principal amount of
Securities of such series to be redeemed in order to exhaust the
aforesaid cash payment shall be less than $100,000, the Trustee need not
call Securities of such series for redemption, except upon Company
Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall at the request of
the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon
delivery by the Company to the Trustee of Securities of that series
purchased by the Company having an unpaid principal amount equal to the
cash payment requested to be released to the Company.
SECTION 1303. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting of Securities of that series
pursuant to Section 1302, and the optional amount, if any, to be added
in cash to the next ensuing mandatory sinking fund payment, and will
also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an
optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay
the amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in
Section 1203 and cause notice of the redemption thereof to be given in
the name of and at the expense of the Company in the manner provided in
Section 1204. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1206 and 1207.
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in
accordance with the terms of the Securities of such series. The
repayment of any principal amount of Securities pursuant to such option
of the Holder to require repayment of Securities before their Stated
Maturity, for purposes of Section 309, shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by such
Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities
be cancelled. Notwithstanding anything to the contrary contained in
this Article Thirteen, in connection with any repayment of Securities,
the Company may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to the Holders of such Securities on
or before the close of business on the repayment date an amount not less
than the repayment price payable by the Company on repayment of such
Securities, and the obligation of the Company to pay the repayment price
of such Securities shall be satisfied and discharged to the extent such
payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a
meeting of Holders of Securities of such series may be called at any
time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given or
taken by Holders of Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501,
to be held at such time and at such place in the Borough of
Manhattan, The City of New York, or as the Trustee shall determine.
Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of
the Outstanding Securities of any series shall have requested the
Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have the first
publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or the
Holders of Securities of such series in the amount above specified,
as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such
meeting and may call such meeting for such purposes by giving
notice thereof as provided in subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of
any series, a Person shall be (1) a Holder of one or more Outstanding
Securities of such series, or (2) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more Outstanding
Securities of such series by such Holder or Holders. The only Persons
who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to
vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series; provided, however, that
if any action is to be taken at such meeting with respect to a consent
or waiver which this Indenture expressly provides may be given by the
Holders of a specified percentage in aggregate principal amount of the
Outstanding Securities of a series that is less or greater than a
majority in principal amount of the Outstanding Securities of such
series, then, with respect to such action (and only such action) the
Persons entitled to vote such lesser or greater percentage in principal
amount of the Outstanding Securities of such series shall constitute a
quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any
other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a
period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not
less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which
shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding
Securities of that series; provided, however, that, except as limited by
the proviso to Section 902, any resolution with respect to any consent
or waiver which this Indenture expressly provides may be given by the
Holders of not less than 66-2/3% in principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned
meeting duly convened and at which a quorum is present as aforesaid only
by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that,
except as limited by the proviso to Section 902, any resolution with
respect to any request, demand, authorization, direction, notice,
consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by
the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders
of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the
related coupons, whether or not present or represented at the meeting.
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of such series
in regard to proof of the holding of Securities of such series and
of the appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination or
proxies, certificates and other evidence of the right to vote, and
such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required
by any such regulations, the holding of Securities shall be proved
in the manner specified in Section 104 and the appointment of any
proxy shall be proved in the manner specified in Section 104 or by
having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine
without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Holders of Securities as provided
in Section 1502(b), in which case the Company or the Holders of
Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at
the meeting.
(c) At any meeting each Holder of a Security of such series
or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding
and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1402 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority
in principal amount of the Outstanding Securities of such series
represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or
of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities of such series held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of
all votes cast at the meeting. A record, at least in triplicate, of the
proceedings of each meeting of Holders of Securities of any series shall
be prepared by the secretary of the meeting and there shall be attached
to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section
1502 and, if applicable, Section 1504. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company, and
another to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein
stated.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 1601. Securities in Foreign Currencies.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any
series in which not all of such Securities are denominated in the same
currency, or (ii) any distribution to Holders of Securities, in the
absence of any provision to the contrary in the form of Security of any
particular series, any amount in respect of any Security denominated in
a currency other than United States dollars shall be treated for any
