<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1998
REGISTRATION NO.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
<TABLE>
<S> <C>
TEXACO CAPITAL INC. TEXACO INC.
(Exact name of Registrant (Exact name of Registrant and
as specified in its charter) Guarantor
as specified in its charter)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
51-0271861 74-1383447
(I.R.S. Employer Identification (I.R.S. Employer Identification
No.) No.)
CARL B. DAVIDSON, SECRETARY CARL B. DAVIDSON, VICE
PRESIDENT AND SECRETARY
1013 CENTRE ROAD 2000 WESTCHESTER AVENUE,
WILMINGTON, DELAWARE 19801 WHITE PLAINS, N.Y. 10650
(800) 927-9800 (914) 253-4000
(Address, including zip code, (Address, including zip code,
and telephone number, including and telephone number, including
area code, area code,
of Registrant's principal of Registrant's and Guarantor's
executive principal executive
offices and agent for service) offices and agent for service)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined by market conditions.
---------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE(A) REGISTRATION FEE
<S> <C> <C> <C> <C>
Guaranteed Debt Securities of Texaco Capital
Inc.............................................
Debt Securities of Texaco Inc.(b).................
Common Stock of Texaco Inc.(b)....................
Preferred Stock of Texaco Inc.(b).................
Depositary Shares of Texaco Inc.(b)...............
Warrants to Purchase Guaranteed Debt Securities,
Debt Securities of Texaco Inc., Common Stock or
Preferred Stock.................................
Guaranties by Texaco Inc. of Debt Securities(c)... (d) (d) $750,000,000 $221,250
</TABLE>
(a) Estimated solely for the purpose of calculating the registration fee.
Excludes an aggregate of $500,000,000 unsold Texaco Capital Inc. securities
and Texaco Inc. guaranties included in Registration Statement No. 33-63996
for which a registration fee was paid on June 7, 1993, which are covered by
the Prospectus included in this Registration Statement pursuant to Rule 429.
As a result, up to an aggregate of $1,250,000,000 of the Securities referred
to above may be sold pursuant to this Registration Statement.
(b) In addition to any Preferred Stock, Depositary Shares or Common Stock that
may be issued directly under this Registration Statement, there are being
registered hereunder an indeterminate number of shares of Preferred Stock,
Depositary Shares or Common Stock as may be issued upon conversion or
exchange of Debt Securities, Preferred Stock, Depositary Shares or Common
Stock, as the case may be. In addition, Common Stock of Texaco Inc. issued
under this Registration Statement will have Rights attached. No separate
consideration will be received for any shares of Preferred Stock, Depositary
Shares or Common Stock so issued upon conversion or exchange or for any
Rights issued in connection with Common Stock.
(c) No consideration will be received by Texaco Inc. for the Guaranties.
(d) Not applicable pursuant to Form S-3 General Instruction II(D) under the
Securities Act of 1933.
--------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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Pursuant to Rule 429 of the Securities Act of 1933, the prospectus included
in this Registration Statement also relates to certain unsold securities of
Texaco Capital Inc. and guaranties of Texaco Inc. registered under Registration
Statement No. 33-63996.
<PAGE>
SUBJECT TO COMPLETION DATED FEBRUARY 18, 1998
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. INFORMATION
CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
PROSPECTUS
TEXACO INC.
AND
TEXACO CAPITAL INC.
GUARANTEED DEBT SECURITIES
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
This Prospectus relates to the following securities:
(i) debt securities ("Debt Securities") to be issued by Texaco Capital
Inc. ("Texaco Capital"), which will be guaranteed by Texaco Inc. ("Texaco
Inc.");
(ii) debt securities to be issued by Texaco Inc. ("Texaco Inc. Debt
Securities");
(iii) common stock to be issued by Texaco Inc. ("Common Stock");
(iv) preferred stock to be issued by Texaco Inc. ("Preferred Stock");
(v) warrants to purchase Debt Securities, Texaco Inc. Debt Securities,
Common Stock or Preferred Stock ("Warrants") and
(vi) depositary shares relating to Preferred Stock ("Depositary Shares"
and together with Debt Securities, Texaco Inc. Debt Securities, Common Stock
and Preferred Stock, "Securities").
The specific terms of any such offering will be described in a supplement to
this Prospectus. The net proceeds from such offerings will not exceed
$1,250,000,000.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
Securities may be offered directly to investors, through dealers, through
underwriters, or through agents designated from time to time, as set forth in
the Prospectus Supplement. Net proceeds to Texaco Capital or Texaco Inc. will be
the purchase price in the case of a dealer, the public offering price less
discount in the case of an underwriter or the bid purchase price less commission
in the case of an agent--in each case less other expenses attributable to
issuance and distribution. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
This Prospectus and the Prospectus Supplement do not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make such offer in
such jurisdiction.
February , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where You Can Find More Information........................................................................ 2
Documents Incorporated by Reference........................................................................ 3
Texaco Inc. ............................................................................................... 3
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends... 4
Texaco Capital Inc. ....................................................................................... 4
Use of Proceeds............................................................................................ 4
Plan of Distribution....................................................................................... 4
Description of the Debt Securities......................................................................... 5
Description of Texaco Inc. Common Stock.................................................................... 11
Description of Texaco Inc. Preferred Stock................................................................. 11
Description of the Depositary Shares....................................................................... 14
Description of the Warrants................................................................................ 17
Experts.................................................................................................... 18
Legal Opinions............................................................................................. 18
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
Texaco Inc. is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). You may
read and copy any reports, statements or other information filed by Texaco at
the public reference rooms maintained by the SEC at its principal offices at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, in Washington, D.C. 20549
and its regional offices at Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300,
New York, New York 10048. Texaco's SEC filings are also available to the public
from commercial document retrieval services, from the Public Reference Section
of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates
and at the web site maintained by the SEC at "http://www.sec.gov". Such material
should also be available for inspection at the library of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
SEPARATE FINANCIAL INFORMATION FOR TEXACO CAPITAL IS NOT INCLUDED HEREIN AND
WILL NOT BE INCLUDED IN ANY REPORTS FILED PURSUANT TO THE EXCHANGE ACT, AS
TEXACO CAPITAL IS WHOLLY OWNED BY TEXACO INC., IT ESSENTIALLY HAS NO INDEPENDENT
OPERATIONS, AND ANY DEBT SECURITIES ISSUED BY TEXACO CAPITAL WILL BE FULLY AND
UNCONDITIONALLY GUARANTEED BY TEXACO INC.
------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS
PROSPECTUS. NEITHER TEXACO CAPITAL NOR TEXACO INC. HAS AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS
PROSPECTUS. THIS PROSPECTUS IS DATED FEBRUARY 18, 1998. YOU SHOULD NOT ASSUME
THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE
OTHER THAN SUCH DATE AND NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE
ISSUANCE OF ANY SECURITIES UNDER IT SHALL CREATE ANY IMPLICATION TO THE
CONTRARY.
2
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The SEC rules allow Texaco to "incorporate by reference" information into
this Prospectus, which means important information may be disclosed to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this Prospectus, except for
any information superseded by information in (or incorporated by reference in)
this Prospectus. This Prospectus incorporates by reference the documents set
forth below that have been previously filed with the SEC. These documents
contain important information about Texaco and its finances.
<TABLE>
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TEXACO SEC FILINGS (FILE NO. I-27) PERIOD
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<S> <C>
Annual Report on Form 10-K.............................. Year ended December 31, 1996.
Quarterly Reports on Form 10-Q.......................... Quarters ended September 30, 1997, June 30, 1997 and
March 31, 1997.
Current Reports on Form 8-K............................. Filed January 30, 1998; January 23, 1998; November 6,
1997; October 21, 1997; August 19, 1997; July 25,
1997; July 22, 1997; July 17, 1997; June 19, 1997;
April 22, 1997; March 19, 1997; January 29, 1997;
January 23, 1997; January 7, 1997.
</TABLE>
Texaco is also incorporating by reference additional documents that it may
file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act between the date of this Prospectus and the termination of the offering
described in this Prospectus.
You can obtain copies of any of the documents described above through Texaco
or the SEC. Documents incorporated by reference are available from Texaco
without charge, excluding all exhibits unless we have specifically incorporated
by reference an exhibit in this Prospectus. You may obtain documents
incorporated by reference in this Prospectus by requesting them in writing or by
telephone from Texaco at the following address:
Texaco Inc.
2000 Westchester Avenue
White Plains, New York 10650
Tel: (914) 253-4000
Attention: Secretary
TEXACO INC.
Texaco Inc. was incorporated in Delaware on August 26, 1926 as The Texas
Corporation. Its name was changed in 1941 to The Texas Company and in 1959 to
Texaco Inc. It is the successor of a corporation incorporated in Texas in 1902.
Its principal executive offices are located at 2000 Westchester Avenue, White
Plains, New York 10650; telephone: (914) 253-4000. As used herein, Texaco
(unless the context otherwise indicates) refers to Texaco Inc. and all of its
consolidated subsidiary companies.
Texaco and its affiliates owned 50% or less, represent a vertically
integrated enterprise principally engaged in the worldwide exploration for and
production, transportation, refining and marketing of crude oil, natural gas and
petroleum products.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------------------------------------------
1997 1996 1995(A) 1994(B) 1993(B) 1992(A)(B)
----------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges of
Texaco Inc. on a total enterprise
basis (unaudited)................... 5.90 5.75 2.55 2.86 2.91 3.10
Ratio of earnings to combined fixed
charges and preferred stock
dividends of Texaco Inc. on a total
enterprise basis (unaudited) (c).... 5.57 5.36 2.40 2.58 2.61 2.75
</TABLE>
- - ------------------------
(a) Excludes cumulative effect of accounting changes.
(b) Excludes discontinued operations.
(c) Preferred stock dividend requirements have been adjusted to reflect the
pre-tax earnings which would be required to cover the Series C Variable Rate
Cumulative Preferred Stock (redeemed on September 30, 1994), Series E
Variable Rate Cumulative Preferred Stock (exchanged for Common Stock on
November 8, 1994) and Market Auction Preferred Shares dividends and to
exclude the interest portion of the Series B and Series F ESOP Convertible
Preferred Stock dividends.
TEXACO CAPITAL INC.
Texaco Capital Inc., a wholly owned subsidiary of Texaco Inc., is a Delaware
corporation which was incorporated on June 24, 1983. Its principal executive
offices are located at 1013 Centre Road, Wilmington, Delaware 19801; telephone:
(800) 927-9800. The Company is engaged principally in the business of lending
funds borrowed from unrelated persons to Texaco Inc. and its subsidiaries for
general corporate purposes.
USE OF PROCEEDS
The net proceeds from the sale of the Securities by Texaco Inc. will be used
for working capital, for retirement of debt and for other general corporate
purposes. The net proceeds from the sale of any Debt Securities by Texaco
Capital will be lent to Texaco Inc. or its subsidiaries to be used for similar
purposes.
PLAN OF DISTRIBUTION
The Securities may be sold in any one or more of the following ways: (1)
directly to investors, (2) to investors through agents, (3) to dealers, (4)
through underwriting syndicates led by one or more managing underwriters as
Texaco Capital or Texaco Inc. may select from time to time, or (5) through one
or more underwriters acting alone.
If underwriters are utilized in the sale, the obligations of the
underwriters will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all Securities, if any are purchased.
The specific managing underwriter or underwriters, if any, with respect to the
offer and sale of the Securities are set forth on the cover of the Prospectus
Supplement relating to such Securities and the members of the underwriting
syndicate, if any, are named in such Prospectus Supplement. Only underwriters so
named in the Prospectus Supplement are deemed to be underwriters in connection
with the Securities offered thereby and any firms not named in the Prospectus
Supplement are not parties to the Underwriting Agreement in respect of such
Securities, will not be purchasing any of the Securities from Texaco Capital or
Texaco Inc. and will have no direct or indirect participation in the
underwriting of such
4
<PAGE>
Securities, although they may participate in the distribution of such Securities
under circumstances where they may be entitled to a dealer's commission. The
Prospectus Supplement also describes the discounts and commissions to be allowed
or paid to the underwriters, all other items constituting underwriting
compensation, the discounts and commissions to be allowed or paid to dealers, if
any, and the exchanges, if any, on which the Securities will be listed.
If offers to purchase are to be solicited by agents designated by Texaco
Capital or Texaco Inc., any such agent may be deemed to be an underwriter as
that term is defined in the Securities Act of 1933, as amended (the "Securities
Act"). Agents involved in the offer or sale of the Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable by
Texaco Capital or Texaco Inc. to such agents set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, Texaco Capital or Texaco Inc. will sell such
Securities to the dealer as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, or otherwise, by one or
more firms ("remarketing firms"), acting as principals for their own accounts or
as agents for Texaco Capital or Texaco Inc.. Any remarketing firm will be
identified and the terms of its agreement, if any, with Texaco Capital or Texaco
Inc. and its compensation will be described in the Prospectus Supplement.
Remarketing firms may be deemed to be underwriters in connection with the
Securities remarketed thereby.
If so indicated in the Prospectus Supplement, Texaco Capital or Texaco Inc.
will authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase the Securities from Texaco Capital or Texaco Inc. at
the price set forth in the Prospectus Supplement pursuant to Delayed Delivery
Contracts providing for payment and delivery at a future date.
Underwriters, agents, dealers and remarketing firms may be entitled under
agreements which may be entered into with Texaco Capital and Texaco Inc. to
indemnification by Texaco Capital and Texaco Inc. against certain civil
liabilities, including liabilities under the Securities Act and may be customers
of, engage in transactions with or perform services for Texaco Capital or Texaco
Inc. in the ordinary course of business.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will be offered by Texaco Capital and will be fully and
unconditionally guaranteed by Texaco Inc. The Debt Securities are to be issued
under an indenture dated as of August 24, 1984 as supplemented and restated by
(1) the First Supplemental Indenture dated as of January 31, 1990 (a copy of
which is filed as Exhibit 4.1 to Registration Statement Nos. 33-33303 and
33-33303-01, filed on February 1, 1990), (2) the First Supplement to the First
Supplemental Indenture dated as of October 11, 1990 (a copy of which is filed as
Exhibit 4.1(a) to Texaco Inc.'s Current Report on Form 8-K, dated October 12,
1990 and filed on October 15, 1990), and (3) the Second Supplement to the First
Supplemental Indenture, dated as of August 5, 1997, (a copy of which is filed as
Exhibit 4.1(b) to Texaco Inc.'s Form 10-Q for the quarterly period ended June
30, 1997, and filed on August 13, 1997) (as so supplemented and amended, the
"Indenture") among Texaco Capital, Texaco Inc. and The Chase Manhattan Bank, as
Trustee (the "Trustee"). The following summary of certain provisions of the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all provisions of the Indenture. Unless otherwise
defined herein, all capitalized terms shall have the definitions set forth in
the Indenture.
The following description of the Indenture is subject to the detailed
provisions of such Indenture; whenever particular provisions of the Indenture
are referred to, such provisions are incorporated by
5
<PAGE>
reference as a part of the statement made, and the statement is qualified in its
entirety by such reference. Whenever a defined term is referred to and not
defined under "Description of the Debt Securities", the definition thereof is
contained in the Indenture.
The Indenture provides that, in addition to the Debt Securities offered
hereby, additional Debt Securities may be issued thereunder without limitation
as to aggregate principal amount, but subject to limitations from time to time
established by Texaco Capital's Board of Directors.
Unless specified in the Prospectus Supplement, Debt Securities offered by
Texaco Capital hereby will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of Texaco Capital. The Guaranties will rank equally
with all other unsecured and unsubordinated indebtedness of Texaco Inc.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities being offered hereby: (1) the designation of such Debt
Securities; (2) the aggregate principal amount and currency or currency unit of
such Debt Securities; (3) the denominations in which such Debt Securities are
authorized to be issued; (4) the percentage of their principal amount at which
such Debt Securities will be issued; (5) the date on which such Debt Securities
will mature; (6) if the Debt Securities are to bear interest, the rate per annum
at which such Debt Securities will bear interest (or the method by which such
rate will be determined); (7) the times at which such interest, if any, will be
payable or the manner of determining the same; (8) the date, if any, after which
such Debt Securities may be redeemed or purchased and the redemption or purchase
price; (9) the sinking fund requirements, if any; (10) special United States
federal income tax considerations, if any; (11) whether such Debt Securities are
to be issued in the form of one or more temporary or permanent Global Securities
and, if so, the identity of the Depositary for such Global Securities; (12)
information with respect to book-entry procedures, if any; (13) the manner in
which the amount of any payments of principal and interest on the Debt
Securities determined by reference to an index are determined; and (14) any
other terms of the Debt Securities not inconsistent with the Indenture.
The Indenture does not contain any provisions which may afford holders of
the Securities protection in the event of a highly leveraged transaction,
although such a provision could be added to the Indenture in the future with
respect to the Securities or any series thereof, in which event a description
thereof will be included in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the Prospectus Supplement, the Debt Securities
of a series will be issuable in registered form without coupons ("Registered
Securities") or in the form of one or more global securities ("Global
Securities"), as described below under "Global Securities". Unless otherwise
provided in an applicable Prospectus Supplement with respect to a series of Debt
Securities, Registered Securities denominated in U.S. dollars will be issued
only in denominations of $1,000 or any integral multiple thereof. One or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of outstanding Debt Securities of the
series represented by such Global Security. The Prospectus Supplement relating
to a series of Debt Securities denominated in a foreign or composite currency
will specify the denominations thereof.
Unless otherwise indicated in the Prospectus Supplement, Registered
Securities (other than a Global Security) may be presented for registration of
transfer (with the form of transfer duly executed), at the office of the
Registrar or at the office of any transfer agent designated by Texaco Capital
for such purpose with respect to any series of Debt Securities and referred to
in an applicable Prospectus Supplement, without service charge and upon payment
of any taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the Registrar or such transfer agent,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. Texaco Capital has initially appointed the
Trustee as Registrar under the Indenture. If a Prospectus Supplement refers to
any transfer agents (in addition to the Registrar) initially designated by
Texaco Capital with
6
<PAGE>
respect to any series of Registered Securities, Texaco Capital may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that Texaco Capital
will maintain a transfer agent in the City of New York. Texaco Capital may at
any time designate additional transfer agents with respect to any series of Debt
Securities.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and interest, if any, on Registered
Securities (other than a Global Security) will be made at the office of such
Paying Agent or Paying Agents as Texaco Capital may designate from time to time,
except that at the option of Texaco Capital, payment of any interest may be made
(i) by check mailed to the address of the person entitled thereto as such
address shall appear in the register or (ii) by wire transfer to an account
maintained by the person entitled thereto as specified in the register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the person in
whose name such Debt Security is registered at the close of business on the
regular Record Date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in the City of New York will be designated as
Texaco Capital's sole Paying Agent for payments with respect to Registered
Securities.
All moneys paid by Texaco Capital to a Paying Agent for the payment of
principal of (and premium, if any) and interest, if any, on any Debt Security
which remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to Texaco Capital and
the Holder of such Debt Security will thereafter look only to Texaco Capital for
payment thereof.
GUARANTIES
Texaco Inc. will unconditionally guarantee the due and punctual payment of
the principal of, (and premium, if any) and interest, if any, on the Debt
Securities issued by Texaco Capital, when and as the same shall become due and
payable, whether at maturity or upon redemption, declaration or otherwise.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
fully registered global Debt Securities (a "Global Security") that will be
deposited with a depositary (the "Depositary"), or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series. In
such case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding Debt Securities of such series. Unless and until it is exchanged
in whole or in part for Debt Securities in definitive registered form, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the Prospectus Supplement relating to such series. Texaco Capital
anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial
7
<PAGE>
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
for such Global Security (with respect to interests of participants) or by
participants or persons that hold through participants (with respect to
interests of persons other than participants).
