Pricing Agreement
Lehman Brothers Inc.
As Representatives of the several
Underwriters named in Schedule I hereto,
3 World Financial Center
12th Floor
New York, New York 10285
June 20, 1996
Dear Sirs:
Diamond Shamrock, Inc. (the "Company") proposes, subject to
the term and conditions stated herein and in the Underwriting
Agreement Standard Provisions filed as an exhibit to the
Company's registration statement on Form S-3 (No. 33-59451) (the
"Underwriting Agreement"), to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities").
Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if
such provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Pricing
Agreement, provided that each representation and warranty with
respect to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as
of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of
the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms
defined in the Underwriting Agreement are used herein as therein
defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the
Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the and of Schedule II hereto.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters,
this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the
Underwiters and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters
is or will be pursuant to the authority set forth in a form of
Agreement and Underwriters, the form of which shall be submitted
to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority
of the signers thereof.
Very truly yours,
DIAMOND SHAMROCK, INC.
By: /s/ R. C. BECKER
R. C. Becker
Vice President and Treasurer
Accepted as of the date hereof:
LEHMAN BROTHERS INC.
By: /s/ ROBERT H. SWINDELL
Robert H. Swindell
On behalf of each of the underwriters
SCHEDULE I
Principal Amount of
Designated Securities
to be
Purchased
Underwriter
Lehman Brothers Inc................. $ 25,000,000.00
Chase Securities Inc................ $ 25,000,000.00
Morgan Stanley & Co................. $ 25,000,000.00
NationsBanc Capital Markets, Inc.... $ 25,000,000.00
Total............................... $100,000,000.00
SCHEDULE II
Title of Designated Securities:
7.65% Debentures due July 1, 2026
Aggregate principal amount:
$100,000,000
Price to Public:
99.845% of the principal amount of the Designated
Securities, plus accrued interest from June 25, 1996
to the date of Delivery.
Purchase Price by Underwriters:
99.195% of the principal amount of the Designated
Securities, plus accrued interest from June 25, 1996
to the date of Delivery.
Specified funds for payment of purchase price:
Same day funds
Indenture:
Indenture, dated as of December 15, 1989, between the
Company and The First National Bank of Chicago, as Trustee
Maturity:
July 1, 2026
Interest Rate:
7.65%
Interest Payment Dates:
Each July 1 and January 1, commencing January 1, 1997
Redemption Provisions:
The Designated Securities may not be redeemed prior to
maturity.
Sinking Fund Provisions:
No sinking fund provisions
Extendable Provisions:
The Designated Securities will be repayable on July 1, 2006,
at the option of the holders thereof, at 100% of their
principal amount, together with accrued interest to July 1,
2006.
Time of Delivery:
10 A.M., New York City time, June 25, 1996
Method of Delivery:
Delivery of the Designated Securities will be made through
the facilities of the Depository Trust Company.
Closing Location:
Offices of Simpson Thacher & Bartlett, 425 Lexington Avenue,
New York, New York 10017-3909
Name and addresses of Representatives:
Designed Representative: Lehman Brothers Inc.
Address for Notices, etc.: 3 World Financial Center
12th Floor
New York, New York 10285
W3164.TW