such action or distribution as that amount of United States dollars that
could be obtained for such amount on such reasonable basis of exchange
and as of the record date with respect to Registered Securities of such
series (if any) for such action, determination of rights or distribution
(or, if there shall be no applicable record date, such other date
reasonably proximate to the date of such action, determination of rights
or distribution) as the Company may specify in a written notice to the
Trustee or, in the absence of such written notice, as the Trustee may
determine.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture,
to be duly executed as of the day and year first above written:
ULTRAMAR DIAMOND SHAMROCK
CORPORATION
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
Attest:
/s/ PATRICK J. GUARINO
Patrick J. Gurarino, Secretary THE BANK OF NEW YORK,
as Trustee
By: /s/ WALTER GITLIN
Name: Walter Gitlin
Title: Vice President
EXHIBIT 4.4
This Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in
the name of The Depository Trust Company (the "Depositary") or a nominee
of the Depositary. This Trust Preferred Security is exchangeable for
Trust Preferred Securities registered in the name of a person other than
the Depositary or its nominee only in the limited circumstances
described in the Declaration and no transfer of this Trust Preferred
Security (other than a transfer of this Trust Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Deposi-
tary) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York), a New York corporation, to the Trust or its agent for
registration of transfer, exchange or payment, and any Trust Preferred
Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and
any payment hereon is made to Cede & Co. or such other entity as is re-
quested by an authorized representative of the Depositary, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
<PAGE>
TP-1 Aggregate Liquidation
Amount: $200,000,000
CUSIP NO. 902655208
Certificate Evidencing Trust Preferred Securities
of
UDS CAPITAL I
8.32% Trust Preferred Securities
(liquidation amount $25 per Trust Preferred Security)
UDS CAPITAL I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede
& Co. (the "Holder") is the registered owner of 8,000,000 preferred
securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 8.32% Trust
Preferred Securities (liquidation amount $25 per Trust Preferred Secu-
rity) (the "Trust Preferred Securities"). The Trust Preferred Securi-
ties are freely transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certifi-
cate duly endorsed and in proper form for transfer. The designation,
rights, powers, privileges, restrictions, preferences and other terms
and provisions of the Trust Preferred Securities represented hereby are
set forth in, issued under and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust dated as of
June 25, 1997, as the same may be amended from time to time (the "Decla-
ration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the
benefits of the Trust Preferred Securities Guarantee to the extent pro-
vided therein. Each Holder of a Trust Preferred Security, by acceptance
of this Certificate and each Certificate owner, by acquisition of a
beneficial interest in a Certificate, agrees to treat the Debentures,
and any other Affiliate Investment Instruments that are treated as debt
instruments by the relevant Investment Affiliate and by the Partnership,
as indebtedness for United States federal income tax purposes. The
Sponsor will provide a copy of the Declaration, the Trust Preferred
Securities Guarantee and the Limited Partnership Agreement to a Holder
without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 25th day of June, 1997.
UDS CAPITAL I
/s/ STEVE BLANK
Steve Blank,
as Regular Trustee
CERTIFICATE OF AUTHENTICATION
This is the Trust Preferred Security described in the within-mentioned
Declaration.
THE BANK OF NEW YORK,
as Trustee
By: /s/ WALTER GITLIN,
Vice President
Authorized Signatory
Dated: June 25, 1997
(See reverse for additional terms)
<PAGE/>
<PAGE>
[REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.32% of the stated
liquidation amount of $25 per Trust Preferred Security. Distributions
on the Trust Preferred Securities shall, from the date of original
issue, accumulate and be cumulative and shall be payable quarterly only
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. Distributions not paid on the
scheduled payment date will accumulate and compound quarterly (to the
extent permitted by applicable law) at the rate of 8.32% per annum. The
term "Distributions" as used herein shall mean ordinary cumulative
distributions in respect of each Fiscal Period together with any such
Compounded Distributions. Amounts available to the Trust for distribu-
tion to the holders of the Trust Preferred Securities will be limited to
payments received by the Trust from the Partnership on the Partnership
Preferred Securities or from the Company on the Partnership Guarantee.
Distributions on the Partnership Preferred Securities will be paid only
if, as and when declared in the sole discretion of the Company, as the
General Partner of the Partnership. If and to the extent that the Part-
nership makes a distribution on the Partnership Preferred Securities
held by the Property Trustee or the Company makes a payment under the
Partnership Guarantee (the amount of any such partnership distribution,
including any compounded partnership distributions or guarantee payment
being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are available for that purpose, to make a
Pro Rata Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period on the basis of the actual number of days
elapsed in a 90-day quarter.
Except as otherwise described herein, distributions on the Trust
Preferred Securities will be cumulative, will accumulate from the date
of initial issuance and will be payable quarterly in arrears, on March
31, June 30, September 30 and December 31 of each year, commencing on
June 30, 1997, if, as and when available for payment by the Property
Trustee. If the Trust Preferred Securities (or, if the Trust is
liquidated, the Partnership Preferred Securities) are in book-entry-only
form, Distributions will be payable to the Holders of record of Trust
Preferred Securities as they appear on the books and records of the
Trust on the relevant record dates, which will be one Business Day prior
to the relevant payment dates. If the Trust Preferred Securities (or,
if the Trust is liquidated, the Partnership Preferred Securities) do not
remain in book-entry-only form, the relevant record dates shall be the
15th day of the month of the relevant payment dates. In the event that
any date on which distributions are payable is not a Business Day,
payment of such Distribution shall be made on the next succeeding day
which is a Business Day (without any interest or other payment in
respect of any such delay) except that, if such Business Day falls in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, with the same force and effect as if
made on such date. Payments of accumulated Distributions will be
payable to Holders of record of Trust Preferred Securities as they
appear on the books and records of the Trust on the record date with re-
spect to the payment date for the Trust Preferred Securities which
corresponds to the payment date fixed by the Partnership with respect to
the payment of cumulative distributions on the Partnership Preferred
Securities.