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in a Global
Security will not be entitled to have the Debt Securities represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of such Debt Securities in definitive form and will
not be considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest, if any, on Debt
Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Global Security. None of Texaco
Capital, Texaco Inc., the Trustee or any Paying Agent for such Debt Securities
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in such Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Texaco Capital expects that the Depositary for any Debt Securities
represented by a Global Security, upon receipt of any payment of principal,
premium or interest, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depositary. Texaco Capital also expects that payments by participants to owners
of beneficial interest in such Global Security held through such participants
will be governed by standing instructions and customary practices, as is now the
case with the securities held for the accounts of customers registered in
"street names" and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Global Security
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by Texaco Capital within ninety days, Texaco Capital
will issue such Debt Securities in definitive form in exchange for such Global
Security. In addition, Texaco Capital may at any time and in its sole discretion
determine not to have any of the Debt Securities of a series represented by one
or more Global Securities and, in such event, will issue Debt Securities of such
series in definitive form in exchange therefor.
CERTAIN LIMITATIONS ON LIENS
The Indenture provides that Texaco Inc. shall not, and it shall not permit
any Principal Subsidiary (defined as a Subsidiary (i) substantially all of the
assets of which are located, and substantially all of the operations of which
are conducted, in the United States, (ii) which owns a Principal Property,
defined as an important oil and gas producing property onshore or offshore the
United States or any important refinery or manufacturing plant located in the
United States and (iii) in which Texaco Inc.'s direct or indirect net investment
exceeds $100,000,000) to, incur a Lien to secure a Long-Term Debt on a Principal
Property, any Capital Stock or a Long-Term Debt ("Debt") of a Principal
Subsidiary unless: (1) the Lien equally and ratably secures the Debt Securities
and the secured Debt; (2) the Lien is in existence at the time a corporation
merges into or consolidates with Texaco Inc. or a Principal Subsidiary or
becomes a Principal Subsidiary; (3) the Lien is on a Principal Property at the
time Texaco Inc. or a Principal Subsidiary acquires the Principal Property; (4)
the Lien secures Debt incurred to finance all or some of the purchase price of a
Principal Property or a Principal Subsidiary; (5) the Lien secures Debt incurred
to finance all or some of the costs of Improvements on a Principal Property; (6)
the Lien secures Debt of a Principal Subsidiary owing to Texaco Inc. or another
Principal Subsidiary; (7) the Lien extends, renews or replaces in whole or
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in part a Lien permitted by any of clauses (1) through (6); or (8) the secured
Debt plus all other Debt secured by Liens on Principal Properties, Capital Stock
or Debt of a Principal Subsidiary at the time does not exceed 10% of Texaco's
Consolidated Net Tangible Assets. However, Debt secured by a Lien permitted by
any of clauses (1) through (7) shall be excluded from all other Debt in the
determination.
LIMITATIONS ON SALE AND LEASEBACK
The Indenture provides that Texaco Inc. shall not, and it shall not permit
any Principal Subsidiary to, enter into a Sale-Leaseback Transaction unless: (1)
the lease has a term of three years or less; (2) the lease is between Texaco
Inc. and a Principal Subsidiary or between Principal Subsidiaries; (3) Texaco
Inc. or a Principal Subsidiary under the terms of the Indenture could create a
Lien on the Principal Property to secure a Debt at least equal in amount to the
Attributable Debt for the lease; or (4) Texaco Inc. or a Principal Subsidiary
within 120 days of the effective date of the Sale-Leaseback Transaction (i)
retires Debt of Texaco Inc. or of a Principal Subsidiary at least equal in
amount to the fair value (as determined by Texaco Inc.'s Board of Directors) of
the Principal Property at the time the Principal Property is leased or (ii) if
the net proceeds of the Sale-Leaseback Transaction equal or exceed the fair
value of the Principal Property (as determined by Texaco Inc.'s Board of
Directors), applies the net proceeds to fund investment in other Principal
Properties which investments were made within twelve months prior to or
subsequent to the transaction.
CONSOLIDATION AND MERGER
The Indenture provides that either Texaco Capital or Texaco Inc. may
consolidate or merge into, or transfer its properties and assets substantially
as an entirety to, another person without the consent of the Holders of any of
the Debt Securities outstanding under the Indenture, provided the person assumes
by supplemental indenture all the obligations of Texaco Capital or Texaco Inc.,
as the case may be, under the Debt Securities and the Indenture and immediately
after the transaction no Default exists. Thereafter, all such obligations of
Texaco Capital or Texaco Inc., as the case may be, shall terminate.
DEFAULT
The Indenture defines an "Event of Default" with respect to any series of
the Debt Securities as being any one of the following events: (1) default for 30
days in the payment of interest on any Debt Security of that series; (2) default
in the payment of the principal of, or premium, if any, on, or in the making of
any sinking fund payments on any Debt Security of that series when due; (3)
failure to comply with any other agreements in the Debt Securities of that
series, the Indenture or any supplemental indenture under which the Debt
Securities may have been issued and continuation of the default for the period
and after the
notice specified below; and (4) certain events in bankruptcy, insolvency, or
reorganization.
A default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of all of the Debt Securities of
that series outstanding notify Texaco Capital of the default and the default is
not cured within 90 days after receipt of the notice.
If an Event of Default occurs with respect to the Debt Securities of any
series and is continuing, the Trustee by notice to Texaco Capital, or the
Holders of at least 25% in principal amount of all of the Debt Securities of
that series outstanding by notice to Texaco Capital and the Trustee, may declare
the principal of and premium and accrued interest, if any, on all the Debt
Securities of that series to be due and payable immediately. The Holders of a
majority in principal amount of all of the Debt Securities of that series by
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree by a court of
competent jurisdiction and if all existing Events of Default have been cured or
waived except nonpayment of principal or premium or interest, if any, that has
become due solely because of the acceleration.
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If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal or premium or interest, if any, on the Debt Securities of the series
that is in default or to enforce the performance of any provision of the Debt
Securities or the Indenture.
Subject to certain exceptions, the Holders of a majority in principal amount
of the Debt Securities by notice to the Trustee may waive an existing default
and its consequences.
MODIFICATION OF THE INDENTURE
The Indenture provides that Texaco Capital, Texaco Inc. and the Trustee may
enter into a supplemental indenture to amend the Indenture or the Debt
Securities without the consent of any Securityholder: (1) to cure any ambiguity,
defect or inconsistency; (2) to comply with Article 5 of the Indenture to permit
a successor to assume Texaco Capital's or Texaco Inc.'s obligations under the
Indenture; (3) to make any change that does not adversely affect the rights of
any Securityholder; or (4) to provide for the issuance of and establish the
terms and conditions of Debt Securities of any series.
Texaco Capital, Texaco Inc. and the Trustee may enter into a supplemental
indenture to amend the Indenture or the Debt Securities of a series with the
written consent of the Holders of at least 50.1% in principal amount of the Debt
Securities of the series affected. The Holders of at least 50.1% in principal
amount of the Debt Securities by notice to the Trustee may waive compliance by
Texaco Capital or Texaco Inc. with any provision of the Indenture or the Debt
Securities.
Notwithstanding the foregoing, without the consent of each Securityholder
affected, an amendment or waiver may not: (1) reduce the amount of Debt
Securities whose Holders must consent to an amendment or waiver; (2) reduce the
rate of or extend the time for payment of interest on any Debt Security; (3)
reduce the principal of or extend the fixed maturity of any Debt Security; (4)
waive a default in the payment of the principal, premium or interest, if any, on
any Debt Security; or (5) make any Debt Security payable in money other than
that stated in the Debt Security.
DEFEASANCE AND DISCHARGE
The Indenture provides that Texaco Capital may terminate its obligations
with respect to any series of Debt Securities, on the terms and subject to the
conditions contained in the Indenture, by depositing in trust with the Trustee
money or U.S. Government Obligations sufficient to pay principal, premium and
interest, if any, on such series to redemption or maturity. Upon the termination
of the Company's obligations with respect to all the Debt Securities of a
series, the Trustee, at the request of Texaco Capital, shall release its rights
and interests with respect to such series of Debt Securities in any security
granted by Texaco Capital or Texaco Inc. As a condition to any such termination,
Texaco Capital is required to furnish an opinion of recognized independent tax
counsel to the effect that such proposed deposit and termination will not have
any effect on the Holders of the Debt Securities for Federal income tax
purposes. Such opinion must be based upon a ruling of the Internal Revenue
Service or a change in United States federal income tax law occurring after the
date of this Prospectus since such a result would not occur under current tax
law.
OTHER DEBT SECURITIES
In addition to the Debt Securities described above, Texaco Capital may issue
subordinated debt securities (which will be guaranteed on a subordinated basis
by Texaco Inc.) and Texaco Inc. may issue either senior or subordinated debt
securities. Any such debt securities will be described in a Prospectus
Supplement and will be issued pursuant to an indenture entered into among Texaco
Inc., a trustee and, if applicable, Texaco Capital, which indenture will be
filed with the SEC and qualified under the Trust Indenture Act.
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DESCRIPTION OF TEXACO INC. COMMON STOCK
As of the date of this Prospectus, Texaco Inc.'s Certificate of
Incorporation authorizes the issuance of 700,000,000 shares of Common Stock,
$3.125 par value per share. As of February 5, 1998, 540,987,148 shares of Common
Stock were outstanding.
Subject to the rights of the holders of any outstanding shares of preferred
stock, holders of Common Stock are entitled to receive such dividends, in cash,
securities, or property, as may from time to time be declared by the Board of
Directors. Subject to the provisions of Texaco Inc.'s By-laws, as from time to
time amended, with respect to the closing of the transfer books and the fixing
of a record date, holders of shares of Common Stock are entitled to one vote per
share of Common Stock held on all matters requiring a vote of the stockholders.
In the event of any liquidation, dissolution, or winding up of Texaco Inc.,
either voluntary or involuntary, after payment shall have been made to the
holders of preferred stock of the full amount to which they shall be entitled,
the holders of Common Stock shall be entitled to share ratably, according to the
number of shares held by them, in all remaining assets of Texaco Inc. available
for distribution. Shares of Common Stock are not redeemable and have no
subscription, conversion or preemptive rights. Each share of Common Stock has
attached to it a Right to purchase, under certain circumstances, additional
shares of Common Stock or other securities at a significant discount, when
certain conditions are met.
DESCRIPTION OF TEXACO INC. PREFERRED STOCK
The following is a description of certain general terms and provisions of
Texaco Inc.'s Preferred Stock. The particular terms of any series of Preferred
Stock will be described in the applicable Prospectus Supplement. If so indicated
in a Prospectus Supplement, the terms of any such series may differ from the
terms set forth below.
The summary of terms of Texaco Inc.'s Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of Texaco Inc.'s Certificate of Incorporation
and the certificate of designations relating to each series of the Preferred
Stock (the "Certificate of Designations"), which will be filed as an exhibit to
or incorporated by reference in the Registration Statement of which this
Prospectus is a part at or prior to the time of issuance of such series of the
Preferred Stock.
Texaco Inc.'s Certificate of Incorporation authorizes the issuance of
30,000,000 shares of Preferred Stock, par value $1.00 per share. The Texaco Inc.
Board is authorized to designate any series of Preferred Stock and the powers,
preferences and rights of the shares of such series and the qualifications,
limitations or restrictions thereof without further action by the holders of
Common Stock. As of February 5, 1998, there were outstanding 691,020 shares of
Series B ESOP Convertible Preferred Stock, 55,695 shares of Series F ESOP
Convertible Preferred Stock and 1,200 shares of Market Auction Preferred Stock.
There are 3,000,000 shares designated as Series D Junior Participating Preferred
Stock, none of which are currently outstanding.
The Texaco Inc. Board is authorized to determine, for each series of
Preferred Stock, and the Prospectus Supplement shall set forth with respect to
such series: (i) whether the holders thereof shall be entitled to cumulative,
noncumulative, or partially cumulative dividends and, with respect to shares
entitled to dividends, the dividend rate or rates, including without limitation
the methods and procedures for determining such rate or rates, and any other
terms and conditions relating to such dividends; (ii) whether, and if so to what
extent and upon what terms and conditions, the holders thereof shall be entitled
to rights upon the liquidation of, or upon any distribution of the assets of,
Texaco Inc.; (iii) whether, and if so upon what terms and conditions, such
shares shall be convertible into Debt Securities, any other series of Preferred
Stock, Depositary Shares or Common Stock, or exchangeable for the securities of
any other corporation; (iv) whether, and if so upon what terms and conditions,
such shares shall be redeemable; (v) whether the shares shall be redeemable and
subject to any sinking fund provided
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for the purchase or redemption of such shares and, if so, the terms of such
fund; (vi) whether the holders thereof shall be entitled to voting rights and,
if so, the terms and conditions for the exercise thereof; and (vii) whether the
holders thereof shall be entitled to other preferences or rights, and, if so,
the qualifications, limitations, or restrictions of such preferences or rights.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of Texaco Inc. legally
available for payment, cash dividends payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. The
Prospectus Supplement will also state applicable record dates regarding the
payment of dividends. Except as set forth below, no dividends shall be declared
or paid or set apart for payment on any series of Preferred Stock unless full
dividends for all series of Preferred Stock (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on such
Preferred Stock are cumulative) have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set apart for
such payment. When dividends are not so paid in full (or a sum sufficient for
such full payment is not so set apart) upon the Preferred Stock, dividends
declared (if any) on the Preferred Stock shall be declared pro-rata so that the
amount of dividends declared per share on each series of Preferred Stock shall
in all cases bear to each other series the same ratio that (x) accrued dividends
(including any accumulation with respect to unpaid dividends for prior dividend
periods, if dividends for such series are cumulative) for the then-current
dividend period per share for each respective series of Preferred Stock bear to
(y) aggregate accrued dividends for the then-current dividend period (including
all accumulations with respect to unpaid dividends for prior periods for all
series which are cumulative) for all outstanding shares of Preferred Stock.
Unless all dividends on the Preferred Stock shall have been paid in full (i)
no dividend shall be declared and paid or declared and a sum sufficient thereof
set apart for payment (other than a dividend in Texaco Inc.'s common stock or in
any other class ranking junior to the Preferred Stock as to dividends and
liquidation preferences) or other distribution declared or made upon the shares
of Texaco Inc.'s common stock or upon any other class ranking junior to the
Preferred Stock as to dividends or liquidation preferences and (ii) no shares of
Texaco Inc.'s common stock or class of stock ranking junior to the Preferred
Stock as to dividends or liquidation preferences may be redeemed, purchased or
otherwise acquired by Texaco Inc. except by conversion into or exchange for
shares of Texaco Inc. ranking junior to the Preferred Stock as to dividends and
liquidation preferences.
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the related Prospectus
Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the related Prospectus Supplement.
LIQUIDATION
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Texaco Inc., holders of any series of Preferred Stock will be entitled to
receive the liquidation preference per share specified in the Prospectus
Supplement, if any, in each case together with any applicable accrued and unpaid
dividends and before any distribution to holders of Texaco Inc.'s common stock
or any class of stock ranking junior to the Preferred Stock as to dividends and
liquidation preferences. In the event there are insufficient assets to pay such
liquidation preferences for all classes of Preferred Stock in full, the
remaining assets shall be allocated ratably among all series of Preferred Stock
based upon the aggregate liquidation preference for all outstanding shares for
each such series. After payment of the full amount of the liquidation preference
to
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which they are entitled, the holders of shares of Preferred Stock will not be
entitled to any further participation in any distribution of assets by Texaco
Inc. unless otherwise provided in a Prospectus Supplement, and the remaining
assets of Texaco Inc. shall be distributable exclusively among the holders of
Texaco Inc.'s common stock and any class of stock ranking junior to the
Preferred Stock as to dividends and liquidation preferences, according to their
respective interests.
VOTING
No series of Preferred Stock will be entitled to vote except as provided
below or in the related Prospectus Supplement. Unless otherwise specified in the
related Prospectus Supplement, if at any time Texaco Inc. shall have failed to
declare and pay in full dividends for six quarterly periods, whether consecutive
or not, on any applicable series of Preferred Stock and all such preferred
dividends remain unpaid (a "Preferred Dividend Default"), the number of
directors of Texaco Inc. shall be increased by two and the holders of such
series of Preferred Stock, voting together as a class with all other series of
Preferred Stock then entitled to vote on such election of directors, shall be
entitled to elect such two additional directors until the full dividends
accumulated on all outstanding shares of such series shall have been declared
and paid in full. Upon the occurrence of a Preferred Dividend Default, Texaco
Inc.'s Board of Directors shall within 10 business days of such default call a
special meeting of the holders of shares of all affected series, for which there
is a Preferred Dividend Default, for the purpose of electing the additional
directors. In lieu of holding such meeting, the holders of record of a majority
of the outstanding shares of all series for which there is a Preferred Dividend
Default who are then entitled to participate in the election of directors may,
by action taken by written consent, elect such additional directors. If and when
all accumulated dividends on any series of Preferred Stock have been paid in
full, the holders of shares of such series shall be divested of the foregoing
voting rights subject to revesting in the event of each and every Preferred
Dividend Default. Upon termination of such special voting rights attributable to
all series for which there has been a Preferred Dividend Default, the term of
office of each director so elected (a "Preferred Stock Director") shall
terminate and the number of directors of Texaco Inc. shall, without further
action, be reduced by two, subject always to the increase in the number of
directors pursuant to the foregoing provisions in case of a future Preferred
Dividend Default. Any Preferred Stock Director may be removed at any time with
or without cause by, and shall not be removed otherwise than by, the vote of the
holders of record of a majority of the outstanding shares of all series of
Preferred Stock who were entitled to participate in such director's election,
voting as a separate class, at a meeting called for such purpose or by written
consent. So long as a Preferred Stock Default shall continue, any vacancy in the
office of a Preferred Stock Director may be filled by written consent of the
Preferred Stock Director remaining in office, or if none remains in office, by a
vote of the holders of record of a majority of the outstanding series of
Preferred Stock who are then entitled to participate in the election of such
Preferred Stock Directors as provided above. As long as the Preferred Dividend
Default shall continue, holders of the Preferred Stock shall not, as such
stockholders, be entitled to vote on the election or removal or directors, other
than Preferred Stock Directors, but shall not be divested of any other voting
rights provided to the holders of Preferred Stock by law with respect to any
other matter to be acted upon by the stockholders of Texaco Inc. The Preferred
Stock Directors shall each be entitled to one vote per director on any matter.
Additionally, unless otherwise specified in a Prospectus Supplement, the
affirmative vote of the holders of a majority of the outstanding shares of each
series of Preferred Stock voting together as a class, is required to authorize
any amendment, alteration or repeal of Texaco Inc.'s Certificate of
Incorporation or any Certificate of Designations which would adversely affect
the powers, preferences, or special rights of the Preferred Stock including
authorizing any class of stock with superior dividend and liquidation
preferences.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by Texaco Inc. shall resume the status of authorized
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and unissued shares of Preferred Stock undesignated as to series, and shall be
available for subsequent issuance. There are no restrictions on repurchase or
redemption of the Preferred Stock while there is any arrearage on sinking fund
installments except as may be set forth in a Prospectus Supplement. Neither the
par value nor the liquidation preference is indicative of the price at which the
Preferred Stock will actually trade on or after the date of issuance. Payment of
dividends on any series of Preferred Stock may be restricted by loan agreements,
indentures and other transactions entered into by Texaco Inc.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, Texaco Inc.'s
Certificate of Incorporation or Certificate of Designations for the applicable
series of Preferred Stock or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
DESCRIPTION OF THE DEPOSITARY SHARES
Texaco Inc. may, at its option, elect to offer Depositary Shares rather than
full shares of Preferred Stock. In the event such option is exercised, each of
the Depositary Shares will represent ownership of and entitlement to all rights
and preferences of a fraction of a share of Preferred Stock of a specified
series (including dividend, voting, redemption and liquidation rights). The
applicable fraction will be specified in the Prospectus Supplement. The shares
of Preferred Stock represented by the Depositary Shares will be deposited with a
Depositary (the "Depositary") named in the applicable Prospectus Supplement,
under a Deposit Agreement (the "Deposit Agreement"), among Texaco Inc., the
Depositary and the holders of the Depositary Receipts. Certificates evidencing
Depositary Shares ("Depositary Receipts") will be delivered to those persons
purchasing Depositary Shares in the offering. The Depositary will be the
transfer agent, registrar and dividend disbursing agent for the Depositary
Shares. Holders of Depositary Receipts agree to be bound by the Deposit
Agreement, which requires holders to take certain actions such as filing proof
of residence and paying certain charges.
