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.