The Trust Preferred Securities shall be redeemable as provided
in the Declaration.
<PAGE/>
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to
transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Trust
Preferred Security Certificate)
Signature Guarantee (1):
(1) Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Registrar in addition to, or in substi-
tution for, STAMP, all in accordance with the Securities and Ex
change Act of 1934, as amended.
EXHIBIT 4.5
PP-1 Aggregate Liquidation
Preference: $206,186,000
Certificate Evidencing Partnership Preferred Securities
of
UDS FUNDING I, L.P.
8.32% Partnership Preferred Securities
(liquidation preference $25 per Partnership Preferred Security)
UDS FUNDING I, L.P., a limited partnership formed under the laws of
the State of Delaware (the "Partnership"), hereby certifies that The
Bank of New York, a property trustee pursuant to the Amended and Re-
stated Declaration of Trust of UDS Capital I, dated as of June 25, 1997
(the "Holder") is the registered owner of 8,247,440 preferred securities
of the Partnership representing limited partner interests in the
Partnership designated the 8.32% Partnership Preferred Securities (liq-
uidation preference $25 per Partnership Preferred Security) (the "Part-
nership Preferred Securities"). The Partnership Preferred Securities
are freely transferable on the books and records of the Partnership, in
person or by a duly authorized attorney, upon surrender of this certifi-
cate duly endorsed and in proper form for transfer. The designation,
rights, powers, privileges, restrictions, preferences and other terms
and provisions of the Partnership Preferred Securities represented
hereby are set forth in, issued under and shall in all respects be
subject to the provisions of the Amended and Restated Agreement of
Limited Partnership dated as of June 25, 1997, as the same may be
amended from time to time (the "Partnership Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in
the Partnership Agreement. The Holder is entitled to the benefits of
the Partnership Guarantee to the extent provided therein. The
Partnership will provide a copy of the Partnership Agreement and the
Partnership Guarantee to a Holder without charge upon written request to
the Partnership at its principal place of business.
Upon receipt of this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Partnership Agreement
and is entitled to the benefits thereunder. Each Holder of a
Partnership Preferred Security, by acceptance of this Certificate and
each Certificate owner, by acquisition of a beneficial interest in a
Certificate, agrees to treat the Debentures, and any other Affiliate
Investment Instruments that are treated as debt instruments by the
relevant Investment Affiliate and by the Partnership, as indebtedness
for United States federal income tax purposes.
IN WITNESS WHEREOF, the Partnership has executed this certificate
this 25th day of June, 1997.
UDS FUNDING I, L.P.
By: ULTRAMAR DIAMOND SHAMROCK
CORPORATION,
as General Partner
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
(See reverse for additional terms)
[REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of 8.32% of the stated liquidation
preference of $25 per Partnership Preferred Security. Distributions not
paid on the scheduled payment date will accumulate and compound quar-
terly (to the extent permitted by applicable law) at the rate of 8.32%
per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with
any such Compounded Distributions. Distributions on the Partnership
Preferred Securities will only be made to the extent that the Part-
nership has funds legally available for the payment of such distribu-
tions. Amounts available to the Partnership for Distribution to the
holders of the Partnership Preferred Securities will be limited to pay-
ments received by the Partnership from the Company and certain wholly
owned subsidiaries on the Initial Debentures and Affiliate Investment
Instruments or from the Company on the Partnership Guarantee or on the
Eligible Debt Securities. Distributions on the Partnership Preferred
Securities will be paid only if, as and when declared in the sole
discretion of the Company, as the General Partner of the Partnership.
The amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period on the basis of the actual number of days elapsed in
a 90-day quarter.
Except as otherwise described herein, Distributions on the
Partnership Preferred Securities will be cumulative, will accumulate
from the date of initial issuance and will be payable quarterly in
arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on June 30, 1997, if, as and when declared by the
General Partner in its sole discretion. If the Trust Preferred Securi-
ties (or, if the Trust is liquidated, the Partnership Preferred Securi-
ties) are in book-entry-only form, Distributions will be payable to the
Holders of record of Partnership Preferred Securities as they appear on
the books and records of the Partnership on the relevant record dates,
which will be one Business Day prior to the relevant payment dates. If
the Trust or the Property Trustee is the Holder of the Partnership Pre-
ferred Securities, all Distributions of cash shall be made by wire
transfer of same day funds to such Holder by 10:00 a.m., New York City
time, on the applicable Distribution Payment Date. Distributions pay-
able on any Partnership Preferred Securities that are not punctually
paid on any Distribution Payment Date will cease to be payable to the
Person in whose name such Partnership Preferred Securities are regis-
tered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securi-
ties are registered on the special record date or other specified date
for payment of such defaulted or accumulated Distribution. If the Trust
Preferred Securities (or, if the Trust is liquidated, the Partnership
Preferred Securities) are not in book-entry-only form, the relevant
record dates shall be the 15th day of the month of the relevant payment
dates. In the event that any date on which Distributions are payable is
not a Business Day, payment of such Distribution shall be made on the
next succeeding day which is a Business Day (without any interest or
other payment in respect of any such delay) except that, if such Busi-
ness Day falls in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
The Partnership Preferred Securities shall be redeemable as
provided in the Partnership Agreement.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Partnership Preferred Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to
transfer this Partnership Preferred Security Certificate on the books of
the Partnership. The agent may substitute another to act for him or
her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Partnership
Preferred Security Certificate)
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
<PAGE>
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-
antee.