The summary of terms of Texaco Inc.'s Depositary Shares contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Deposit Agreement, Texaco Inc.'s
Certificate of Incorporation and the Certificate of Designations for the
applicable series of Preferred Stock.
DIVIDENDS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the series of Preferred Stock represented
by the Depositary Shares to the record holders of Depositary Receipts in
proportion to the number of Depositary Shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by
Texaco Inc. for the applicable series of Preferred Stock. The Depositary,
however, will distribute only such amount as can be distributed without
attributing to any Depositary Share a fraction of one cent, and any balance not
so distributed will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Receipts
entitled thereto, in proportion, as nearly as may be practicable, to the number
of Depositary Shares owned by such holders on the relevant record date, unless
the Depositary determines (after consultation with Texaco Inc.) that it is not
feasible to make such
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distribution, in which case the Depositary may (with the approval of Texaco
Inc.) adopt any other method for such distribution as it deems appropriate,
including the sale of such property and distribution of the net proceeds from
such sale to such holders.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the affairs of
Texaco Inc., whether voluntary or involuntary, the holders of each Depositary
Share will be entitled to the fraction of the liquidation preference accorded
each share of the applicable series of Preferred Stock, as set forth in the
Prospectus Supplement.
REDEMPTION
If the series of Preferred Stock represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemed from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of Preferred Stock held by the Depositary. Whenever Texaco Inc.
redeems any Preferred Stock held by the Depositary, the Depositary will redeem
as of the same redemption date the number of Depositary Shares representing the
Preferred Stock so redeemed. The Depositary will mail the notice of redemption
promptly upon receipt of such notice from Texaco Inc. and not less than 35 nor
more than 60 days prior to the date fixed for redemption of the Preferred Stock
and the Depositary Shares to the record holders of the Depositary Receipts.
VOTING
Promptly upon receipt of notice of any meeting at which the holders of the
series of Preferred Stock represented by the applicable series of Depositary
Shares are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Receipts as of
the record date for such meeting. Each such record holder of Depositary Receipts
will be entitled to instruct the Depositary as to the exercise of the voting
rights pertaining to the number of shares of Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote such Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and Texaco Inc. will agree to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting any of the
Preferred Stock to the extent that it does not receive specific instructions
from the holders of Depositary Receipts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of any unpaid amount due the Depositary, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced
thereby is entitled to delivery of the number of whole shares of Preferred Stock
and all money and other property, if any, represented by such Depositary Shares.
Partial shares of Preferred Stock will not be issued. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between Texaco Inc. and the Depositary. However, any
amendment which materially and adversely alters the rights of the holders
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(other than any change in fees) of Depositary Shares will not be effective
unless such amendment has been approved by at least a majority of the Depositary
Shares then outstanding. No such amendment may impair the right, subject to the
terms of the Deposit Agreement, of any owner of any Depositary Shares to
surrender the Depositary Receipt evidencing such Depositary Shares with
instructions to the Depositary to deliver to the holder the Preferred Stock and
all money and other property, if any, represented thereby, except in order to
comply with mandatory provisions of applicable law. The Deposit Agreement may be
terminated by Texaco Inc. or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final distribution
in respect of the Preferred Stock in connection with any dissolution of Texaco
Inc. and such distribution has been made to all the holders of Depositary
Shares.
CHARGES OF DEPOSITARY
Texaco Inc. will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Texaco Inc.
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and the initial issuance of the Depositary Shares, any
redemption of the Preferred Stock and all withdrawals of Preferred Stock by
owners of Depositary Shares. Holders of Depositary Receipts will pay transfer,
income and other taxes and governmental charges and certain other charges as are
provided in the Deposit Agreement to be for their accounts. In certain
circumstances, the Depositary may refuse to transfer Depositary Shares, may
withhold dividends and distributions and sell the Depositary Shares evidenced by
such Depositary Receipt if such charges are not paid.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Receipts all
reports and communications from Texaco Inc. which are delivered to the
Depositary and which Texaco Inc. is required to furnish to the holders of the
Preferred Stock. In addition, the Depositary will make available for inspection
by holders of Depositary Receipts at the principal office of the Depositary, and
at such other places as it may from time to time deem advisable, any reports and
communications received from Texaco Inc. which are received by the Depositary as
the holder of Preferred Stock.
Neither the Depositary nor Texaco Inc. assumes any obligation or will be
subject to any liability under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence or willful misconduct. Neither the
Depositary nor Texaco Inc. will be liable if it is prevented or delayed by law
or any circumstance beyond its control in performing its obligations under the
Deposit Agreement. The obligations of Texaco Inc. and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. Texaco Inc. and the Depositary may rely on
written advice of counsel or accountants, on information provided by holders of
Depositary Receipts or other persons believed in good faith to be competent to
give such information and on documents believed to be genuine and to have been
signed or presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Texaco Inc. notice of
its election to do so, and Texaco Inc. may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice for
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $150,000,000.
16
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the Preferred Stock represented by such
Depositary Shares. Accordingly, such owners will be entitled to take into
account for Federal income tax purposes income and deductions to which they
would be entitled if they were holders of such Preferred Stock. In addition, (i)
no gain or loss will be recognized for Federal income tax purposes upon the
withdrawal of Preferred Stock in exchange for Depositary Shares, (ii) the tax
basis of each share of Preferred Stock to an exchanging owner of Depositary
Shares will, upon such exchange, be the same as the aggregate tax basis of the
Depositary Shares exchanged therefor, and (iii) the holding period for Preferred
Stock in the hands of an exchanging owner of Depositary Shares will include the
period during which such person owned such Depositary Shares.
DESCRIPTION OF THE WARRANTS
Texaco Capital may issue Warrants for the purchase of Debt Securities and
Texaco Inc. may issue Warrants for the Purchase of Texaco Inc. Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Texaco Inc. Debt Securities, Preferred Stock or
Common Stock offered by any Prospectus Supplement and may be attached to or
separate from any such Securities. Each series of Warrants will be issued under
a separate warrant agreement (a "Warrant Agreement") to be entered into between
Texaco Capital or Texaco Inc. and a bank or trust company, as warrant agent (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of Texaco Inc.
or Texaco Capital in connection with the Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. The following summary of certain provisions of
the Warrants does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the Warrant Agreement that will
be filed with the SEC in connection with the offering of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Warrants to
issue Debt Securities ("Debt Warrants") will describe the terms of such Debt
Warrants, including the following: (a) the title of such Debt Warrants; (b) the
offering price for such Debt Warrants, if any; (c) the aggregate number of such
Debt Warrants; (d) the designation and terms of the Debt Securities or Texaco
Inc. Debt Securities purchasable upon exercise of such Debt Warrants; (e) if
applicable, the designation and terms of the Debt Securities or Texaco Inc. Debt
Securities with which such Debt Warrants are issued and the number of such Debt
Warrants issued with each such Debt Security or Texaco Inc. Debt Security; (f)
if applicable, the date from and after which such Debt Warrants and any Debt
Securities or Texaco Inc. Debt Securities issued therewith will be separately
transferable; (g) the principal amount of Debt Securities or Texaco Inc. Debt
Securities purchasable upon exercise of a Debt Warrant and the price at which
such principal amount of Debt Securities or Texaco Inc. Debt Securities may be
purchased upon exercise (which price may be payable in cash, securities, or
other property); (h) the date on which the right to exercise such Debt Warrants
shall commence and the date on which such right shall expire; (i) if applicable,
the minimum or maximum amount of such Debt Warrants that may be exercised at any
one time; (j) whether the Debt Warrants represented by the Debt Warrant
certificates, Debt Securities or Texaco Inc. Debt Securities that may be issued
upon exercise of the Debt Warrants will be issued in registered or bearer form;
(k) information with respect to book-entry procedures, if any; (l) the currency
or currency units in which the offering price, if any, and the exercise price
are payable; (m) if applicable, a discussion of material United States federal
income tax considerations; (n) the antidilution provisions of such Debt
Warrants, if any; (o) the redemption or call provisions, if any, applicable to
such Debt Warrants; and (p) any additional terms of the Debt Warrants, including
terms, procedures, and limitations relating to the exchange and exercise of such
Debt Warrants.
17
<PAGE>
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Warrants to
issue Common Stock or Preferred Stock will describe the terms of such Warrants,
including the following: (a) the title of such Warrants; (b) the offering price
for such Warrants, if any; (c) the aggregate number of such Warrants; (d) the
designation and terms of the Common Stock or Preferred Stock purchasable upon
exercise of such Warrants; (e) if applicable, the designation and terms of the
Securities with which such Warrants are issued and the number of such Warrants
issued with each such Security; (f) if applicable, the date from and after which
such Warrants and any Securities issued therewith will be separately
transferable; (g) the number of shares of Common Stock or Preferred Stock
purchasable upon exercise of a Warrant and the price at which such shares may be
purchased upon exercise; (h) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (i) if
applicable, the minimum or maximum amount of such Warrants that may be exercised
at any one time; (j) the currency or currency units in which the offering price,
if any, and the exercise price are payable; (k) if applicable, a discussion of
material United States federal income tax considerations; (l) the antidilution
provisions of such Warrants, if any; (m) the redemption or call provisions, if
any, applicable to such Warrants; and (n) any additional terms of the Warrants,
including terms, procedures, and limitations relating to the exchange and
exercise of such Warrants.
EXPERTS
The audited consolidated financial statements and schedules included or
incorporated by reference in the Annual Report of Texaco Inc. for the fiscal
year ended December 31, 1996 filed on Form 10-K, incorporated herein by
reference, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
LEGAL OPINIONS
The validity of the Securities being offered hereby will be passed upon for
Texaco Capital and Texaco Inc. by Paul R. Lovejoy, Esq., Assistant General
Counsel of Texaco Inc. or such other attorney of Texaco Inc. as Texaco Capital
and Texaco Inc. may designate, and for the purchasers by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017.
18
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
Registration Fee for Registration Statement....................... $ 221,250
Accounting Fees and Expenses...................................... 100,000
Trustee's Fees and Expenses (including counsel fees).............. 200,000
Blue Sky Fees and Expenses........................................ 15,000
Legal Fees and Expenses........................................... 100,000
Printing and Engraving Fees....................................... 150,000
Rating Agency Fees................................................ 200,000
Miscellaneous..................................................... 10,000
---------
TOTAL......................................................... $ 996,250*
---------
---------
</TABLE>
- - ------------------------
* All amounts are estimated except for registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the provisions of Section 145 of the Delaware Corporation Law and
Article V of the By-Laws of Texaco Inc., directors and officers of Texaco Inc.
are indemnified by Texaco Inc. under certain circumstances for certain
liabilities and expenses.
Texaco Inc. would recover indemnification payments under the provisions of
its Directors and Officers Liability and Company Reimbursement Liability Policy,
subject to deductibles and other specified exclusions set forth in the policy.
Further, directors or officers of Texaco Inc. may recover directly under the
policy in certain instances where Texaco Inc. itself does not provide
indemnification.
Likewise, under Section 145 of the Delaware Corporation Law and the By-Laws
of Texaco Capital, directors and officers of Texaco Capital are indemnified by
Texaco Capital under certain circumstances for certain liabilities and expenses.
ITEM 16. EXHIBITS
<TABLE>
<C> <C> <S>
1.1 -- Underwriting Agreement Standard Provisions.
1.2 -- Form of Distribution Agreement.
**4.1 -- Form of First Supplemental Indenture among Texaco Capital Inc., Texaco Inc.
and The Chase Manhattan Bank (National Association), as Trustee, filed as
Exhibit 4.1 to Texaco Capital Inc.'s Registration Statement on Form S-3
(Registration Nos. 33-33303 and 33-33303-01) on February 1, 1990.
**4.1(a) -- Form of First Supplement to the First Supplemental Indenture, filed as
Exhibit 4.1(a) to Texaco Inc.'s Current Report on Form 8-K, dated October
12, 1990 and filed on October 15, 1990, SEC File No. 1-27.
**4.1(b) -- Form of Second Supplement to the First Supplemental Indenture, dated as of
August 5, 1997, filed as Exhibit 4.1(b) to Texaco Inc.'s Form 10-Q for the
quarterly period ended June 30, 1997, and filed on August 13, 1997, SEC
File No. 1-27.
**4.2(a) -- Form of Guaranteed Note, filed as Exhibit 4.2(a) to Texaco Capital Inc.'s
Registration Statement on Form S-3 (Registration No. 33-40309) on May 1,
1991.
**4.2(b) -- Form of Guaranteed Debenture, filed as Exhibit 4.2(b) to Texaco Capital
Inc.'s Registration Statement on Form S-3 (Registration No. 33-40309) on
May 1, 1991.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
**4.3(a) -- Form of Warrant Agreement, for Warrants Sold Attached to Debt Securities
(including form of Warrant Certificate), filed as Exhibit 4.3(a) to Texaco
Capital Inc.'s Registration Statement on Form S-3 (Registration No.
33-40309) on May 1, 1991.
**4.3(b) -- Form of Warrant Agreement, for Warrants Sold Alone (including form of
Warrant Certificate), filed as Exhibit 4.3(b) to Texaco Capital Inc.'s
Registration Statement on Form S-3 (Registration No. 33-40309) on May 1,
1991.
5 -- Opinion of Paul R. Lovejoy, Esq. as to legality of the Securities.
**12.1 -- Computation of Ratio of Earnings to Fixed Charges, filed as Exhibit 12 to
Texaco Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1997 on November 13, 1997, SEC File No. 1-17.
12.2 -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- The consent of Paul R. Lovejoy, Esq. is contained in his opinion filed as
Exhibit 5 to this Registration Statement.
**24.1 -- Power of Attorney. Powers of Attorney for certain directors and officers of
Texaco Inc. authorizing, among other things, the signing of registration
statements on their behalf, have been filed as Exhibit 24 to Texaco Inc.'s
Registration Statement on Form S-4, dated and filed September 29, 1997,
Registration No. 333-36679.
24.2(a to d) -- Power of Attorney. Powers of Attorney for the directors and certain
officers of Texaco Capital Inc. authorizing, among other things, the
signing of registration statements on their behalf.
</TABLE>
- - ------------------------
** Previously filed.
ITEM 17. UNDERTAKINGS.
Each of Texaco Capital and Texaco Inc. hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the Securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the SEC by Texaco Inc. pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the Securities offered
therein, and the offering of such Securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of Texaco Inc.'s Annual Report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the Securities offered
therein, and the offering of such Securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Texaco Capital or Texaco Inc. pursuant to the provisions specified in the first
and third paragraphs of Item 15 of this Registration Statement or otherwise,
Texaco Capital and Texaco Inc. have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in said Act and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Texaco Capital or Texaco Inc. of expenses incurred or paid by a director,
officer or controlling person of Texaco Capital or Texaco Inc. in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the Securities being registered, Texaco
Capital and Texaco Inc. will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act, and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TEXACO CAPITAL
INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE TOWN OF HARRISON, STATE OF NEW YORK, ON THE 18TH DAY OF
FEBRUARY, 1998.
<TABLE>
<S> <C>
TEXACO CAPITAL INC.
(Registrant)
By ROBERT C. GORDAN
------------------------------------------
(ROBERT C. GORDAN)
TREASURER
</TABLE>
<TABLE>
<S> <C> <C> <C>
Attest:
By R.E. KOCH
---------------------------------------
(R.E. KOCH) ASSISTANT SECRETARY
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<S> <C>
JAMES F. LINK........................ Chairman of the Board
(Principal Executive Officer)
ROBERT C. GORDAN..................... Treasurer
(Principal Financial Officer)
ROBERT C. OELKERS.................... Comptroller
(Principal Accounting Officer)
</TABLE>
DIRECTORS
<TABLE>
<S> <C> <C>
ROBERT C. GORDAN PETER M. WISSEL
JAMES F. LINK
</TABLE>
<TABLE>
<S> <C> <C> <C>
By R.E. KOCH
---------------------------------------
(R.E. KOCH)
Attorney-in-fact for the above-named
officers and directors
</TABLE>
February 18, 1998
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TEXACO INC.
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE TOWN OF HARRISON, STATE OF NEW YORK, ON THE 18TH DAY OF
FEBRUARY, 1998.
<TABLE>
<S> <C>
TEXACO INC.
(Registrant and Guarantor)
By CARL B. DAVIDSON
------------------------------------------
(CARL B. DAVIDSON)
VICE PRESIDENT AND SECRETARY
</TABLE>
<TABLE>
<S> <C> <C> <C>
Attest:
By R.E. KOCH
---------------------------------------
(R.E. KOCH) ASSISTANT SECRETARY
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<S> <C>
PETER I. BIJUR....................... Chairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer)
PATRICK J. LYNCH..................... Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
ROBERT C. OELKERS.................... Comptroller
(Principal Accounting Officer)
</TABLE>
DIRECTORS
<TABLE>
<S> <C>
PETER I. BIJUR THOMAS S. MURPHY
JOHN BRADEMAS CHARLES H. PRICE, II
MARY K. BUSH ROBIN B. SMITH
WILLARD C. BUTCHER WILLIAM C. STEERE, JR.
EDMUND M. CARPENTER THOMAS A. VANDERSLICE
MICHAEL C. HAWLEY WILLIAM WRIGLEY
FRANKLYN G. JENIFER
</TABLE>
<TABLE>
<S> <C> <C> <C>
By R.E. KOCH
---------------------------------------
(R.E. KOCH)
Attorney-in-fact for the above-named
officers and directors
</TABLE>
February 18, 1998
II-5
<PAGE>
INDEX TO EXHIBITS
The exhibits designated by an asterisk are incorporated herein by reference
to documents previously filed by the Company or Texaco Inc. with the Securities
and Exchange Commission.
EXHIBITS.
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
1.1 --Underwriting Agreement Standard Provisions.
1.2 --Form of Distribution Agreement.
*4.1 --Form of First Supplemental Indenture among Texaco Capital Inc., Texaco Inc. and The
Chase Manhattan Bank (National Association), as Trustee, filed as Exhibit 4.1 to Texaco
Capital Inc.'s Registration Statement on Form S-3 (Registration Nos. 33-33303 and
33-33303-01) on February 1, 1990.
*4.1(a) --Form of First Supplement to the First Supplemental Indenture, filed as Exhibit 4.1(a) to
Texaco Inc.'s Current Report on Form 8-K, dated October 12, 1990 and filed on October
15, 1990, SEC File No. 1-27.
*4.1(b) --Form of Second Supplement to the First Supplemental Indenture, dated as of August 5,
1997, filed as Exhibit 4.1(b) to Texaco Inc.'s Form 10-Q for the quarterly period ended
June 30, 1997, and filed on August 13, 1997, SEC File
No. 1-27.
*4.2(a) --Form of Guaranteed Note, filed as Exhibit 4.2(a) to Texaco Capital Inc.'s Registration
Statement on Form S-3 (Registration No. 33-40309) on May 1, 1991.