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 101
Barclay Street, Floor 21 West, New York, New York 10286.
"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. Pete Smith, 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, nomi
nees 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
9830 Colonnade Boulevard
San Antonio, Texas 78230
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/ STEVE BLANK
Name: Steve Blank
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as
Trust Preferred Guarantee Trustee
By: /s/ WALTER GITLIN
Name: Walter Gitlin
Title: Vice President
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
<PAGE>
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
9830 Colonnade Boulevard
San Antonio, Texas 78230
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/ STEVE BLANK
Name: Steve Blank
Title: Vice President and Treasurer
EXHIBIT 4.8
No. CD-1 Aggregate Principal
Amount: $206,186,000
Certificate Evidencing Debenture
of
ULTRAMAR DIAMOND SHAMROCK CORPORATION
8.32% Subordinated Debenture Due 2017
ULTRAMAR DIAMOND SHAMROCK CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware (herein
called the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to UDS FUNDING I, L.P., or registered assigns, the
principal sum of two hundred six million one hundred eighty-six dollars
($206,186,000) on June 30, 2017 and to pay interest on said principal
sum from June 25, 1997 or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on March 31, June 30, September 30 and December 31 of
each year, commencing June 30, 1997, at the rate of 8.32% per annum plus
Additional Interest, if any, until the principal hereof shall have
become due and payable, and on any overdue principal. The amount of
interest payable for any period will be computed on the basis of a 360-day year
of twelve 30-day months or, for any period shorter than a full
three months, on the basis of the actual number of days elapsed in such
period. In the event that any date on which interest is payable on this
Security is not a Business Day, then a payment of the interest payable
on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
the date the payment was originally payable. A "Business Day" shall
mean any day other than a day on which banking institutions in The City
of New York are authorized or required by law to close. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of
business on the Regular Record Date for such interest installment, which
shall be the close of business on the Business Day next preceding such
Interest Payment Date. Any such interest installment not so punctually
paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person
in whose name this security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture.
The Company shall have the right at any time during the term
of this Security, from time to time, to extend the interest payment
period of such Security for a period not exceeding six consecutive
quarters from the date of issue or the most recent date that interest
has been paid or been duly provided for (an "Extension Period"). During
any Extension Period, interest will compound quarterly and the Company
shall have the right to make partial payments of interest on any
Interest Payment Date. At the end of any Extension Period the Company
shall pay all interest then accrued and unpaid (together with Additional
Interest thereon to the extent that payment of such interest is
permitted by applicable law). "Additional Interest" means interest that
shall accrue on any interest on the Securities that is in arrears for
more than one quarter or not paid during an Extension Period, which in
either case shall accrue at 8.32% per annum compounded quarterly. Prior
to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions thereof shall not
exceed six consecutive quarters or extend beyond the Maturity of this
Security. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest
then due, the Company may select a new Extension Period, subject to the
foregoing requirements. No interest shall be due and payable during an
Extension Period except at the end thereof and no default under this
security or Event of Default shall be deemed to occur solely as a result
of an Extension Period. The Company shall give the Holder of this
Security and the Trustee notice of its selection of an Extension Period
at least one Business Day prior to the earlier of (i) the Interest
Payment Date or (ii) the date UDS Capital I is required to give notice
to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Trust Preferred Securities of the
record date or the date such distributions are payable, but in any event
not less than one Business Day prior to such record date.
If (a) an Event of Default has occurred and is continuing or
(b) the Company has exercised its right to extend the interest payment
period of the Security and such Extension Period is continuing, then
during such period (i) the Company 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
dated as of June 25, 1992, as amended, between the Company and Registrar
and Transfer Company, or any successor to such Rights Agreement and the
issuance of common stock pursuant to such rights) and (ii) the Company
shall not make, permit any Finance Subsidiary (as defined below) to
make, or 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. "Finance Subsidiary" means any
wholly-owned subsidiary of the Company the principal purpose of which is
to raise capital for the Company by issuing securities that are
guaranteed by the Company and the proceeds of which are loaned to or
invested in the Company or one or more of its affiliates.
Payment of the principal of and interest on this Security will
be made at the office or agency of the Company maintained for that
purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of
the Company payment of interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in
the Security Register or (ii) by wire transfer in immediately available
funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Security Register.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness, and this
Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all
notice of the acceptance of the subordination provisions contained
herein and in the Indenture of each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by
each such holder upon said provisions.
Reference is hereby made to the further provisions of the
Indenture summarized on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Ultramar Diamond Shamrock Corporation has
caused this instrument to be duly executed.
Dated: June 25, 1997
ULTRAMAR DIAMOND SHAMROCK CORPORATION
By: /s/ STEVE BLANK
Name: Steve Blank
Title: Vice President and
Treasurer
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: June 25, 1997 By: /s/ WALTER GITLIN
Authorized Signatory
Reverse of Security.
This Security is one of a duly authorized issue of Securities
of the Company, designated as its 8.32% Subordinated Debentures Due 2017
(herein called the "Securities"), limited in aggregate principal amount
to $206,186,000 issued under an Indenture, dated as of June 25, 1997
(herein called the "Indenture"), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the securities are, and are to
be, authenticated and delivered.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
At any time on or after June 30, 2002, the Company shall have
the right to redeem the Securities, in whole or in part, from time to
time, at a Redemption Price equal to 100% of the principal amount of
Securities to be redeemed plus accrued but unpaid interest, including
any Additional Interest, if any, to the Redemption Date.
If, at any time, a Partnership Tax Event or a Partnership
Investment Company Event (each a "Partnership Special Event") shall
occur and be continuing, the Company may, within 90 days following the
occurrence of such Partnership Special Event, elect to redeem the
Securities in whole (but not in part), upon not less than 30 or more
than 60 days notice at the Redemption Price, provided that, if at the
time there is available to the Company or the Partnership the
opportunity to eliminate, within such 90-day period, the Partnership
Special Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable such
measure that in the sole judgment of the Company has or will cause no
adverse effect on the Partnership, the Trust or the Company, and will
involve no material cost, the Company will pursue such measure in lieu
of redemption.
"Partnership Investment Company Event" means that Ultramar
Diamond Shamrock Corporation, in its capacity as general partner of UDS
Funding I, L.P. (the "Partnership"), shall have requested and received
an opinion of independent legal counsel experienced in such matters to
the effect that as a result of the occurrence on or after June 20, 1997
of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, the Partnership is or will
be considered an "investment company" which is required to be registered
under the Investment Company Act of 1940.
"Partnership Tax Event" means that Ultramar Diamond Shamrock
Corporation in its capacity as general partner of the Partnership, shall
have requested and received an opinion of independent tax counsel
experienced in such matters to the effect that there has been a Tax
Action which affects any of the events described in (i) through (iii)
below and that there is more than an insubstantial risk that (i) the
Partnership is, or will be subject to United States federal income tax
with respect to income accrued or received on the Affiliate Investment
Instruments or the Eligible Debt Securities (each as defined in the
Limited Partnership Agreement), (ii) the Partnership is, or will be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by one or more of the
obligors with respect to the Affiliate Investment Instruments (as
defined in the Amended and Restated Agreement of Limited Partnership of
UDS Funding I, L.P.) to the Partnership is not, or will not be,
deductible by the Company for United States federal income tax purposes.
"Tax Action" means (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof
or therein, (b) a judicial decision interpreting, applying or clarifying
such laws or regulations, (c) an administrative pronouncement or action
that represents an official position (including a clarification of an
official position) of the governmental authority or regulatory body
making such administrative pronouncement or taking such action, or (d) a
threatened challenge asserted in connection with an audit of the Company
or any of its subsidiaries, the Partnership, or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that
has raised capital through the issuance of securities that substantially
similar to the Securities, the Partnership Preferred Securities, or the
Trust Preferred Securities, which amendment or change is adopted or
which decision, pronouncement or proposed change is announced or which
action, clarification or challenge occurs on or after the date of the
prospectus related to the issuance of the Trust Preferred Securities.
"Limited Partnership Agreement" means the amended and restated
agreement of Limited Partnership, dated as of June 25, 1997, of the
Partnership as amended, modified or otherwise supplemented from time to
time. If the Securities are only partially redeemed by the Company, the
Securities will be redeemed pro rata, by lot or in such other manner as
the Trustee shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to
twenty-five U.S. dollars ($25) or any integral multiple thereof) of the
principal amount of any Security.
In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Securities shall
occur and be continuing, the principal of the Securities may be declared
due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and
discharge at any time of the entire indebtedness of this Security upon
compliance by the Company with certain conditions set forth in the
Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, to modify the
Indenture in a manner affecting the rights of the Holders of the
Securities; provided that no such modification may, without the consent
of the Holder of each Outstanding Security, (i) extend the fixed
maturity of the Securities, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, or (ii) reduce
the percentage of principal amount of the Securities, the Holders of
which are required to consent to any such modification of the Indenture.
The Indenture also contains provisions permitting Holders of specified
percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all Securities, to waive
compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in
New York, New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any of their respective agents
may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security shall be
overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
The Securities are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate principal amount
of Securities of a different authorized denomination, as requested by
the Holder surrendering the same.
THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
EXHIBIT 99.1
TOTAL ACQUISITION AND PRO FORMA FINANCIAL DATA
On April 15, 1997, UDS (the "Company") entered into a
definitive Arrangement Agreement (the "Arrangement") to acquire
Total Petroleum (North America) Ltd. ("Total"), a Denver, Colorado
based petroleum refining and marketing company. The Agreement
provides for the issuance of 0.322 shares of UDS Common Stock for
each outstanding share of Total Common Stock. The Company expects
to issue approximately 13.0 million shares of UDS Common Stock and
will assume approximately $490.0 million of Total debt. The
transaction is subject to the approval of Total shareholders,
completion of due diligence and customary approvals, including
approval by the Federal Trade Commission (the "FTC") under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"). The Company has made the requisite initial filing with the
FTC under the HSR Act with respect to the proposed Total
transaction. The FTC had made a request for additional information
from the Company concerning such transaction, which the Company
intends to provide. The transaction is expected to be completed by
the end of the third quarter of 1997. Total has approximately
6,000 employees and operates refineries in Ardmore, Oklahoma, Alma,
Michigan, and Denver, Colorado. The three refineries have a
combined throughput capacity of approximately 150,000 barrels of
crude oil per day. Total distributes gasoline and merchandise
through approximately 2,100 branded outlets concentrated around its
refineries in the central United States, of which approximately 560
are company-operated.
Pro Forma Financial Data Reflecting Total Acquisition
The following pro forma consolidated financial data, which was
included in the May 26, 1997 Management Proxy Circular (the "Proxy
Circular") furnished by Total to its shareholders in connection
with the Special Meeting of Shareholders called for the purpose of
obtaining approval of the Arrangement, gives effect to the
Arrangement as if it occurred on March 31, 1997 or December 31,
1996, in the case of the pro forma balance sheet data, and on
January 1, 1996, in the case of the pro forma income statement
data.
The Arrangement will be accounted for by the Company using the
purchase method of accounting. In connection therewith, the
purchase price will be allocated to the assets and liabilities of
Total as of the effective date of the acquisition, and the results
of operations of Total will be included in the Company's results of
operations thereafter. The purchase price has been allocated in
the pro forma entries based on Total management's estimates of the
fair values of the assets and liabilities of Total available as of
the date of the Proxy Circular and, in some instances, the effects
of conforming Total accounting practices to those of the Company.
Following the consummation of the Arrangement, such allocation will
be reflected in the consolidated balance sheet of the Company in
accordance with information then available, which could be
materially different from the estimates reflected herein. Among
other things, based on information available to the Company as of
the date of the Proxy Circular, the Company anticipated that the
application of its accounting practices would require that it
establish certain additional reserves (estimated at approximately
$50 million on a pre-tax basis), principally relating to future
environmental costs for the acquired properties. As additional
information becomes available, adjustments to the Company's
consolidated financial statements may be necessary which could,
among other things, result in an increased allocation of costs to
assets acquired in the Arrangement, including goodwill.
The financial data should be read in conjunction with the
historical financial statements of Total including the notes
thereto included in Total's Report on Form 10-K for the year ended
December 31, 1996 and Total's Report on Form 10-Q for the Quarter
ended March 31, 1997, each of which is on file with the Securities
and Exchange Commission and the historical financial statements of
the Company including the notes thereto included in the Company's
10-K and 10-Q each of which is incorporated by reference herein.
The pro forma financial data is based on various assumptions and is
not necessarily indicative of the results that actually would have
occurred had the Arrangement been consummated on the dates
indicated or that may occur in the future.
CERTAIN PROFORMA FINANCIAL STATEMENTS
ULTRAMAR DIAMOND SHAMROCK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1997
(Unaudited, in millions
Company Total Pro Forma Company Pro
Historical Historical Adjustments Forma
ASSETS
Cash and cash
equivalents $ 99.4 $ 12.4 $ - $ 111.8
Accounts and notes
receivable 434.9 204.1 - 639.0
Inventories 543.4 178.3 17.0 738.7
Deferred income taxes 32.0 - 19.1 51.1
Prepaid expenses and
other current assets 39.3 39.8 (19.3) 59.8
Total current assets 1,149.0 434.6 16.8 1,600.4
Property, plant and
equipment, net 2,697.3 829.8 (11.7) 3,515.4
Other assets 282.0 32.3 69.9 384.2
$4,128.3 $1,296.7 $ 75.0 $5,500.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 397.2 $ 287.0 $ - $ 684.2
Accrued liabilities 287.7 28.1 47.0 362.8
Notes payable and
current portion of
long-term debt 9.9 - - 9.9
Taxes other than income
taxes 194.4 46.8 - 241.2
Income taxes 30.3 - - 30.3
Total current liabi-
lities 919.5 361.9 47.0 1,328.4
Long-term debt 1,579.8 486.1 - 2,065.9
Deferred income taxes 80.3 11.1 (17.3) 74.1
Other 304.7 68.4 18.5 391.6
Total liabilities 2,884.3 927.5 48.2 3,860.0
Stockholders' equity:
Common Stock 0.7 353.2 (353.1) 0.8
Additional paid-in
capital 1,138.1 79.7 316.2 1,534.0
ESOP, treasury stock
and other (32.2) - - (32.2)
Foreign currency
translation adjust-
ments (62.2) - - (62.2)
Retained earnings 199.6 (63.7) 63.7 199.6
Total stockholders'
equity 1,244.0 369.2 26.8 1,640.0
$4,128.3 $1,296.7 $75.0 $5,500.0
See accompanying Notes to Pro Forma Financial Data.