*4.2(b) --Form of Guaranteed Debenture, filed as Exhibit 4.2(b) to Texaco Capital Inc.'s
Registration Statement on Form S-3 (Registration No. 33-40309) on May 1, 1991.
*4.3(a) --Form of Warrant Agreement, for Warrants Sold Attached to Debt Securities (including form
of Warrant Certificate), filed as Exhibit 4.3(a) to Texaco Capital Inc.'s Registration
Statement on Form S-3 (Registration No. 33-40309) on May 1, 1991.
*4.3(b) --Form of Warrant Agreement, for Warrants Sold Alone (including form of Warrant
Certificate), filed as Exhibit 4.3(b) to Texaco Capital Inc.'s Registration Statement on
Form S-3 (Registration No. 33-40309) on May 1, 1991.
5 --Opinion of Paul R. Lovejoy, Esq. as to legality of the Securities.
*12.1 --Computation of Ratio of Earnings to Fixed Charges, filed as Exhibit 12 to Texaco Inc.'s
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1997, on
November 13, 1997, SEC File No. 1-27.
12.2 --Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
23.1 --Consent of Arthur Andersen LLP.
23.2 --The consent of Paul R. Lovejoy, Esq. is contained in his opinion filed as Exhibit 5 to
this Registration Statement.
*24.1 --Power of Attorney. Powers of Attorney for certain directors and officers of Texaco Inc.
authorizing, among other things, the signing of registration statements on their behalf,
have been filed as Exhibit 24 to Texaco Inc.'s Registration Statement on Form S-4, dated
and filed September 29, 1997, Registration No. 333-36679.
24.2(a to d) --Power of Attorney. Powers of Attorney for the directors and certain officers of Texaco
Capital Inc. authorizing, among other things, the signing of registration statements on
their behalf.
</TABLE>
- - ------------------------
*Previously filed.
<PAGE>
EXHIBIT 1.1
TEXACO INC. TEXACO CAPITAL INC.
2000 WESTCHESTER AVENUE 1013 CENTRE ROAD
WHITE PLAINS, NEW YORK 10650 WILMINGTON, DELAWARE 19801
------------------------
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
---------------------
February 18, 1998
To: The firm or firms who may be
Purchasers of Purchased Securities
Dear Sirs:
Texaco Inc. ("Texaco") and Texaco Capital Inc. (the "Company"), both
Delaware corporations, are considering issuing and selling in the United States,
from time to time, up to $1,250,000,000 (or the equivalent in foreign
denominated currency or units based on or related to currencies, including
European Currency Units) of their securities ("Securities"), or if any
Securities are to be issued at original issue discount, such greater amount as
shall result in net proceeds of $1,250,000,000. Debt Securities issued by the
Company will be guaranteed ("Guaranties") by Texaco. The Company and Texaco have
registered the Securities with the Securities and Exchange Commission
("Commission") under a registration statement, including a prospectus, filed
with the Commission in accordance with the provisions of the Securities Act of
1933 ("Act") and the applicable rules and regulations, including specifically
Rule 415, of the Commission. The registration statement, as subsequently amended
or supplemented by the supplement to the Prospectus referred to in Section 2,
and all prior amendments and supplements thereto (other than supplements
relating to Securities that are not Purchased Securities) (as hereinafter
defined) is referred to as the "Registration Statement" and the prospectus, as
so amended or supplemented, including all material incorporated by reference
therein, is referred to as the "Prospectus."
Debt Securities, when issued by the Company, will be issued in series under
an Indenture dated as of August 24, 1984 as (1) supplemented and restated by the
First Supplemental Indenture dated as of January 31, 1990, (2) further amended
by the First Supplement to the First Supplemental Indenture dated as of October
11, 1990, and (3) further amended by the Second Supplement to the First
Supplemental Indenture, dated as of August 5, 1997, (as so supplemented and
amended, the "Indenture") among the Company, Texaco and The Chase Manhattan
Bank, as Trustee (the "Trustee"), heretofore filed with the Commission and
qualified under the Trust Indenture Act of 1939, as amended ("TIA") and the
rules and regulations applicable to the TIA.
Debt Securities, when issued by Texaco, will be issued in series under an
indenture to be entered into between Texaco and a trustee and filed with the
Commission and qualified under the TIA.
The Common Stock of Texaco is described in its Certificate of Incorporation.
Preferred Stock, when issued by Texaco, will be described in a Certificate
of Designations to be filed by Texaco with the Secretary of State of the State
of Delaware.
Depositary Shares, when issued by Texaco, will be deposited with a
depositary under a Deposit Agreement with a depositary as specified in the
Underwriting Agreement.
Warrants, when issued, will be issued under a warrant agreement ("Warrant
Agreement") among the Company, Texaco and a bank or trust company as warrant
agent as specified in the Underwriting Agreement.
The various series of Securities may be issued in United States dollars or a
foreign denominated currency or units based on or related to currencies (such as
the European Currency Units) and may have varying interest rates, maturities,
redemption provisions, exercise prices, expiration dates and selling prices
<PAGE>
and will be subject to such other terms and conditions as may be determined at
the time of the sale of each series of Securities. Particular series of the
Securities may be sold to one or more firms for resale in accordance with the
terms of offering determined at the time of sale.
The series of Securities involved in a sale are referred to as the
"Purchased Securities," and the firm or firms which agree to purchase the
Purchased Securities are referred to individually as a "Purchaser" and
collectively as the "Purchasers."
1. UNDERWRITING AGREEMENT. (a) The obligation of the Company or Texaco to
sell Purchased Securities, the obligation of Texaco to guarantee Purchased
Securities and the obligation of a Purchaser to purchase the Purchased
Securities will be evidenced by facsimile exchange or other written
communications ("Underwriting Agreement") at the time the Company or Texaco
determines to sell Purchased Securities, Texaco agrees to guarantee Debt
Securities, and a Purchaser agrees to purchase Purchased Securities.
(b) An Underwriting Agreement shall incorporate by reference the provisions
of this Agreement and be substantially in the form of Exhibit A hereto and shall
specify:
(i) the name of each Purchaser purchasing the Purchased Securities and
the name of the Purchaser or Purchasers who shall act as representative for
all of the Purchasers (the "Representative," whether one or more);
(ii) the number of shares of Common Stock or Preferred Stock, the
principal amount and denomination of Debt Securities, the number of
Depositary Shares or the number of Warrants to be purchased by each
Purchaser;
(iii) the purchase price to be paid by the Purchasers for the Purchased
Securities;
(iv) the terms of any Delayed Delivery Contracts (as hereinafter
defined);
(v) the terms and conditions of the Purchased Securities not otherwise
specified in the Indenture, Certificate of Designations, Deposit Agreement
or Warrant Agreement, such as the interest rate, maturity, redemption
provisions, sinking fund requirements, exercise price of the Warrants, the
principal amount of Debt Securities issuable upon exercise of one such
Warrant ("Warrant Securities"), the date after which Warrants are
exercisable, the expiration date thereof and the date, if any, after which
the Warrants are detachable;
(vi) the time and date of delivery of and payment for the Purchased
Securities ("Closing" or "Closing Date") including the form of payment;
(vii) the details of the terms of the offering of the Purchased
Securities to the public, which will be reflected in a supplement to the
Prospectus relating to the offering of the Purchased Securities; and
(viii) the file number of the registration statement relating to the
purchased securities; and
(ix) any other changes which may be agreed to at the time.
(c) If more than one firm agrees to purchase the Purchased Securities, the
obligation of each Purchaser shall be several and not joint. Purchased
Securities, when delivered, will be in such denominations and registered in such
names as the Purchasers request and Debt Securities will have the Guaranties
endorsed thereon.
(d) If the Company or Texaco agrees, and the Underwriting Agreement so
provides, the Purchasers may solicit offers to purchase Purchased Securities on
the terms and subject to the conditions set forth in the supplement to the
Prospectus pursuant to "Delayed Delivery Contracts" substantially in the form of
Exhibit H attached hereto but with such changes therein as the Company or Texaco
may authorize or approve. Delayed Delivery Contracts are to be with
institutional investors approved by the Company or Texaco and of the types set
forth in the Prospectus. On the Closing Date the Company or Texaco will pay
2
<PAGE>
the Representative as compensation, for the accounts of the Purchasers, the fee
set forth in the Underwriting Agreement in respect of the principal amount of
Purchased Securities sold under Delayed Delivery Contracts. The Purchasers will
not have any responsibility in respect of the validity or the performance of
Delayed Delivery Contracts.
If the Company or Texaco executes and delivers Delayed Delivery Contracts
with institutional investors, the Purchased Securities so sold shall be deducted
from the Purchased Securities to be purchased by the several Purchasers and the
aggregate principal amount of Purchased Securities to be purchased by each
Purchaser shall be reduced pro rata in proportion to the principal amount of
Purchased Securities set forth opposite each Purchaser's name in the
Underwriting Agreement, except to the extent that the Representative determines
that such reduction shall be otherwise and so advises the Company or Texaco.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY AND TEXACO. In
connection with each purchase, sale and offering of Purchased Securities:
(a) The Company and Texaco severally represent and warrant to each
Purchaser that:
(i) the Registration Statement has become effective;
(ii) each document of Texaco, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934 (the "1934 Act") and incorporated
by reference in the Prospectus complied, or will comply when filed, in
all material respects with the 1934 Act and the rules and regulations
thereunder;
(iii) the Indenture complies in all material respects with the TIA;
(iv) each part of the Registration Statement (including the documents
incorporated by reference therein), filed with the Commission pursuant to
the Act relating to the Purchased Securities, when such part became
effective, did not contain any 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;
(v) the Prospectus filed pursuant to Rule 424 under the Act complied
when so filed in all material respects with the Act and the applicable
rules and regulations thereunder;
(vi) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material
respects with the Act and the applicable rules and regulations
thereunder;
(vii) the Registration Statement and the Prospectus do not contain
and, as amended or supplemented, if applicable, will not contain any
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, except that
these representations and warranties do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
written information furnished to the Company or Texaco by the Purchasers
or the Trustee expressly for use therein; and
(viii) they are in compliance with all provisions of Florida Statutes
Section 517.075 (Chapter 92-198, Laws of Florida), relating to doing
business with Cuba.
(b) The Company and Texaco severally covenant and agree with each
Purchaser that:
(i) if at any time when a Prospectus relating to the Purchased
Securities is required to be delivered under the Act, any event occurs as
a result of which the Prospectus would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading,
3
<PAGE>
or if it is necessary at any time to amend or supplement the Registration
Statement or Prospectus to comply with the Act or the applicable rules or
regulations, the Company and Texaco will promptly advise the
Representative and will prepare and file with the Commission, at the
Company's or Texaco's own expense, an amendment or supplement which will
correct such statement or omission, or an amendment which will effect
such compliance PROVIDED, THAT, before amending or supplementing the
Registration Statement or the Prospectus with respect to the Purchased
Securities the Company or Texaco will furnish the Representative with a
copy of such proposed amendment or supplement;
(ii) the Company and Texaco will furnish to the Representative a copy
of the Registration Statement and, at the Company's or Texaco's own
expense, will print and deliver to the Purchasers at the locations
requested by them, the number of copies of the Prospectus as may be
reasonably requested in connection with the offering of the Purchased
Securities;
(iii) not later than 90 days after the end of the 12-month period
beginning at the end of the fiscal quarter of Texaco during which a
Closing Date occurs, Texaco will make generally available to
securityholders an unaudited, consolidated, condensed income statement
covering such 12-month period which will satisfy the provisions of
Section 11(a) of the Act and the Rules and Regulations thereunder;
(iv) the Company and Texaco will severally take such action as the
Representative may reasonably request and reimburse the Purchasers for
any expenses (including fees and disbursements of counsel) reasonably
incurred in connection with the qualification of the Purchased Securities
for sale and the determination of their eligibility for investment under
the laws of such jurisdictions as the Purchasers designate;
(v) the Company and Texaco will not, after an Underwriting Agreement
has been executed and delivered, and prior to the earlier of the Closing
Date or the date on which the distribution of the Purchased Securities
ceases, offer or sell any other series of Securities or other instruments
which are substantially similar to the Purchased Securities, without the
prior consent of the Representative, except for Securities issued or
other instruments issued pursuant to negotiations in progress at the time
an Underwriting Agreement is executed and delivered, provided the
Representative shall then have been so advised by the Company; and
(vi) the Company and Texaco will pay all expenses incidental to the
performance of their obligations under an Underwriting Agreement and any
fees charged by investment rating agencies in connection with the rating
of Purchased Securities.
3. CONDITIONS. The obligations of the Purchasers to purchase and pay for
any issue of Purchased Securities under an Underwriting Agreement will be
subject to the accuracy of the representations and warranties on the part of the
Company and Texaco herein on and as of the Closing Date, to the performance by
the Company and Texaco of their obligations hereunder and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company, Texaco or the
Purchasers, shall be contemplated by the Commission, and there shall have
been no material adverse change (not in the ordinary course of business) in
the financial condition of Texaco and its subsidiaries, taken as a whole,
from that set forth in or contemplated by the Registration Statement and the
Prospectus as supplemented or amended;
(b) Each Purchaser shall have received an opinion of Paul R. Lovejoy,
Esq., (or such other counsel as the Company or Texaco may designate and as
may be approved by the Representative) as counsel for the Company and
Texaco, dated the Closing Date, as to the matters and in substantially the
form set forth in Exhibit B hereto;
4
<PAGE>
(c) Each Purchaser shall have received an opinion of Davis Polk &
Wardwell, counsel for the Purchasers, dated the Closing Date, as to the
matters and in substantially the form set forth in Exhibit C;
(d) The Representative shall have received a certificate dated the
Closing Date signed by the Secretary or any Assistant Secretary of the
Company as to the matters and in substantially the form of Exhibit D hereto;
(e) The Representative shall have received (i) a certificate dated the
Closing Date and signed by a Vice President, the Treasurer or the
Comptroller of Texaco as to the matters and in substantially the form of
Exhibit E hereto, (ii) a certificate dated the Closing Date and signed by
the Secretary or any Assistant Secretary of Texaco as to the matters and in
substantially the form of Exhibit F hereto, and (iii) a certificate of the
Secretary of State of Delaware as of a recent date, as to the good standing
of Texaco and;
(f) The Representative shall have received a letter from Arthur Andersen
LLP dated the Closing Date, with respect to Texaco as to the matters and in
the form set forth in Exhibit G hereto, the Representative hereby agreeing
that the procedures reflected in Exhibit G are acceptable to it,
notwithstanding the descriptive legend in Exhibit G.
4. INDEMNIFICATION. (a) The Company and Texaco severally agree to
indemnify and hold harmless each Purchaser and each person, if any, who controls
any Purchaser within the meaning of Section 15 of the Act or Section 20 of the
1934 Act, from and against any and all expenses, losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or Prospectus (if used
when a Prospectus relating to the Purchased Securities is required to be
delivered under the Act), as amended or supplemented, or any preliminary
Prospectus, Prospectus or supplement to the Prospectus or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon written
information furnished to the Company or Texaco by such Purchaser expressly for
use therein.
(b) If any proceeding, including any governmental investigation, shall be
instituted involving any Purchaser or any person controlling such Purchaser, in
respect of which indemnity may be sought against the Company or Texaco, such
Purchaser shall promptly notify the Company and Texaco in writing, and the
Company or Texaco shall assume the defense thereof on behalf of such Purchaser
or controlling person, including the employment of counsel and payment of all
expenses. Any Purchaser or any such controlling person shall have the right to
employ separate counsel in any such proceeding and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser or such controlling person unless (i) the employment of such
counsel has been specifically authorized by the Company or Texaco or (ii) the
named parties to any such action (including any impleaded parties) include such
Purchaser or such controlling person and the Company or Texaco and such
Purchaser or such controlling person shall have been advised by its counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Company or Texaco (in which case neither
the Company nor Texaco shall have the right to assume the defense of such action
on behalf of such Purchaser or such controlling person, it being understood,
however, that the Company and Texaco shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Purchasers and
controlling persons, and such firm shall be designated in writing by the
Representative). All such fees and expenses shall be paid periodically as
incurred. Neither the Company nor Texaco shall be liable for any settlement of
any such proceeding effected without its written consent,
5
<PAGE>
but if settled with the written consent of the Company and Texaco or if there be
a final judgment for the plaintiff in any such action, the Company and Texaco
agree to indemnify and hold harmless any Purchaser and any such controlling
person from and against any loss or liability by reason of such settlement or
judgment. Neither the Company nor Texaco shall, without the prior written
consent of the Purchaser or such controlling person, effect any settlement of
any pending or threatened proceeding in respect of which any Purchaser or any
person controlling such Purchaser is a party and indemnity has been sought
hereunder by such Purchaser or such controlling person, unless such settlement
includes an unconditional release of such Purchaser or such controlling person
from all liability on claims that are the subject matter of such proceeding.
(c) Each Purchaser severally agrees to indemnify and hold harmless each of
the Company and Texaco, its directors, its officers who sign the Registration
Statement and any person controlling the Company or Texaco to the same extent as
the foregoing indemnity from the Company and Texaco to each Purchaser, but only
with reference to written information furnished by such Purchaser expressly for
use in the Registration Statement or any preliminary Prospectus, Prospectus or
supplement to the Prospectus. In case any action shall be brought against the
Company or Texaco, or any of their directors or any officer or controlling
person in respect of which indemnity may be sought against any Purchaser, the
Purchaser shall have the rights and duties given to the Company and Texaco, and
the Company and Texaco, their directors or any such officer or controlling
person shall have the rights and duties given to the Purchaser, by paragraph
4(b).
(d) If the indemnification provided for in paragraph 4(a) or 4(c) is
unavailable to an indemnified party for any reason other than as specified
therein, or is insufficient in respect of any expenses, losses, claims, damages
or liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company or Texaco on the one hand and the Purchasers on
the other from the offering of the Purchased Securities or (ii) if the
allocation provided by clause (i) above 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 Company or
Texaco on the one hand and of the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company or Texaco on the one hand and the
Purchasers on the other in connection with the offering of the Purchased
Securities shall be deemed to be in the same proportion as the total net
proceeds from the offering of such Purchased Securities (before deducting
expenses) received by the Company or Texaco bear to the total underwriting
discounts and commissions received by the Purchasers in respect thereof. The
relative fault of the Company or Texaco on the one hand and of the Purchasers on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or Texaco or by the Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, Texaco and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this paragraph 4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph 4, no Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Purchased Securities underwritten and distributed to the
public by such Purchaser were offered to the public exceeds the amount of any
damages which such Purchaser has otherwise been
6
<PAGE>
required to pay by reason of 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 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchasers' obligations to contribute pursuant to this paragraph 4 are several,
in proportion to the respective principal amounts of Purchased Securities
purchased by each of such Purchasers, and not joint.
5. TERMINATION. An Underwriting Agreement shall be subject to termination,
in the discretion of the Representative, by notice given to the Company and
Texaco prior to the Closing Date, if prior thereto (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in the City
of New York shall have been declared by either Federal or New York State
authorities or (iii) there shall have occurred any material outbreak or material
escalation of hostilities or other national or international calamity or crisis
of such magnitude and severity in its effect on the financial markets of the
United States of America as, in the reasonable judgment of the Representative,
to prevent or materially impair the marketing, or enforcement of contracts for
sale, of Purchased Securities.