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1996
(Unaudited, in millions)
Company Total Pro Forma Company
Historical Historical Adjustments Pro Forma
ASSETS
Cash and cash equiva-
lents $ 197.9 $ 13.0 $ - $ 210.9
Accounts and notes
receivable 503.1 188.3 - 691.4
Inventories 633.3 161.7 47.0 842.0
Deferred income taxes 30.0 - 6.5 36.5
Prepaid expenses and
other current assets 35.0 38.4 (19.3) 54.1
Total current assets 1,399.3 401.4 34.2 1,834.9
Property, plant and
equipment, net 2,730.8 835.2 (11.7) 3,554.3
Other assets 289.9 31.7 37.8 359.4
$4,420.0 $1,268.3 $ 60.3 $5,748.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 540.7 $ 282.9 $ - $ 823.6
Accrued liabilities 328.9 38.2 43.9 411.0
Notes payable and current
portion of long-term
debt 3.2 - - 3.2
Taxes other than income
taxes 191.3 49.7 - 241.0
Income taxes 32.1 - - 32.1
Total current liabi-
lities 1,096.2 370.8 43.9 1,510.9
Long-term debt 1,646.3 428.0 - 2,074.3
Deferred income taxes 87.0 20.1 (15.9) 91.2
Other 349.6 67.2 18.5 435.3
Total liabilities 3,179.1 886.1 46.5 4,111.7
Stockholders' equity:
Common Stock 0.7 353.1 (353.0) 0.8
Additional paid-in
capital 1,137.0 79.7 316.2 1,532.9
ESOP, treasury stock
and other (32.2) - - (32.2)
Foreign currency trans-
lation adjustments (58.3) - - (58.3)
Retained earnings 193.7 (50.6) 50.6 193.7
Total stockholders'
equity 1,240.9 382.2 13.8 1,636.9
$4,420.0 $1,268.3 $60.3 $5,748.6
See accompanying Notes to Pro Forma Financial Data.
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
March 31, 1997
(Unaudited, in millions except per share data)
Company Total Pro Forma Company
Historical Historical Adjustments Pro Forma
Sales and other revenues $ 2,550.2 $ 554.2 $ 165.1 $3,269.5
Operating costs and expenses:
Costs of products sold
and operating - 540.5 (540.5) -
Costs of products sold 1,649.7 - 458.8 2,108.5
Operating expenses 210.2 - 68.6 278.8
Selling, general and
administrative expenses 72.0 11.6 4.4 88.0
Taxes other than income
taxes 509.2 - 170.7 679.9
Depreciation and amorti-
zation 44.2 15.8 1.9 61.9
Total operating costs
and expenses 2,485.3 567.9 163.9 3,217.1
Operating income 64.9 (13.7) 1.2 52.4
Interest income 2.4 - - 2.4
Interest expense (32.5) (7.1) - (39.6)
Gain on sale of
assets 11.0 - - 11.0
Income (loss) before
income taxes 45.8 (20.8) 1.2 26.2
Income tax (benefit)
expense 18.2 (8.9) 0.5 9.8
Net (loss) income 27.6 (11.9) 0.7 16.4
Dividend requirement
on preferred stock 1.1 - - 1.1
Net income (loss)
applicable to common
shares $ 26.5 $ (11.9) $ 0.7 $ 15.3
Earnings (loss) per share
Income (loss) per common share:
Primary:
Net income (loss) $ 0.35 $ (0.30) $ 0.17
Fully diluted:
Net income (loss) $ 0.35 $ (0.30) $ 0.17
Weighted average number of shares used in computation
(in thousands)
Primary 75,561 39,114 88,156
Fully diluted 79,049 39,114 91,644
See accompanying Notes to Pro Forma Financial Data.