6. DEFAULT. (a) If any Purchaser shall fail to purchase the Purchased
Securities which it has agreed to purchase pursuant to an Underwriting Agreement
("Defaulting Purchasers" whether one or more) and:
(i) the aggregate principal amount of the Purchased Securities which the
Defaulting Purchasers agreed but failed to purchase is 10% or less of the
aggregate principal amount of all of the Purchased Securities, the other
Purchasers ("Non-Defaulting Purchasers" whether one or more) may make
arrangements satisfactory to the Company and Texaco for the purchase of such
Purchased Securities by other persons, including any of the Non-Defaulting
Purchasers, but if no such arrangements are made by the Closing Date, the
Non-Defaulting Purchasers shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Purchased Securities
which the Defaulting Purchasers agreed but failed to purchase; provided that
in no event shall the principal amount of Purchased Securities which any
Non-Defaulting Purchaser has agreed to purchase hereunder be increased
pursuant to this Section 6(a) by an amount in excess of one-ninth of such
principal amount, without the written consent of the Non-Defaulting
Purchaser; or
(ii) the aggregate principal amount of the Purchased Securities which
the Defaulting Purchasers agreed but failed to purchase is more than 10% of
the aggregate principal amount of all of the Purchased Securities and
arrangements satisfactory to the Non-Defaulting Purchasers, the Company and
Texaco for the purchase of such Purchased Securities are not made within
thirty-six hours after such default, the Underwriting Agreement will
terminate without liability on the part of the Non-Defaulting Purchasers,
the Company or Texaco. As used in this Section, the term "Purchaser"
includes any person substituted for a Purchaser under this Section. Nothing
herein will relieve a Defaulting Purchaser from liability for its default.
(b) If the Company or Texaco shall fail or refuse to comply with the terms
of an Underwriting Agreement after the date thereof, the Purchasers by notice
given to the Company and Texaco at any time prior to the Closing Date may
terminate the Underwriting Agreement, in which event the Company and Texaco
shall be severally liable for and shall reimburse the Purchasers for all
out-of-pocket expenses (including the fees and disbursements of counsel)
reasonably incurred by the Purchasers in connection with the offer and sale of
the Purchased Securities but the Company and Texaco shall not be otherwise
liable to the Purchasers.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. The respective
representations, warranties, agreements and indemnities of the Company, Texaco
and the Purchasers set forth in or made pursuant hereto will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of the Purchasers, the Company, Texaco or
any of their officers or directors or any controlling person, and will survive
delivery of and payment for Purchased Securities. The provisions of
7
<PAGE>
Sections 2(b)(iv) and (vi) and 4 hereof shall survive the termination or
cancellation of any Underwriting Agreement.
8. NOTICES. All communications hereunder will be in writing, and, if sent
to the Purchasers, will be mailed, delivered or telecopied and confirmed to them
at the address set forth in an Underwriting Agreement, if sent to the Company,
will be mailed, delivered or telecopied and confirmed to it at 1013 Centre Road,
Wilmington, Delaware 19801, with a copy to Texaco, and, if sent to Texaco, will
be mailed, delivered or telecopied and confirmed to it at 2000 Westchester
Avenue, White Plains, New York 10650, Attention: Treasurer, with a copy to the
Company.
9. SUCCESSORS. An Underwriting Agreement will inure to the benefit of and
be binding upon the parties hereto and thereto and their respective successors
and the officers and directors and controlling persons referred to in Section 4,
and no other person will have any right or obligation thereunder.
10. MISCELLANEOUS. An Underwriting Agreement may be executed in one or
more counterparts and it is not necessary that signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement. An Underwriting Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
11. REPRESENTATIVE OF PURCHASERS. When a Representative has been
designated in the Underwriting Agreement, the Representative is authorized to
act for the several Purchasers in connection with any sale of Purchased
Securities and any action taken under an Underwriting Agreement by a
Representative shall be binding upon all the Purchasers.
Very truly yours,
<TABLE>
<S> <C>
TEXACO CAPITAL INC.
By
TEXACO INC.
By
</TABLE>
8
<PAGE>
EXHIBIT A
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
UNDERWRITING AGREEMENT*
[Insert Date]
<TABLE>
<S> <C>
TEXACO CAPITAL INC. TEXACO INC.
1013 Centre Road 2000 Westchester Avenue
Wilmington, Delaware 19801 White Plains, NY 10650
ATTENTION: Treasurer
</TABLE>
Dear Sirs:
The undersigned (the "Representative") understands that [Texaco Inc.,
("Texaco")] [Texaco Capital Inc.], a Delaware corporation (the "Company"),
proposes to issue and sell [$ aggregate principal amount of [Title of Debt
Securities (the "Debt Securities")] [ shares of Common Stock] [ shares
of Preferred Stock, Series ] [ Depositary Shares]. [We understand
that the Company also proposes to issue and sell [number] of warrants (the
"Warrants") to purchase $ aggregate principal amount of [title of
securities] (the "Warrant Securities"), each of which Warrants will entitle the
holder thereof to purchase $ principal amount of Warrant Securities [and the
Warrants and Warrant Securities are to be issued and sold in units consisting of
$ principal amount of Debt Securities and [[number] of] Warrants]]. The
Debt Securities [and the Warrant Securities] will be guaranteed by Texaco, Inc.
The [Debt Securities] [Debt Securities with Warrants] [and] [Warrants] [Common
Stock] [Preferred Stock] [Depositary Shares] are herein [collectively] called
the "Purchased Securities." Subject to the terms and conditions set forth herein
or incorporated by reference herein it is agreed that [Texaco] [the Company]
will sell, [Texaco will guarantee] and the Purchaser or Purchasers named below
(such purchaser or purchasers being herein called the "Purchasers") will
purchase, severally and not jointly, the [amounts of Securities] [number of
shares] set forth below opposite their names [at % of the aggregate principal
amount of the Debt Securities and accrued interest thereon, if any, from
, 199 to the date of payment and delivery]:
<TABLE>
<CAPTION>
PRINCIPAL NUMBER OF
NAME AMOUNT SHARES
- - ------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
$
Total.......................................................... $
</TABLE>
- - ------------------------
* The provisions of this Form will be completed or modified as appropriate to
reflect the terms of the Securities. Monetary amounts may be in U.S. dollars
or the equivalent thereof in foreign denominated coin or currency or units
based on or relating to currencies (including European Currency Units
(ECU)).
A-1
<PAGE>
The Purchasers will pay for such Purchased Securities upon delivery thereof
at [state location] at [state time] (New York time) on [state date], or at such
other time not later than [state date] as shall be designated by the
Representative, in [insert type of funds].
[The Debt Securities to be purchased shall have the following terms:]
[Currency of Denomination:]
[Currency of Payment:]
Maturity:
Interest Rate:
[Form and Denomination:]
[Redemption Provisions:]
Interest Payment Dates:
[Other terms:]
[The Warrants to be purchased shall have the following terms:]
[Exercise price:]
[Detachability Date:]
[Exercise commencement date:]
[Expiration date:]
[Other terms:]
[The Warrant Securities shall have the following terms:]
[Interest Rate:]
[Maturity:]
[Redemption:]
[Interest Payment Dates:]
[Other terms:]
[The Preferred Stock shall have the following terms:]
[Designation, Purchase Price and Description:]
[Liquidation Preference Per Share:]
[Number of Shares:]
[Purchase Price Per Share (including accrued dividends, if any):]
[Other Provisions:]
[Delayed Delivery Contract Arrangements:]
[Fee:]
[Minimum principal amount of each contract:]
[Maximum principal amount of all contracts:]
A-2
<PAGE>
Except as otherwise set forth herein, all the provisions contained in the
document entitled Underwriting Agreement Standard Provisions dated as of
February 18, 1998, filed as an exhibit to the Registration Statement (No.
33- ), a copy of which has previously been received by the Representative,
are herein incorporated by reference in their 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.
Please confirm your agreement by having an officer of the Company and Texaco
sign a copy of this Agreement in the space set forth below and returning it to
us no later than [state date and time] by wire, fax, telex or other means.
Very truly yours,
[Name of Representative]
By ___________________________________
Acting severally on behalf of
itself and the several
Purchasers named above
Accepted as of the date first above
written:
TEXACO CAPITAL INC.
By ___________________________________________
TITLE:
TEXACO INC.
By ___________________________________________
TITLE:
A-3
<PAGE>
EXHIBIT B
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
OPINION OF PAUL R. LOVEJOY, ESQ.
[Closing Date]
To the Purchasers party to the
Underwriting Agreement dated with
TEXACO CAPITAL INC. and TEXACO INC.
c/o [name and address of Representative of the Purchasers]
Dear Sirs:
I have acted as Counsel for Texaco Capital Inc. (the "Company") a Delaware
corporation and Texaco Inc. ("Texaco") a Delaware corporation, in conjunction
with the issuance and sale today by the Company to you pursuant to the terms of
the aforementioned Underwriting Agreement (the "Underwriting Agreement")
incorporating by reference the provisions of the Underwriting Agreement Standard
Provisions dated February 18, 1998 ("Standard Provisions") of [$ principal
amount of its % due ] [ shares of ]
("Purchased Securities") [guaranteed by Texaco (the "Guaranties")] [together
with the] [[number] of warrants (the "Warrants") to purchase [name of security]
(the "Warrant Securities")] to be issued pursuant to the Indenture. This opinion
is given pursuant to Paragraph 3(b) of the Standard Provisions. Capitalized
terms not otherwise defined herein are defined as set forth in the Underwriting
Agreement or the Standard Provisions.
I have participated in the preparation of the Underwriting Agreement, the
Standard Provisions, the Indenture, the Purchased Securities[, the Guaranties,]
[the Deposit Agreement,] [the Warrant Agreement,] the Registration Statement,
the Prospectus and the supplement to the Prospectus. As to various questions of
fact material to my opinion I have relied upon representations made in the
Underwriting Agreement and the Standard Provisions and upon the certificates of
the Officers of the Company and Texaco. I have also examined such certificates
of public officials, corporate documents and records and other certificates,
opinions and instruments and have made such other investigations as I have
deemed necessary in connection with the opinions hereinafter set forth.
Based on the foregoing and upon such investigation as I have deemed
necessary, I give you my opinion as follows with respect to the Company:
1. ORGANIZATION AND STANDING, ETC. OF THE COMPANY. The Company has been
duly organized and is validly existing in good standing under the laws of
Delaware and is duly qualified to do business and is in good standing as a
foreign corporation in all jurisdictions where the nature of its properties
or business requires it.
2. CORPORATE POWER, ETC. TO PERFORM THE UNDERWRITING AGREEMENT, ETC. The
Company has the corporate power and authority to enter into and perform the
Underwriting Agreement, [the Delayed Delivery Contracts], [the Indenture]
[the Deposit Agreement,] [, the Warrant Agreement] and to issue and deliver
the Purchased Securities.
3. EXECUTION AND DELIVERY, ETC. BY THE COMPANY OF THE UNDERWRITING
AGREEMENT, ETC. The execution, delivery and performance by the Company of
the Underwriting Agreement, [the Delayed Delivery Contracts], [the
Indenture,] [the Deposit Agreement,] [the Warrant Agreement], [and] the
Purchased Securities[, and any Warrant Securities] have been duly authorized
by all requisite corporate action, and the Underwriting Agreement, [the
Delayed Delivery Contracts], [the Indenture,] [the Deposit
B-1
<PAGE>
Agreement,] [the Warrant Agreement] and the Purchased Securities have been
duly executed and delivered by the Company.
4. LEGALITY, ENFORCEABILITY, ETC. OF THE COMPANY'S OBLIGATIONS UNDER THE
UNDERWRITING AGREEMENT, ETC. The Underwriting Agreement, [the Delayed
Delivery Contracts], the Indenture[, the Warrant Agreement] and the
Purchased Securities [(in both temporary and definitive form)] are, and the
Warrant Securities will be, legal, valid and binding obligations of the
Company and are [(or, in the case of the Warrant Securities, will be)]
enforceable against the Company in accordance with their terms, except as
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and except as rights to
indemnity and contribution under the Underwriting Agreement may be limited
under applicable law. The enforceability of the Company's obligations under
the Underwriting Agreement, [the Delayed Delivery Contracts], [the
Indenture,] [the Deposit [Agreement,] [the Warrant Agreement], the Purchased
Securities [and the Warrant Securities] is or, in the case of Warrant
Securities, will be,] subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
5. COMPLIANCE, ETC. WITH CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE
COMPANY. The execution and delivery of the Underwriting Agreement, [the
Delayed Delivery Contracts], [the Indenture,] [the Deposit Agreement,] [,
the Warrant Agreement] and the Purchased Securities and the performance by
the Company of their terms and the issuance of the Purchased Securities do
not conflict with or result in a violation of the Certificate of
Incorporation or By-Laws of the Company or of any agreement, instrument,
order, writ, judgment or decree known to me to which the Company is a party
or is subject.
6. NO APPROVAL, ETC. REQUIRED. No approval, authorization or other
action by, or filing with, any governmental authority, is required in
connection with the execution and delivery by the Company of the
Underwriting Agreement, [the Delayed Delivery Contracts], [the Indenture,]
[the Deposit Agreement,] [the Warrant Agreement] or the Purchased
Securities.
Based on the foregoing and upon such investigation as I have deemed
necessary, I give you my opinion as follows with respect to Texaco:
1. ORGANIZATION AND STANDING, ETC. OF TEXACO. Texaco has been duly
organized and is validly existing in good standing under the laws of
Delaware and is duly qualified to do business and is in good standing as a
foreign corporation in all of the other states of the United States.
2. CORPORATE POWER, ETC. TO PERFORM THE UNDERWRITING AGREEMENT, ETC.
Texaco has the corporate power and authority to enter into and perform the
Underwriting Agreement, [the Delayed Delivery Contracts], [the Indenture],
[the Deposit Agreement,] [the Warrant Agreement] and to execute and deliver
the Guaranties.
3. EXECUTION AND DELIVERY, ETC. BY TEXACO OF THE UNDERWRITING AGREEMENT,
ETC. The execution, delivery and performance by Texaco of the Underwriting
Agreement, [the Delayed Delivery Contracts], [the Indenture], [the Deposit
Agreement,] [, the Warrant Agreement] and the Guaranties have been duly
authorized by all requisite corporate action, and the Underwriting
Agreement, [the Delayed Delivery Contracts], [the Indenture], [the Deposit
Agreement,] [, the Warrant Agreement] and Guaranties have been duly executed
and delivered by Texaco.
4. LEGALITY, ENFORCEABILITY, ETC. OF TEXACO'S OBLIGATIONS UNDER THE
UNDERWRITING AGREEMENT, ETC. The Underwriting Agreement, [the Delayed
Delivery Contracts], [the Indenture,] [the Deposit Agreement,] [the Warrant
Agreement] and the Guaranties [(in both temporary and definitive form)] are
[and, in the case of the Guaranties to be endorsed on the Warrant
Securities, will be,] legal, valid and binding obligations of Texaco and are
[(or in the case of the Guaranties to be endorsed on the Warrant Securities,
will be,)] enforceable against Texaco in accordance with their terms, except
as may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights in general and except as rights to
indemnity and contribution under the Underwriting Agreement may be
B-2
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limited under applicable law. The enforceability of Texaco's obligations
under the Underwriting Agreement, [the Delayed Delivery Contracts], [the
Indenture,] [the Deposit Agreement,] [the Warrant Agreement] and the
Guaranties is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
5. COMPLIANCE, ETC. WITH CERTIFICATE OF INCORPORATION AND BY-LAWS OF
TEXACO. The execution and delivery of the Underwriting Agreement, [the
Delayed Delivery Contracts], [the Indenture,] [the Deposit Agreement,] [the
Warrant Agreement] and the Guaranties and the performance by Texaco of their
terms and the issuance of the Guaranties do not conflict with or result in a
violation of the Certificate of Incorporation or By-Laws of Texaco or of any
agreement, instrument, order, writ, judgment or decree known to me to which
Texaco is a party or is subject.
6. NO APPROVAL, ETC. REQUIRED. No approval, authorization or other
action by, or filing with, any governmental authority, is required in
connection with the execution and delivery by Texaco of the Underwriting
Agreement, [the Delayed Delivery Contracts], [the Indenture,] [the Deposit
Agreement,] [the Warrant Agreement] or the Guaranties.
I give you my further opinion that:
1. QUALIFICATION OF THE INDENTURE. The Indenture has been duly qualified
under the TIA.
2. REGISTRATION STATEMENT IS EFFECTIVE, ETC. The Registration Statement
has become effective under the Act, and, to the best of my knowledge 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 contemplated under the Act, and the Registration Statement and
the Prospectus, as of their respective effective or issue dates or in the
case of documents incorporated by reference in the Prospectus as of the
respective dates such documents were filed with the Commission, complied as
to form in all material respects with the requirements of the Act and the
applicable rules and regulations; I have no reason to believe that (except
for the financial statements included therein, as to which I express no
opinion) the Registration Statement and Prospectus on the date of the
Underwriting Agreement contained any 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
(except as aforesaid) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and Prospectus of
material statutes, material legal and governmental proceedings and material
contracts and other documents involving the Company and Texaco are accurate
in all material respects and fairly present the information required to be
shown; and I do not know of any legal or governmental proceedings involving
the Company and Texaco required to be described in the Prospectus which are
not described as required, nor of any contracts or documents involving the
Company or Texaco of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required; it
being understood that I express no opinion as to information furnished by a
Purchaser specifically for use in the Registration Statement and the
Prospectus.
[To the extent any Notes are denominated in a currency of a country other
than the United States, no opinion is expressed with respect to the laws of any
such country. I note that (i) a New York statute provides that with respect to a
foreign currency obligation a court of the State of New York shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) a United States Federal
court in New York may award judgment in United States dollars, and I express no
opinion as to the rate of exchange such court would apply.]
[This opinion will be modified as necessary to reflect the issuance of
Securities other than Debt Securities by the Company.]
Very truly yours,
B-3
<PAGE>
EXHIBIT C
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
OPINION OF DAVIS POLK & WARDWELL
COUNSEL FOR THE UNDERWRITERS
[Closing Date]
[Names and addresses of Purchasers]
Gentlemen:
We have acted as counsel for the several purchasers (the "Purchasers") named
in the Underwriting Agreement dated as of (the "Underwriting
Agreement") incorporating by reference the provisions of the Underwriting
Agreement Standard Provisions dated February 18, 1998 ( the "Standard
Provisions"), with Texaco Capital Inc. (the "Company") and Texaco Inc.
("Texaco") in connection with the purchase by the several Purchasers of
$ principal amount of [name of security] [shares of ] (the
"Purchased Securities") of the Company, guaranteed (the "Guaranties") by Texaco,
to be issued pursuant to an Indenture dated as of August 24, 1984 as (1)
supplemented and restated by the First Supplemental Indenture dated as of
January 31, 1990, (2) further amended by the First Supplement to the First
Supplemental Indenture dated as of October 11, 1990, and (3) further amended by
the Second Supplement to the First Supplemental Indenture, dated as of August 5,
1997, (as so supplemented and amended, and as further amended by the Trust
Indenture Reform Act of 1990 (P.L. 101-550), the "Indenture") among the Company,
Texaco and The Chase Manhattan Bank, as Trustee [, [together with the] [[number
of]] Warrants (the "Warrants") to purchase $ principal amount of [name
of security] (the "Warrant Securities") to be issued pursuant to a Warrant
Agreement dated , 19 between the Company and [ ], as Warrant
Agent.]
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion, including those relating to the
authorization, execution and delivery by the Company and Texaco of the Indenture
[,the Warrant Agreement] and the Underwriting Agreement [and delayed delivery
contracts, with certain institutional investors ("Delayed Delivery Contracts"),]
the authorization, issuance and sale of the Purchased Securities by the Company
and the authorization and issuance by Texaco of the Guaranties.
We have participated in the preparation of the Company's registration
statement on Form S-3 (Registration No. ) (other than the documents
incorporated by reference in the prospectus included therein (the "Incorporated
Documents")) filed with the Securities and Exchange Commission (the
"Commission") pursuant to the provisions of the Securities Act of 1933, as
amended (the "Act"). Although we did not participate in the preparation of the
Incorporated Documents, we have reviewed such documents. In addition, we have
reviewed evidence that the registration statement was declared effective under
the Act on , 19 and that the Indenture was qualified under the Trust
Indenture Act of 1939, as amended, on . The registration statement
(including the Incorporated Documents) as amended to the date of the
Underwriting Agreement is hereinafter referred to as the "Registration
Statement", and the prospectus included in the Registration Statement as
supplemented by the prospectus supplement specifically relating to the Purchased
Securities is hereinafter referred to as the "Prospectus".
C-1
<PAGE>
Based upon the foregoing, we are of the opinion that:
1. the Indenture has been duly authorized, executed and delivered by the
Company and Texaco, is a valid and binding agreement of the Company and
Texaco in accordance with its terms and has been duly qualified under the
Trust Indenture Act of 1939, as amended;
2. [(a)] the Purchased Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Purchasers [or by
institutional investors, if any, pursuant to Delayed Delivery Contracts],
will be valid and binding obligations of the Company and entitled to the
benefit of the Indenture; [(b) the Warrants when issued, executed,
countersigned and delivered in accordance with the provisions of the Warrant
Agreement and paid for by the Purchaser, will be valid and binding
obligations of the Company and entitled to the benefits of the Warrant
Agreement; and (c) any Warrant Securities when executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid for
upon exercise of a Warrant in accordance with the provisions of the Warrant
Agreement, will be valid and binding obligations of the Company and entitled
to the benefits of the Indenture.]
3. [(a)] the Guaranties endorsed on the Purchased Securities pursuant to
the Indenture have been duly authorized by Texaco, and when executed in
accordance with the provisions of the Indenture and when the Purchased
Securities are executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Purchasers, such
Guaranties will be valid and binding obligations of Texaco in accordance
with their terms; [(b) the Guaranties to be endorsed on the Warrant
Securities pursuant to the Indenture have been duly authorized, and when
executed, and any Warrant Securities are executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid for
upon exercise of a Warrant in accordance with the provisions of the Warrant
Agreement, such Guaranties will be valid and binding obligations of Texaco
in accordance with their terms.]
4. the Underwriting Agreement has been duly authorized, executed and
delivered by the the Company and Texaco and is a valid and binding agreement
of the Company and Texaco, except as rights to indemnity and contribution
thereunder may be limited by applicable law; [and]
[5. the Delayed Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company and the Guarantor and are valid and
binding agreements of the Company and the Guarantor in accordance with their
terms;]
[6. the Warrant Agreement and [Deposit Agreement] has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company;]
[7. the statements in the Prospectus under "Description of the Notes",
"Description of the Debt Securities" [,"Description of the Warrants"] and
"Plan of Distribution", insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings.]
We have not ourselves checked the accuracy or completeness of, or otherwise
verified, the information furnished with respect to other matters in the
Registration Statement or the Prospectus. We have generally reviewed and
discussed with representatives of the Purchasers and with certain officers and
employees of, and counsel and independent public accountants for, the Company
and Texaco the information furnished, whether or not subject to our check or
verification. On the basis of such consideration, review and discussion, but
without independent check or verification, we (i) are of the opinion that
(except for the financial statements and related schedules included therein, as
to which we are not called upon to express an opinion) the Registration
Statement and the Prospectus comply as to form in all material respects with the
Act and the applicable rules and regulations thereunder and (ii) believe that
(except for the financial statements and related schedules included therein, as
to which we are not called upon to express a belief and except for that part of
the Registration Statement that constitutes the Form T-1 filed with the
C-2
<PAGE>
Commission relating to the Indenture) the Registration Statement and Prospectus
on the date of the Underwriting Agreement did not contain any 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, and that the
Prospectus (except as aforesaid) does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
We have examined the opinion dated of Paul R. Lovejoy, Esq.,
General Counsel of the Company and Assistant General Counsel of Texaco,
delivered to the Purchasers pursuant to paragraph 3(b) of the Standard
Provisions, and we believe that such opinion is responsive to the requirements
thereof. We have also examined the letter dated of Arthur Andersen
LLP, relating to the financial statements incorporated by reference in the
Registration Statement and the other matters referred to in such letter,
delivered to the Purchasers pursuant to paragraph 3(f) of the Standard
Provisions. We have participated in discussions with representatives of Arthur
Andersen LLP, relating to the form of such letter, and we believe that it is
substantially in the form agreed to.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
[This opinion will be modified as necessary to reflect the issuance of
Securities other than Debt Securities by the Company.]
Very truly yours,
C-3
<PAGE>
EXHIBIT D
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
SECRETARY'S CERTIFICATE
I, , [the] [an] [Assistant] Secretary of Texaco
Capital Inc., a Delaware corporation ("Company"), pursuant to the Underwriting
Agreement dated (the "Underwriting Agreement") (incorporating by
reference the Underwriting Agreement Standard Provisions dated February 18,
1998) among the Company, Texaco Inc. and the several Purchasers named therein,
DO HEREBY CERTIFY that:
(1) There has been no amendment to the Certificate of Incorporation of
the Company since [ .] [except set forth any changes].
(2) Attached hereto as Exhibit A is a true and complete copy of the
By-Laws of the Company.
(3) There are no proceedings pending or threatened for the dissolution
or liquidation of the Company or threatening its existence.
(4) There has been no amendment to those certain resolutions adopted by
the Board of Directors of the Company on [which resolutions were
adopted by unanimous written consent;] [at which a quorum for the
transaction of business was present and acting throughout;] and such
resolutions (a copy of which is attached hereto as Exhibit B) are still in
full force and effect in the form adopted.
(5) To the best of my knowledge and based on reasonable investigation no
stop order suspending the effectiveness of the Registration Statement
(Registration No. ) is in effect and no proceedings for such purpose
are pending or threatened by the Securities and Exchange Commission.
(6) The persons named below were duly elected to the offices indicated
and were serving in such capacities on the date on which they executed any
documents in connection with the transactions contemplated by the
Underwriting Agreement, and the signatures opposite their names are the
respective signatures of such persons: [set forth name, titles and specimen
signature of each person who signed any of the Underwriting Agreement,
Standard Provisions, Indenture, Warrant Agreement, Registration Statement or
Purchased Securities].
--------------------------------------
[ASSISTANT] SECRETARY OF
TEXACO CAPITAL INC.
Dated: [Date of Closing]
D-1
<PAGE>
EXHIBIT E
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
OFFICER'S CERTIFICATE
I, , [Title] of Texaco Inc., a Delaware corporation
("Texaco"), pursuant to the terms of the Underwriting Agreement dated
(incorporating by reference the Underwriting Agreement
Standard Provisions dated February 18, 1998), among Texaco Capital Inc., Texaco
and the several Purchasers named therein, DO HEREBY CERTIFY that to the best of
my knowledge and based on reasonable investigation: (1) no stop order suspending
the effectiveness of the Registration Statement on Form S-3 (Registration
No. ) is in effect and no proceedings for such purpose are pending
before or threatened by the Securities and Exchange Commission and (2) there has
been no material adverse change (not in the ordinary course of business) in the
financial condition of Texaco and its consolidated subsidiaries, taken as a
whole, from that set forth in or contemplated by said Registration Statement.
Dated: [Date of Closing]
______________________________________
[TITLE] OF TEXACO INC.
E-1
<PAGE>
EXHIBIT F
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
SECRETARY'S CERTIFICATE
I, , [the] [an] [Assistant] Secretary of Texaco
Inc., a Delaware corporation ("Texaco"), pursuant to the terms of the
Underwriting Agreement dated (the "Underwriting Agreement")
(incorporating by reference the Underwriting Agreement Standard Provisions dated
February 18, 1998) among Texaco Capital Inc., Texaco and the several Purchasers
named therein, DO HEREBY CERTIFY that:
(1) There has been no amendment to the Restated Certificate of
Incorporation of Texaco since [ ] [except set forth any changes].
(2) Attached hereto as Exhibit A is a true and complete copy of the
By-Laws of Texaco.
(3) There are no proceedings pending or threatened for the dissolution
or liquidation of Texaco or threatening its existence.
(4) There has been no amendment to those certain resolutions adopted by
the Board of Directors of Texaco on at which a quorum for the
transaction of business was present and acting throughout; and such
resolutions (a copy of which are attached hereto as Exhibit B) are still in
full force and effect in the form adopted.
(5) The persons named below were duly elected to the offices indicated
and were serving in such capacities on the date on which they executed any
documents in connection with the transactions contemplated by the
Underwriting Agreement, and the signatures opposite their names are the
respective signatures of such persons: [set forth name, titles and specimen
signature of each person who signed any of the Underwriting Agreement,
Standard Provisions, Indenture, Warrant Agreement, Registration Statement or
Guaranty].
______________________________________
[ASSISTANT] SECRETARY OF
TEXACO INC.
Dated: [Date of Closing]
F-1
<PAGE>
EXHIBIT G
TO
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
LETTER OF ARTHUR ANDERSEN LLP
[LEGEND. This draft represents a letter we would be prepared to sign as of
the effective date of the registration statement if the Representative had been
chosen at that date and requested such a letter. Based on our discussions with
Texaco Inc., the procedures set forth are similar to those that experience
indicates underwriters often request in such circumstances. The text of the
final letter will depend, of course, on whether the Representative who is
selected requests that other procedures be performed to meet his needs and
whether the Representative requests that any of the procedures be updated to the
date of issuance of the signed letter.]
[Names of Purchasers] [Date of Closing]
[c/o Representative]
Dear Sirs:
We have audited the consolidated balance sheet of Texaco Inc. and subsidiary
companies (the Company) as of December 31, [insert year of latest, audited,
publicly available financial statements], and [insert prior year of latest,
audited, publicly available financial statements], and the related statements of
consolidated income, retained earnings, stockholders' equity and cash flows for
each of the three years in the period ended December 31, [insert year of latest,
audited, publicly available financial statements], and the financial statement
schedules, all included or incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, [insert year of latest,
audited, publicly available financial statements], and incorporated by reference
in the registration statement (No. [33- ]) on Form S-3, filed on February
18, 1998 by Texaco Capital Inc. under the Securities Act of 1933 (the Act); our
reports with respect to the aforementioned consolidated financial statements and
financial statement schedules are also incorporated by reference in the
registration statement and prospectus. The registration statement, effective
, 19 and prospectus supplement dated , 19 , are herein
referred to as the registration statement and the prospectus, respectively.
In connection with the registration statement and prospectus:
1. We are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations thereunder.
2. In our opinion, the consolidated financial statements and financial
statement schedules of the Company audited by us and incorporated by
reference in the registration statement and prospectus comply in form in all
material respects with the applicable accounting requirements of the Act and
the Securities Exchange Act of 1934 and the related published rules and
regulations.
3. We have not audited any financial statements of the Company as of
any date or for any period subsequent to December 31, [insert year of
latest, audited, publicly available financial statements], although we have
performed an audit for the year ended December 31, [insert year of latest,
audited, publicly available financial statements], the purpose (and
therefore the scope) of such audit was to enable us to express our opinion
on the consolidated financial statements as of December 31, [insert year of
latest, audited, publicly available financial statements], and for the year
then ended, but not on the consolidated financial statements for any interim
period within that year. Therefore, we are
G-1
<PAGE>
unable to and do not express any opinion on the unaudited consolidated
balance sheet as of [insert either: March 31, March 31 and June 30, or March
31, June 30 and September 30], [insert the year subsequent to the latest,
audited, publicly available financial statements], the unaudited statement
of consolidated income for the [insert either: three month period ended
March 31: three month period ended March 31 and three and six month periods
ended June 30; or three month period ended March 31, three and six month
periods ended June 30 and three and nine month periods ended September 30],
[insert year subsequent to; and year of latest, audited, publicly available
financial statements], or the unaudited condensed statement of consolidated
cash flows for the [insert either: three month period ended March 31, three
and six month periods ended March 31 and June 30, or the three, six and nine
month periods ended March 31, June 30, and September 30], [insert year
subsequent to; and year of latest, audited, publicly available financial
statements], included in the Company's quarterly report[s] on Form 10-Q for
the quarter[s] ended [insert either: March 31, March 31 and June 30 or March
31, June 30 and September 30], [insert year subsequent to year of latest,
audited, publicly available financial statements], incorporated by reference
in the registration statement and prospectus, or on the financial position,
results of operations, or cash flows as of any date or for any period
subsequent to December 31, [insert year of latest, audited, publicly
available financial statements].*
4. For purposes of this letter, we have read the [insert current and
prior year if audited year-end financial statements are not available]
minutes of the meetings of the Board of Directors and the Executive
Committee of the Board of Directors of the Company, certain of which are in
draft form, as set forth in the minute books at [insert date five business
days prior to Closing]. Company officials having advised us that the minutes
of all such meetings through that date were set forth therein ; and have
carried out other procedures to [insert date five business days prior to
Closing] (our work did not extend to the period from [insert date four
business days prior to Closing], to [insert Closing Date], inclusive), as
follows:
With respect to the interim period[s] ended [insert either: March 31,
March 31 and June 30 or March 31, June 30, and September 30], [insert year
subsequent to year of latest, audited, publicly available financial
statements] and [year of latest, audited, publicly available financial
statements] we have:*
(a) Read the unaudited consolidated balance sheet as of [insert
either March 31, March 31 and June 30 or March 31, June 30 and September
30], [insert year subsequent to year of latest, audited, publicly
available financial statements] and unaudited statement of consolidated
income, and condensed statement of consolidated cash flows for the
[insert either: three month period ended March 31, three and six month
periods ended March 31 and June 30 or the three, six and nine month
periods ended March 31, June 30 and September 30], [insert year
subsequent to: and year of latest, audited publicly available financial
statements] incorporated by reference in the registration statement and
prospectus, and agreed the amounts contained therein with the Company's
accounting records as of [insert either: March 31, March 31 and June 30,
or March 31, June 30 and September 30], [insert year subsequent to; and
year of latest, audited, publicly available financial statements], and
for the [insert either: three month, three and six month or three, six
and nine month] periods then ended.
(b) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the unaudited
consolidated financial statements referred to in (a): (1) are in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
financial statements incorporated by reference in the registration
statement and prospectus, and (2) comply in form in all material respects
with the applicable accounting requirements of the Securities Exchange
Act of 1934 and
- - ------------------------
* Paragraph to be adjusted depending on date of letter.
G-2
<PAGE>
the related published rules and regulations. Those officials stated that
the unaudited consolidated financial statements (1) are in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements,
and (2) comply in form in all material respects with the applicable
accounting requirements of the Securities Exchange Act of 1934 and the
related published rules and regulations.
The foregoing procedures do not constitute an audit conducted in
accordance with generally accepted auditing standards. We make no
representations regarding the sufficiency of the foregoing procedures for
your purposes. Had we performed additional procedures or had we conducted an
audit or a review, other matters might have come to our attention that would
have been reported to you.
5. Company officials have advised us that no financial statements as of
any date or for any period subsequent to [insert either: March 31, June 30
or September 30], [insert year subsequent to year of latest, audited,
publicly available financial statements], are available; accordingly, the
procedures carried out by us with respect to changes in financial statement
items after [insert date of latest 10-Q filed with the SEC] have, of
necessity, been even more limited than those with respect to the periods
referred to in 4(a). We have made inquiries of certain Company officials who
have responsibility for financial and accounting matters regarding whether
there was at [insert date five business days prior to Closing], as compared
with amounts shown on the [insert date of latest 10-Q filed with the SEC]
unaudited consolidated balance sheet incorporated by reference in the
registration statement and prospectus:
(a) any change in excess of ten percent in consolidated total debt
(including capital lease obligations) with the exception of changes due
to foreign currency translation effects, scheduled debt repayments,
amortization of debt discount and conversions of subsidiary companies'
convertible debentures into common stock of Texaco Inc. [set forth any
other applicable exceptions]; or
(b) any change in excess of ten percent in capital stock of Texaco
Inc. with the exception of changes due to treasury stock transactions and
conversions of subsidiary companies' convertible debentures into common
stock of Texaco Inc. [set forth any other applicable exceptions]; or
(c) any decrease in total stockholders' equity with the exception of
changes due to treasury stock transactions and declaration of dividends
on capital stock [set forth any other applicable exceptions].
On the basis of these inquiries and of our reading of the minutes as
described in 4, nothing came to our attention that caused us to believe
that there were any such changes or decreases, except in all instances
for changes or decreases that the registration statement and prospectus
disclose have occurred or may occur.
6. We inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether the
information included under the heading "Ratio of earnings to fixed charges
of Texaco on a total enterprise basis (unaudited)" conforms in all material
respects with the requirements of item 503(d) of Regulation S-K. These
officials stated, in response to our inquiries, that this information
conforms in all material respects with the disclosure requirements of item
503(d) of Regulation S-K.
7. Our audit of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter comprised audit
tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For neither the
periods referred to therein nor any other period did we perform audit tests
for the purpose of expressing an opinion on individual balances of accounts
or summaries of selected transactions and, accordingly, we express no
opinion thereon.
G-3
<PAGE>
8. It should be understood that we made no representations regarding
questions of legal interpretation or regarding the sufficiency for your
purposes of the procedures enumerated in the preceding paragraphs; also,
such procedures would not necessarily reveal any material misstatement of
the amounts or ratios listed above. Further, we have addressed ourselves
solely to the foregoing data as set forth in the registration statement and
prospectus and make no representations as to the adequacy of disclosures or
as to whether any material facts have been omitted.
9. This letter is solely for the information of the addresses and to
assist the Underwriters in conducting and documenting their investigation of
the affairs of the Company in connection with the offering of the securities
covered by the registration statement and prospectus, and it is not to be
used, circulated, quoted, or otherwise referred to within or without the
underwriting group for any other purpose, including but not limited to the
registration, purchase, or sale of securities, nor is it to be filed with or
referred to in whole or in part in the registration statement and prospectus
or any other document, except that reference may be made to it in the
Underwriting Agreement or in any list of closing documents pertaining to the
offering of the securities covered by the registration statement and
prospectus.
Very truly yours,
G-4
<PAGE>
EXHIBIT H
TO UNDERWRITING AGREEMENT
STANDARD PROVISIONS
FORM OF
DELAYED DELIVERY CONTRACT
[Date]
Dear Sirs:
The undersigned agrees to purchase from Texaco Capital Inc., a Delaware
corporation (the "Company"), and the Company agrees to sell to the undersigned,
and Texaco Inc., a Delaware corporation ("Texaco") agrees to guarantee $
principal amount of the Company's [state title of debt securities] ("Debt
Securities") [together with warrants ("Warrants") to purchase $ principal
amount of the Company's [title of issue],] (collectively the "Purchased
Securities"), offered by the Company's Prospectus dated , 19 as
supplemented, receipt of which is hereby acknowledged, at a purchase price of
% of the principal amount thereof plus accrued interest and on the further
terms and conditions set forth in this contract. The undersigned does not
contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Purchased Securities in the
principal amounts on the delivery dates set forth below:
<TABLE>
<CAPTION>
DELIVERY PRINCIPAL PLUS ACCRUED
DATE AMOUNT INTEREST FROM:
- - --------------------------- ----------------- ------------------------------------
<S> <C> <C>
</TABLE>
Each date on which Purchased Securities are to be purchased hereunder is
hereinafter referred to as a "Delivery Date."