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
December 31, 1996
(Unaudited, in millions except per share data)
Company Total Pro Forma Company
Historical Historical Adjustments Pro Forma
Sales and other revenues $ 10,208.4 $ 2,614.3 $ 719.1 $13,541.8
Operating costs and expenses:
Costs of products
sold and operating - 2,486.8 (2,486.8) -
Costs of products
sold 6,550.0 - 2,143.0 8,693.0
Operating expenses 928.1 - 290.8 1,218.9
Selling, general and
administrative ex-
penses 302.0 52.3 17.2 371.5
Taxes other than in-
come taxes 2,101.1 - 738.1 2,839.2
Depreciation and
amortization 179.9 60.8 6.2 246.9
Merger and integration
costs 77.4 - - 77.4
Total operating costs
and expenses 10,138.5 2,599.9 708.6 13,447.0
Operating income 69.9 14.4 10.5 94.8
Interest income 18.4 18.4
Interest expense (128.5) (26.6) - (155.1)
Income (loss) before
income taxes (40.2) (12.2) 10.5 (41.9)
Income tax (benefit)
expense (4.3) (6.8) 4.0 (7.1)
Net (loss) income (35.9) (5.4) 6.5 (34.8)
Dividend requirement
on preferred stock 4.3 - - 4.3
Net income (loss)
applicable to common
shares $ (40.2) $ (5.4) $ 6.5 $ (39.1)
Earnings (loss) per share
Income (loss) per common share:
Primary:
Net income (loss) $ (0.54) $ (0.14) $ (0.45)
Fully diluted:
Net income (loss) $ (0.54) $ (0.14) $ (0.45)
Weighted average number of shares used in computation
(in thousands)
Primary 74,427 38,913 86,957
Fully diluted 74,427 38,913 86,957
See accompanying Notes to Pro Forma Financial Data.
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NOTES TO PRO FORMA FINANCIAL DATA
Note 1-Basis of Presentation
The unaudited income statement data were prepared using the Company's
and Total's audited income statements for the year ended December 31, 1996 and
unaudited income statements for the three month period ended March 31, 1997
and the reclassifications and adjustments described below. The unaudited
pro forma balance sheet data were prepared using the Company's and Total's
audited balance sheets dated December 31, 1996 and unaudited balance sheets
dated March 31, 1997 and the adjustments and assumptions described below.
Note 2-Reclassifications
Certain pro forma reclassifications have been made to the audited
consolidated financial statements of Total to conform with the financial
presentation of the Company.
For the unaudited pro forma income statement data, federal excise and state
motor fuel taxes of Total have been included in sales and other revenues and
taxes other than income taxes. Additionally, cost of products sold
and operating expenses of Total have been reclassified to appropriate
categories used by the Company.
Note 3-Pro Forma Adjustments
Inventories-Total's inventories of crude oil and products have been
adjusted from the lower of cost or net realizable value as determined by
the last-in, first-out method of accounting to fair market value.
Property, Plant and Equipment-Pro forma adjustments have been
made for Total to account for refinery maintenance turnaround costs under
the deferral and amortization method versus the accrual method, to conform to
the financial presentation of the Company.
Retiree Health Care Benefits-Total adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employer's Accounting for
Postretirement Benefits other than Pensions," by recognizing an unfunded
obligation and a corresponding asset for the actuarial present value of
estimated benefits attributed to participant service rendered through
January 1, 1993. Total was amortizing this transition asset over 20 years.
For the unaudited pro forma financial data, this transition asset has been
eliminated and the corresponding expense has been appropriately adjusted.
Other Balance Sheet Adjustments-Pro forma adjustments to various assets
and liabilities have been made for the effect of the Company's intentions of
merging the operations of Total into the Company. Valuation adjustments have
been provided for anticipated changes in operations and brands, as well as
duplicate information technology and facilities.
Expenses of the Merger-Expenses incurred in connection with the
Arrangement are considered part of the cost of Total being purchased and
will be capitalized. These expenses primarily consist of financial
advisory fees, outside legal, accounting and professional fees, and
one-time costs of severance and other benefit payments to employees of
Total that will result from the elimination of certain operational and
administrative functions. These expenses are estimated to be approximately
$30.0 million and have been reflected in the pro forma financial data. The
pro forma financial data do not include any cost savings expected to occur
as a result of the Arrangement.
Income Taxes-A deferred income tax benefit has been provided
in the unaudited pro forma financial data, representing the income tax
effect on the pro forma financial data adjustments, calculated at a combined
federal and state rate of 38%.
Goodwill-The aggregate effect of the pro forma balance sheet
adjustments resulted in pro forma increases of $44.9 million and $80.6 million
in goodwill at December 31, 1996 and March 31, 1997, respectively, which is
included in other assets. Goodwill will be amortized over 20 years and the pro
forma income statement data include an adjustment to reflect such amortization.
Stockholders' Equity-Pro forma adjustments to stockholders' equity
provide for the acquisition of each issued and outstanding Total Common
Share by a Canadian subsidiary of the Company in exchange for 0.322 of a
share of the Company's common stock under the Arrangement.
Earnings per Share-Pro forma earnings per share for the Company are
based on the historical weighted average number of common and common
equivalent shares outstanding for each company during the respective period
adjusted to reflect the changes in shares due to the Arrangement.