Payment for the Purchased Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by wire
transfer at the office of , New York, NY, at 10 a.m. (New York time)
on the Delivery Date, upon delivery to the undersigned of the Purchased
Securities to be purchased by the undersigned on the Delivery Date, duly
guaranted by Texaco in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
the Purchased Securities on the Delivery Date shall be subject to the conditions
that (1) the purchase of Purchased Securities to be made by the undersigned
shall not at any time of delivery be prohibited under the law of the
jurisdiction to which the undersigned is subject and (2) the Company shall have
sold, and delivery shall have taken place to the purchasers (the "Purchasers")
named in the Prospectus as supplemented referred to above, of such part of the
Securities as is to be sold to them. Promptly after completion of sale and
delivery to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied by
a copy of the opinion of counsel for the Company delivered to the Purchasers in
connection therewith.
Failure to take delivery of and make payment for Purchased Securities by any
Purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this contract.
H-1
<PAGE>
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
If this contract is acceptable to the Company, it is requested that the
Company and Texaco sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
This contract shall be governed by and construed in accordance with the laws
of the State of New York.
Yours very truly,
______________________________________
(PURCHASER)
By ___________________________________
______________________________________
(TITLE)
______________________________________
______________________________________
(ADDRESS)
Accepted as of the date first above written:
TEXACO CAPITAL INC.
By ____________________________________
TEXACO INC.
By ____________________________________
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed are as
follows: (Please print.)
<TABLE>
<CAPTION>
TELEPHONE NO.
(INCLUDING
NAME AREA CODE) DEPARTMENT
- - --------------------------- ----------------- ------------------------------------
<S> <C> <C>
</TABLE>
H-2
<PAGE>
EXHIBIT 1.2
<TABLE>
<S> <C>
TEXACO INC. TEXACO CAPITAL INC.
2000 WESTCHESTER AVENUE 1013 CENTRE ROAD
WHITE PLAINS, NEW YORK 10650 WILMINGTON, DELAWARE 19801
</TABLE>
DISTRIBUTION AGREEMENT
---------------------
SERIES 1998 MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
------------------------
February 00, 1998
To: Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Blaylock & Partners, L.P.
609 Fifth Avenue
12th Floor
New York, NY 10017
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, NY 10010
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Re: Distribution of Texaco Capital Inc. Notes issued in series under an
Indenture dated as of August 24, 1984, as (1) supplemented and restated by
the First Supplemental Indenture dated as of January 31, 1990, (2) amended
by the First Supplement to the First Supplemental Indenture dated as of
October 11, 1990, and (3) further amended by the Second Supplement to the
First Supplemental Indenture, dated as of August 5, 1997, among Texaco
Capital Inc., Texaco Inc. and The Chase Manhattan Bank, as Trustee (as so
supplemented and amended, the "Indenture")
Dear Sirs:
Texaco Capital Inc., a Delaware corporation (the "Company"), confirms its
agreement with you with respect to the issuance and sale in the United States,
from time to time, of up to U.S.$500,000,000 (or the equivalent in other
currencies or currency units), subject to reduction as a result of the sale of
other debt securities by the Company, of its Series 1998 Medium-Term Notes due
nine months or more from date of issue (collectively, "Notes") guaranteed
("Guaranties") by Texaco Inc. ("Texaco").
The Notes will be issued, and the terms thereof established, in accordance
with the Indenture.
<PAGE>
The following are the terms and conditions upon which you, the Company and
Texaco shall deal with respect to the Notes.
1. DEFINITIONS AND RULES OF CONSTRUCTION. (a) For the purposes of this
Agreement:
"Acceptance Date" means the date and time which the Company accepts an
offer to purchase Notes.
"Act" means the Securities Act of 1933 and the applicable rules and
regulations thereto, including specifically Rule 415, of the Commission.
"Agent" means any of you acting solely in the capacity as agent for the
Company pursuant to Section 3 and not as principal (collectively, the
"Agents").
"Basic Prospectus" means the prospectus in the form in which it appears
in the Registration Statement.
"Closing Date" means the date of delivery by the Company of any Notes
sold hereunder.
"Commencement Date" means the date and time referred to in Section 7(c)
hereof.
"Commission" means the Securities and Exchange Commission.
"Effective Date" means each date that the Registration Statement or the
Basic Prospectus is amended or supplemented.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Procedures" means the Medium-Term Notes Administrative Procedures
attached hereto as Exhibit B.
"Prospectus" means the Basic Prospectus together with the prospectus
supplement or supplements (each a "Prospectus Supplement") specifically
relating to Notes, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424.
"Purchaser" means any of you acting solely as principal pursuant to
Section 4 and not as agent.
"Registration Statement" means registration statement number 33-[00000]
(including the Exhibits thereto), as amended at the Commencement Date.
"Terms Agreement" means an agreement for the purchase of Notes by you as
principal, which agreement is substantially in the form of Exhibit A hereto.
"TIA" means the Trust Indenture Act of 1939, as amended, and the rules
and regulations applicable thereto.
"Trustee" means The Chase Manhattan Bank or any successor under the
Indenture.
"you" means any of you, acting either in your capacity as an Agent or a
Purchaser or in both such capacities.
(b) As used herein, the terms "Registration Statement," "Basic Prospectus,"
"Prospectus" and "Prospectus Supplement" shall include in each case the
documents, if any, incorporated by reference therein. The terms "supplement" and
"amendment" or "amend" as used herein shall include all documents filed by
Texaco pursuant to the Exchange Act, subsequent to the date of the Basic
Prospectus that are deemed to be incorporated by reference in the Prospectus.
2. THE NOTES. The Notes will be issued in denominations of U.S.$100,000, or
any larger amount that is an integral multiple of U.S.$1,000. Unless otherwise
specified in the applicable Pricing Supplement, Notes denominated in a Specified
Currency other than U.S. dollars will be issued in denominations of the
equivalent of U.S.$100,000 (rounded down to an integral multiple of 1,000 units
of such Specified
2
<PAGE>
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency as determined by reference to the noon
dollar buying rate in New York City for cable transfers of such Specified
Currency published by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the Business Day (as defined below) immediately preceding the date of
issuance; provided, however, in the case of ECUs, the Market Exchange Rate shall
be the rate of exchange determined by the Commission of the European Communities
(or any successor thereto) as published in the Official Journal of the European
Communities, or any successor publication, on the Business Day immediately
preceding the date of issuance. Additionally, Notes may have varying interest
rates, maturities and redemption provisions and will be subject to such other
terms and conditions as may be determined at the time of the sale of the Notes
and as shall be provided in a supplement to the Prospectus referred to below.
The form of the Note is attached hereto as Exhibit C.
3. PURCHASES AS AGENT. (a) The Company hereby appoints each of you as its
agent for the purpose of soliciting offers to purchase Notes from the Company by
others, and, on the basis of the representations and warranties herein
contained, but subject to terms and conditions herein set forth, you agree to
use your reasonable best efforts to solicit offers to purchase Notes upon terms
acceptable to the Company at such times and in such amounts as the Company shall
from time to time specify.
(b) Each of the Agents shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent that in its
judgment should be considered by the Company. The Company shall have the sole
right to accept offers to purchase Notes and may reject any offer in whole or in
part. Each Agent shall have the right to reject any offer to purchase Notes that
it shall consider to be unacceptable, and any such rejection shall not be deemed
a breach of such Agent's agreements contained herein.
(c) The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of at least one business
day's prior notice from the Company, the Agents will forthwith suspend
solicitations of offers to purchase Notes from the Company until such time as
the Company advised them that such solicitation may be resumed.
(d) Each Agent and the Company agree that all sales of Notes by an Agent
shall be made in accordance with the Procedures and the Company and each Agent
agree to perform the respective duties and obligations provided to be performed
by them in the Procedures. The Procedures may be amended only by written
agreement of the Company and you after notice to, and with the approval of, the
Trustee.
(e) The Company agrees to pay to each Agent, as consideration for the sale
of each Note resulting from a solicitation made by such Agent, a commission in
an amount equal to that percentage specified in Schedule I hereof of the
aggregate principal amount of the Notes sold.
(f) Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the Company
at such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent.
4. PURCHASES AS PRINCIPAL. (a) In addition, you may also purchase Notes as
Purchaser and, if requested by a Purchaser, the Company will enter into a Terms
Agreement relating to such sale that will provide for the sale of such Notes to
and the purchase thereof by the Purchaser.
(b) Unless otherwise specified in a Terms Agreement, an Agent purchasing
Notes as principal may resell such Notes to other dealers. Any such sales shall
be at a discount, which shall not exceed the amount set forth in the Prospectus,
as amended or supplemented in connection with the sale of such Notes.
(c) Each Purchaser's commitment to purchase Notes shall be deemed to have
been made on the basis of the representations and warranties of the Company and
Texaco herein contained and shall be subject to
3
<PAGE>
the terms and conditions herein set forth. Each agreement with a Purchaser to
purchase Notes as principal shall specify the principal amount of Notes to be
purchased by such Purchaser pursuant thereto, the maturity date of such Notes,
the price to be paid to the Company for such Notes, the interest rate, interest
rate formula, if any, applicable to such Notes and the Closing Date. Each such
agreement shall also specify any requirements for officers' certificates,
opinions of counsel and letters from the independent public accountants of the
Company pursuant to Section 7(c) hereof.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND TEXACO. In connection
with each purchase and sale of Notes the Company and Texaco severally represent
and warrant to you that as of the Commencement Date, as of each Acceptance Date,
as of each Closing Date and as of each Effective Date:
(a) The Registration Statement has become effective;
(b) Each document of Texaco, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied,
or will comply when filed, in all material respects with the Exchange Act
and the rules and regulations thereunder;
(c) The Indenture complies in all material respects with the TIA;
(d) Each part of the Registration Statement (including the documents
incorporated by reference therein) filed with the Commission pursuant to the
Act relating to the Notes, when such part became effective, did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(e) The Prospectus filed pursuant to Rule 424 under the Act complied
when so filed in all material respects with the Act and the applicable rules
and regulations thereunder.
(f) The Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with
the Act and the applicable rules and regulations thereunder.
(g) The Registration Statement and the Prospectus do not contain and, as
amended or supplemented, if applicable, will not contain any 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, except that these
representations and warranties do not apply to statements or omissions in
the Registration Statement or the Prospectus based upon written information
furnished to the Company or Texaco by you or the Trustee expressly for use
therein.
(h) There has been no material adverse change (not in the ordinary
course of business) in the financial condition of Texaco and its
consolidated subsidiaries, taken as a whole, from that set forth in or
contemplated by the Prospectus.
(i) They are in compliance with all provisions of Section 517.075 of the
Florida Statutes relating to doing business with Cuba.
6. COVENANTS OF THE COMPANY AND TEXACO. The Company and Texaco severally
covenant and agree with you that:
(a) At any time after the Commencement Date, unless the Company has
suspended solicitation, the Company will promptly advise each of you (i)
when the Prospectus, and any supplement thereto, shall have been filed with
the Commission pursuant to Rule 424(b); (ii) when, prior to the termination
of the offering of the Notes, any amendment of the Registration Statement
shall have been filed or become effective; (iii) of any request by the
Commission for any amendment of the Registration Statement or supplement to
the Prospectus or for any additional information; (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Notes for sale in
any
4
<PAGE>
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof;
(b) At any time after the Commencement Date, unless the Company has
suspended solicitation, neither the Company nor Texaco will file any
amendment of the Registration Statement or supplement to the Prospectus
relating to an offering of Notes unless the Company has furnished each of
you a copy for your review prior to filing and neither will file any such
proposed amendment or supplement to which any of you reasonably object in a
timely manner, PROVIDED, HOWEVER, that the foregoing requirement shall not
apply to any of Texaco's or the Company's periodic filings, with the
Commission filed pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the
Exchange Act, copies of which the Company will cause to be delivered to you
promptly after filing. Subject to the foregoing sentence, the Company will
cause each supplement to the Prospectus relating to the Notes to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to
you of such filing;
(c)(i) If, at any time when a Prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or in the opinion of the Company, it is necessary at
any time to amend or supplement the Registration Statement or the Prospectus
to comply with law, the Company will immediately notify each of you by
telephone (with confirmation in writing) to suspend solicitation of offers
to purchase Notes, and, if so notified by the Company, you shall forthwith
suspend such solicitation and cease using the Prospectus. If the Company
shall decide to amend or supplement the Registration Statement or
Prospectus, it shall so advise you promptly by telephone (with confirmation
in writing) and if the Company so elects, at its expense, it may prepare and
cause to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus that will correct such statement or
omission or effect such compliance and will supply such amended or
supplemented Prospectus to you in such quantities as you may reasonably
request. If such amendment or supplement is satisfactory in all respects to
you, upon the filing of such amendment or supplement with the Commission or
effectiveness of an amendment to the Registration Statement and provided
that any documents, certificates and opinions furnished to each of you
pursuant to Section 7 in connection with the filing of such amendment or
supplement are satisfactory in all respects to you, you will resume the
solicitation of offers to purchase Notes hereunder;
(ii) Notwithstanding Section 6(c)(i), until the distribution of any
Notes a Purchaser may own has been completed, if any event in Section
6(c)(i) occurs, the Company will, at its own expense, forthwith prepare and
cause to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or Prospectus as then amended or supplemented
that will correct such statement or omission, and will supply such amended
or supplemented Prospectus to you in such quantities as such Purchaser may
reasonably request. Upon the filing of such amendment or supplement with the
Commission or effectiveness of an amendment to the Registration Statement,
the Purchaser may resume its resale of Notes;
(d) The Company and Texaco will furnish you a copy of the Registration
Statement and, at the Company's or Texaco's own expense, will print and
deliver to you at the locations requested by you, the number of copies of
the Prospectus as may be reasonably requested;
(e) Texaco will make generally available to security holders as soon as
practicable an unaudited, consolidated, condensed income statement covering
such 12-month period which will satisfy the provisions of Section 11(a) of
the Act;
5
<PAGE>
(f) The Company and Texaco will severally take such action as you may
reasonably request and pay for any expenses (including reasonable fees and
disbursements of counsel) reasonably incurred in connection with the
qualification of the Notes for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as you may
designate;
(g) The Company and Texaco will not, between the date of agreement by a
Purchaser to purchase Notes and the Closing Date with respect to such Notes,
offer or sell any other series of Notes or other debt instruments which are
substantially similar to the Notes, without your prior consent, except for
Notes issued or other debt instruments issued pursuant to negotiations in
progress at the time such Agreement is executed and delivered, (provided
that you shall then have been so advised by the Company) and for commercial
paper issued in the ordinary course of business;
(h) The Company and Texaco will pay all expenses incidental to the
issuance and sale of the Notes including, without limitation, (i) the fees,
disbursements and expenses of Davis Polk & Wardwell, counsel for the Agents,
in connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the transactions
contemplated hereunder and (ii) any fees charged by investment rating
agencies in connection with the rating of the Notes;
(i) During the period when this Agreement is in effect, the Company and
Texaco will make available to you (i) copies of all reports and financial
statements as Texaco furnished to or filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and incorporated by
reference into the Registration Statement and (ii) such additional
information concerning the business and financial condition of the Company
and Texaco as you may from time to time reasonably request; and
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement relating
to any offering of securities other than the Notes or providing solely for
the specification of or a change in the maturity dates, the interest rates,
the issuance prices or other similar terms of any Notes sold pursuant
hereto), the Company and Texaco will deliver or cause to be delivered
promptly to each of you upon your request certificates, opinions and letter,
dated the date of the effectiveness of such amendment or the date of the
filing of such supplement, in form reasonably satisfactory to you, of the
same tenor as the certificates, opinions and letter referred to in Section
7(c) but modified to relate to the last day of the fiscal quarter for which
financial statements of Texaco were last filed with the Commission and to
the Registration Statement and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the filing of such
supplement.
7. CONDITIONS. Your obligations to solicit offers to purchase Notes as
Agent of the Company, your obligations to purchase Notes as principal pursuant
to any Terms Agreement or otherwise and the obligations of any other purchaser
to purchase Notes will be subject to the accuracy of the representations and
warranties on the part of the Company and Texaco herein, to the accuracy of the
statements of the Company's or Texaco's officers made in each certificate
furnished pursuant to the provisions hereof prior to or concurrently with any
such solicitation or purchase, to the performance and observance by the Company
or Texaco of all covenants and agreements herein contained on its part to be
performed and observed, in each case, at the time of such solicitation or
purchase and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall have
been instituted or, to your knowledge or the knowledge of the Company or
Texaco shall be contemplated by the Commission;
6
<PAGE>
(b) There shall have been no material adverse change (not in the
ordinary course of business) in the financial condition of Texaco and its
consolidated subsidiaries, taken as a whole, from that set forth in or
contemplated by the Prospectus;
(c) The following documents shall have been delivered to you at the
office of Davis Polk & Wardwell, your counsel, not later than 4:00 p.m., New
York time, on the date hereof, or at such other time or place you and the
Company may agree upon in writing, but in no event later than the day prior
to the date on which you begin soliciting offers to purchase Notes or the
first date on which the Company accepts any offer by you to purchase Notes
as principal (the "Commencement Date"):
(i) An opinion of Paul R. Lovejoy, Esq., (or such other counsel as
the Company or Texaco may designate and as may be approved by you) as
counsel for the Company and Texaco, dated the Commencement Date, as to
the matters and in substantially the form set forth in Exhibit D hereto;
(ii) An opinion of Davis Polk & Wardwell, counsel for you, dated the
Commencement Date, as to the matters and in substantially the form set
forth in Exhibit E hereto;
(iii) A certificate dated the Commencement Date signed by the
Secretary or Assistant Secretary of the Company as to the matters and in
substantially the form of Exhibit F hereto;
(iv) A certificate dated the Commencement Date and signed by a Vice
President, the Treasurer or the Comptroller of Texaco as to the matters
and in substantially the form of Exhibit G hereto;
(v) A certificate dated the Commencement Date and signed by the
Secretary or an Assistant Secretary of Texaco as to the matters and in
substantially the form of Exhibit H hereto; and
(vi) A letter from Arthur Andersen LLP dated the Commencement Date,
with respect to Texaco as to the matters and in form set forth in Exhibit
I hereto (you hereby agree that the procedures reflected in Exhibit I are
acceptable, notwithstanding the descriptive legend in Exhibit I.)
(d) There shall not have occurred and be continuing (i) a suspension or
material limitation of trading in securities generally on the New York Stock
Exchange, (ii) a general moratorium on commercial banking activities in The
City of New York declared by either Federal or New York State authorities or
(iii) any material outbreak or material escalation of hostilities or other
national or international calamity or crisis of such magnitude and severity
in its effect on the financial markets of the United States of America as,
in your reasonable judgment, to prevent or materially impair the marketing,
or enforcement of contracts for sale, of the Notes.
8. INDEMNIFICATION. (a) The Company and Texaco severally agree to indemnify
and hold harmless each of you and each person, if any, who controls each of you
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all expenses, losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus (if used when a prospectus
relating to the Notes is required to be delivered under the Act), as amended or
supplemented, or any preliminary Prospectus, Prospectus or supplement to the
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon written information furnished to the
Company or Texaco by you expressly for use therein.
(b) If any proceeding, including any governmental investigation, shall be
instituted involving you or any person controlling you, in respect of which
indemnity may be sought against the Company or Texaco, you shall promptly notify
the Company and Texaco in writing, and the Company or Texaco shall assume the
7
<PAGE>
defense thereof on behalf of you or such controlling person, including the
employment of counsel and payment of all related expenses. You or any such
controlling person shall have the right to employ separate counsel in any such
proceeding and participate in the defense thereof, but the fees and expenses of
such counsel shall be at your expense or of such controlling person, unless (i)
the employment of such counsel has been specifically authorized by the Company
or Texaco or (ii) the named parties to any such action (including any impleaded
parties) include you or such controlling person and the Company or Texaco and
you or such controlling person shall have been advised by your counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Company or Texaco, in which case neither
the Company nor Texaco shall have the right to assume the defense of such action
on behalf of you or such controlling person, it being understood, however, that
the Company and Texaco shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses or more than one separate firm of attorneys for you
and all such controlling persons (in addition to any local counsel) and that all
such fees and expenses shall be paid periodically as incurred. Neither the
Company nor Texaco shall be liable for any settlement of any such proceeding
effected without its written consent, but if settled with the written consent of
the Company and Texaco or if there be a final judgment for the plaintiff in any
such action, the Company and Texaco agree to indemnify and hold harmless you and
any such controlling person from and against any loss or liability by reason of
such settlement or judgment.
(c) You severally agree to indemnify and hold harmless each of the Company
and Texaco, its directors, its officers who sign the Registration Statement and
any person controlling the Company or Texaco to the same extent as the foregoing
indemnity from the Company and Texaco to you, but only with reference to written
information furnished by you expressly for use in the Registration Statement or
any preliminary Prospectus, Prospectus or supplement to the Prospectus. In case
any action shall be brought against the Company or Texaco, or any of their
directors or any officer or controlling person in respect of which indemnity may
be sought against you, you shall have the rights and duties given to the Company
and Texaco, and the Company and Texaco, their directors or any such officer or
controlling person shall have the rights and duties given to you, by Section
8(b).
(d) If the indemnification provided for in Section 8(a) or 8(c) is
unavailable to an indemnified party for any reason other than as specified
therein, or is insufficient in respect of any expenses, losses, claims, damages
or liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company or Texaco on the one hand and each Agent
participating in the offering of the Notes that gave rise to such losses,
claims, damages or liabilities (a "Relevant Agent") on the other from the
offering of such Notes or (ii) if the allocation provided by clause (i) above 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 Company or Texaco on the one hand and of each Relevant
Agent on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company or
Texaco on the one hand and each Relevant Agent on the other in connection with
the offering of the Notes shall be deemed to be in the same respective
proportion as the total net proceeds from the offering of such Notes (before
deducting expenses) received by the Company or Texaco bear to the total
discounts and commissions received by such Relevant Agent in respect thereof.
The relative fault of the Company or Texaco on the one hand and of each Relevant
Agent on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or Texaco or by such Relevant Agent and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
8
<PAGE>
If more than one Agent is a Relevant Agent in respect of a proceeding, each
Relevant Agent's obligation to contribute pursuant to this Section 8 shall be
several and not joint, and shall be in the proportion that the principal amount
of the Notes that are the subject of such proceeding and that were offered and
sold through such Relevant Agent bears to the aggregate principal amount of the
Notes that are the subject of such proceeding.
The Company, Texaco and you agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, you shall not be required to contribute any amount
in excess of the amount by which the total price at which the Notes referred to
in Section 8(d) above that were offered and sold to the public exceeds the
amount of any damages which you otherwise have been required to pay by reason of
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 Securities Act of 1933) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
9. POSITION OF THE AGENT. In soliciting offers to purchase the Notes, the
Agents are acting solely as agent for the Company, and not as principal, and do
not assume any obligation towards or relationship of agency or trust with any
purchaser of Notes. The Agents shall make reasonable efforts to assist the
Company in obtaining performance by each investor whose offer to purchase Notes
has been solicited by the Agents and accepted by the Company, but shall not have
any liability to the Company in the event any such purchase is not consummated
for any reason. If the Company shall default in its obligations to deliver Notes
to an investor whose offer an Agent has accepted, the Company shall hold such
Agent harmless against any loss, claim, damage or liability arising from or as a
result of such default and shall, in particular, pay to the Agent the commission
which it would have received had such sale been consummated.
10. TERMINATION. This Agreement may be terminated with respect to any of you
at any time either by the Company, by Texaco or by any of you with respect to
itself upon the giving of written notice of such termination to the other
parties hereto. Any Terms Agreement shall be subject to termination in your
absolute discretion on the terms set forth therein. The termination of this
Agreement shall not require termination of any agreement with a Purchaser and
the termination of any such agreement shall not require termination of this
Agreement. If this Agreement is terminated, the provisions of Section 3(e),
Sections 6(e) and (h), Section 8, Section 9, Section 10, Section 11, Section 12
and Section 14 shall survive; PROVIDED that if at the time of termination an
offer to purchase Notes has been accepted by the Company but the Closing Date
has not occurred, the provisions of Section 3(d), Sections 6(a), 6(b), 6(c)(ii),
6(f), 6(g), 6(i) and Section 7 shall also survive.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations, warranties, agreements and indemnities of the Company, Texaco
and you set forth in or made pursuant hereto will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of you, the Company, Texaco or any of their officers or
directors or any controlling person, and will survive delivery of and payment
for the Notes.
12. NOTICES. All communications hereunder will be in writing, and, if sent
to you, will be mailed, delivered or telecopied and confirmed to them at the
address set forth above, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 1013 Centre Road, Wilmington, Delaware 19801,
with a copy to Texaco, and, if sent to Texaco, will be mailed, delivered or
telecopied and confirmed to it at 2000 Westchester Avenue, White Plains, New
York 10650, Attention: Treasurer, with a copy to the Company.
9
<PAGE>
13. SUCCESSORS. The Agreement and any Terms Agreement will inure to the
benefit of and be binding upon the parties hereto and thereto and their
respective successors and the officers and directors and controlling persons
referred to in Section 8, and no other person will have any right or obligation
thereunder.
14. MISCELLANEOUS. This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties appear on
the same counterpart, but such counterparts together shall constitute but one
and the same agreement. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
<TABLE>
<S> <C> <C>
TEXACO CAPITAL INC.
By
TEXACO INC.
By
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof
By:
-----------------------------------------
Bear, Stearns & Co. Inc.
By:
-----------------------------------------
Blaylock & Partners, L.P.
By:
-----------------------------------------
Credit Suisse First Boston Corporation
By:
-----------------------------------------
Goldman, Sachs & Co.
By:
-----------------------------------------
Morgan Stanley & Co. Incorporated
By:
-----------------------------------------
Salomon Brothers Inc
</TABLE>
10
<PAGE>
SCHEDULE 1
TO DISTRIBUTION AGREEMENT
DATED FEBRUARY , 1998
TEXACO CAPITAL INC.
SERIES 1998 MEDIUM-TERM NOTE FEE SCHEDULE
<TABLE>
<CAPTION>
MATURITY COMMISSION
- - -------------------------------------- -----------
<S> <C> <C> <C>
9 months to < 12 months .125%
12 months to < 18 months .150%
18 months to < 2 years .200%
2 years to < 3 years .250%
3 years to < 4 years .350%
4 years to < 5 years .450%
5 years to < 6 years .500%
6 years to < 7 years .550%
7 years to < 8 years .600%
8 years to < 9 years .600%
9 years to < 10 years .600%
10 years to < 15 years .625%
15 years to < 20 years .700%
20 years to < 30 years .750%
30 years to < 50 years .875%
50 years to < 100 years 1.000%
> 100 years 1.125%
</TABLE>
11
<PAGE>
EXHIBIT A
TEXACO CAPITAL INC.
SERIES 1998 MEDIUM-TERM NOTES
TERMS AGREEMENT
[Date]
To: Texaco Capital Inc.
Re: Distribution Agreement dated February , 1998 (the "Distribution
Agreement")
The undersigned agrees to purchase the following principal amount of your
Series 1998 Medium-Term Notes with the following terms:
Principal Amount:
Specified Currency:
Fixed Rate Note:
Interest Rate:
Zero-Coupon Note:
Floating Rate Note:
Base Rate:
--CD Rate:
--Commercial Paper Rate:
--Federal Funds Rate:
--LIBOR:
--Treasury Rate:
--Other
Initial Interest Rate:
Interest Reset Period:
Interest Reset Dates:
Interest Determination Dates:
Interest Payment Period:
Interest Payment Dates:
Index Maturity:
Maximum Interest Rate:
Minimum Interest Rate:
Spread:
Spread Multiplier:
Issuer Able to Change Spread
or Spread Multiplier:
Maturity Date:
Extendible:
Final Maturity Date:
Issue Price:
Record Dates:
Interest Payment Dates:
Original Issue Date:
Book-Entry Note:
Certificated Note:
Redemption Provisons:
Repayment Provisions:
Currency Indexed Note:
- - --Denominated Currency:
- - --Indexed Currency:
- - --Face Amount:
- - --Base Exchange Rate:
- - --Calculation Agent:
- - --Reference Dealer:
Commodity Indexed Notes:
Other Terms:
The provisions of Sections 4-8 and 11-14 of the Distribution Agreement and
the related definitions are incorporated by reference herein and shall be deemed
to have the same force and effect as if set forth in full herein.
[The following information, opinions, certificates, letters and documents
referred to in Section 7(c) of the Distribution Agreement will be required:
______________]
[NAME OF PURCHASER]
By ___________________________________
Title:
Accepted:
TEXACO CAPITAL INC.
By ____________________________________
Title:
A-1
<PAGE>
EXHIBIT B
TEXACO CAPITAL INC.
SERIES 1998 MEDIUM-TERM NOTES ADMINISTRATIVE PROCEDURES
------------------------
Explained below are the administrative procedures and specific terms of the
offering of the Series 1998 Medium-Term Notes guaranteed by Texaco Inc.
("Texaco") (the "Notes") on a continuous basis by Texaco Capital Inc., (the
"Company") pursuant to the Distribution Agreement, dated as of February , 1998
(the "Distribution Agreement") between the Company, Texaco and [names of Agents]
(each an "Agent"). In the Distribution Agreement, each of the Agents has agreed
to use its best efforts to solicit purchases of the Notes. An Agent, as
principal, may purchase Notes (and then shall be referred to as a "Purchaser")
for its own account and if requested by a Purchaser, the Company and the
Purchaser will enter into a Terms Agreement, as contemplated by the Distribution
Agreement.
The Notes will be issued pursuant to the provisions of an indenture dated as
of August 24, 1984 as (1) supplemented and restated by the First Supplemental
Indenture dated as of January 31, 1990, as (2) further amended by the First
Supplement to the First Supplemental Indenture dated as of October 11, 1990 and
as (3) further amended by the Second Supplement to the First Supplemental
Indenture, dated as of August 5, 1997, (as so supplemented and amended, the
"Indenture"), among the Company, Texaco and The Chase Manhattan Bank, as trustee
("Trustee"). The Chase Manhattan Bank ("Chase") will be the Registrar, the
Calculation Agent, Exchange Rate Agent, Authenticating Agent, and Paying Agent
for the Notes and will perform the duties specified herein. The Notes will bear
interest at a fixed rate (the "Fixed Rate Notes"), which may be zero in the case
of certain original issue discount notes (the "OID Notes"), or at floating rates
(the "Floating Rate Notes"). The Notes will be issued in U.S. dollars or other
currencies, including composite currencies such as the European Currency Unit
(the "Specified Currency"). Notes will be represented by either a Global
Security (as defined below) delivered to Chase, as agent for the Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC
(a "Book-Entry Note") or a certificate delivered to the holder thereof or a
person designated by such holder (a "Certificated Note"). Certificated Notes
will not be exchangeable for Book-Entry Notes and, except in limited
circumstances, an owner of a Book-Entry Note will not be entitled to receive a
Certificated Note.
Book-Entry Notes, which currently may only be denominated and payable in
U.S. dollars, will be issued in accordance with the administrative procedures
set forth in Part I hereof as they may subsequently be amended as the result of
changes in DTC's operating procedures, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof.
Unless otherwise defined herein, terms defined in the Indenture or the
Securities shall be used herein as therein defined.
PART I:
ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for eligibility
in the book-entry system maintained by DTC, Chase will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company and Chase to DTC, dated as of the date hereof (the "Letter of
Representations"), and a Medium-Term Note Certificate Agreement between Chase
and DTC, dated as of March 10, 1989, and its obligations as a participant in
DTC, (including DTC's Same-Day Funds Settlement System ("SDFS")).
<TABLE>
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ISSUANCE: On any date of settlement (as defined under "Settlement" below)
for one or more Book-Entry Notes, the Company will issue a single
global security in fully registered form without coupons (a
"Global Security") representing up to U.S.$200,000,000 principal
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C>
amount of all such Notes that have the same Maturity Date,
Interest Payment Period and Dates, Original Issue Date, next
extension, redemption, prepayment or original issue discount
provisions and, in the case of Fixed Rate Notes, Interest Rate
or, in the case of Floating Rate Notes, Initial Interest Rate,
Base Rate, Index Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), Minimum Interest
Rate (if any) and Maximum Interest Rate (if any) and, in each
case, any other relevant terms (collectively "Terms"). Each
Global Security will be dated and issued as of the date of its
authentication by the Trustee. Each Global Security will bear an
"Interest Accrual Date," which will be (i) with respect to an
original Global Security (or any portion thereof), its original
issuance date and (ii) with respect to any Global Security (or
any portion thereof) issued subsequently upon exchange of a
Global Security, or in lieu of a destroyed, lost or stolen Global
Security, the most recent Interest Payment Date to which interest
has been paid or duly provided for on the predecessor Global
Security or Securities (or if no such payment or provision has
been made, the original issuance date of the predecessor Global
Security), regardless of the date of authentication of such
subsequently issued Global Security. Book-Entry Notes currently
may only be denominated and payable in U.S. dollars. No Global
Security will represent any Certificated Note.
IDENTIFICATION NUMBERS: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau") for
the reservation of a series of CUSIP numbers (including tranche
numbers), each of which series consists of approximately 900
CUSIP numbers and relates to Global Securities representing the
Book-Entry Notes. The Company has obtained from the CUSIP Service
Bureau a written list of each series of reserved CUSIP numbers
and has delivered to Chase and DTC the written list of 900 CUSIP
numbers of each such series. The Company will assign CUSIP
numbers to Global Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP Numbers that the Company has assigned
to Global Securities. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such additional
CUSIP numbers to Chase and DTC.
REGISTRATION: Each Global Security will be registered in the name of Cede &
Co., as nominee for DTC, on the register maintained under the
Indenture. The beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect to such
Note, the "Participants") to act as agent or agents for such
owner in connection with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with
respect to such beneficial owner in such Note in the account of
such Participants. The ownership interest of such beneficial
owner in such Note will be recorded through the records of such
Participants or through the separate records of such Participants
and one or more indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accompanied by book
entries made by DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC) acting on behalf
of beneficial transferors and transferees of such Note.
</TABLE>
B-2
<PAGE>
<TABLE>
<S> <C>
EXCHANGES: Chase may deliver to DTC and the CUSIP Service Bureau at any time
a written notice of consolidation specifying: (i) the CUSIP
numbers of two or more Outstanding Global Securities that
represent Book-Entry Notes having the same terms and for which
interest has been paid to the same date; (ii) a date, occurring
at least thirty days after such written notice is delivered and
at least thirty days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security; and (iii) a
new CUSIP number which has been assigned by the Company to such
replacement Global Security. Upon receipt of such a notice, DTC
will send to its Participants and to Chase a written
reorganization notice to the effect that such exchange will occur
on such date. Prior to the specified exchange date Chase will
deliver to the CUSIP Service Bureau a written notice setting
forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On the
specified exchange date, Chase will exchange such Global
Securities for a single Global Security bearing the new CUSIP
number and a new Interest Accrual Date, and the CUSIP numbers of
the exchanged Global Securities will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed U.S.$200,000,000 in aggregate
principal amount, one Global Security will be authenticated and
issued to represent each U.S.$200,000,000 principal amount of the
exchanged Global Security and an additional Global Security will
be authenticated and issued to represent any remaining principal
amount of such Global Securities (see "Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a date more than nine months
after the settlement date for such Note.
NOTICE OF REDEMPTION
DATES: Chase will give notice to DTC prior to each Redemption Date (as
specified in the Note), if any, at the time and in the manner set
forth in the Letter of Representations.
DENOMINATIONS: Book-Entry Notes will be issued in principal amounts of
U.S.$100,000 or any amount in excess thereof that is an integral
multiple of U.S.$1,000. Global Securities will be denominated in
principal amounts not in excess of U.S.$200,000,000. If one or
more Book-Entry Notes having an aggregate principal amount in
excess of U.S.$200,000,000 would, but for the preceding sentence,
be represented by a single Global Security, then one Global
Security will be issued to represent each U.S.$200,000,000
principal amount of such Book-Entry Note or Notes and an
additional Global Security will be issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities representing such
Book-Entry Note or Notes shall be assigned the same CUSIP number.
INTEREST: GENERAL. Interest on each Book-Entry Note will accrue from the
Interest Accrual Date of the Global Security representing such
Note. Each payment of interest on a Book-Entry Note will include
interest accrued to but excluding the Interest Payment Date or
the Maturity Date or upon earlier redemption or repayment;
provided that in the case of Floating Rate Notes that reset daily
or weekly, interest payments will include interest accrued to,
</TABLE>
B-3
<PAGE>
<TABLE>
<S> <C>
but excluding, the Record Date immediately preceding the Interest
Payment Date, except that at maturity or earlier redemption or
repayment, the interest payable will include interest accrued to,
but excluding, the maturity date or the date of redemption or
repayment, as the case may be. Interest payable at the maturity
or upon redemption or repayment of a Book-Entry Note will be
payable to the person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use the information
received in the pending deposit message described under
Settlement Procedures "C" below in order to include the amount of
any interest payable and certain other information regarding the
related Global Security in the appropriate weekly bond report
published by Standard & Poor's Corporation.
RECORD DATES. The Record Date with respect to any Interest
Payment Date shall be the date fifteen calendar days immediately
preceding such Interest Payment Date.
FIXED RATE BOOK-ENTRY NOTES. Interest payments on Fixed Rate
Book-Entry Notes will be made semiannually and at maturity
PROVIDED, HOWEVER, that in the case of a Fixed Rate Book-Entry
Note issued between a Record Date and an Interest Payment Date,
the first interest payment will be made on the Interest Payment
Date following the next succeeding Record Date.
FLOATING RATE BOOK-ENTRY NOTES. Interest payments will be made on
Floating Rate Book-Entry Notes monthly, quarterly, semi-annually
or annually. Unless otherwise agreed upon, interest will be
payable, in the case of Floating Rate Book-Entry Notes with a
daily, weekly or monthly Interest Reset Date, on the third
Wednesday of each month; in the case of Notes with a quarterly
Interest Reset Date, on the third Wednesday of January, April,
July and October of each year; in the case of Notes with a semi-
annual Interest Reset Date, on the third Wednesday of the two
months specified in the applicable Pricing Supplement; and in the
case of Notes with an annual Interest Reset Date, on the third
Wednesday of the month specified in the applicable Pricing
Supplement; PROVIDED HOWEVER, that if an Interest Payment Date
for Floating Rate Book-Entry Notes would otherwise be a day that
is not a Business Day with respect to such Floating Rate
Book-Entry Notes, such Interest Payment Date will be the next
succeeding Business Day with respect to such Floating Rate
Book-Entry Notes, except that in the case of LIBOR Note if such
Business Day is in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business
Day; and PROVIDED, FURTHER, that in the case of a Floating Rate
Book-Entry Note issued between a Record Date and an Interest
Payment Date, the first interest payment will be made on the
Interest Payment Date following the next succeeding Record Date.
NOTICE OF INTEREST PAYMENT AND RECORD DATES. On the first
Business Day of January, April, July and October of each year,
Chase will deliver to the Company and DTC a written list of
Record Dates and Interest Payment Dates that will occur with
respect to Book-Entry Notes during the six-month period beginning
on such first Business Day.
CALCULATION OF INTEREST: FIXED RATE BOOK-ENTRY NOTES. Interest on Fixed Rate Book-Entry
Notes (including interest for practical periods) will be
calculated on the basis of a 360-day year of twelve thirty-day
months.
</TABLE>
B-4
<PAGE>
<TABLE>
<S> <C>
FLOATING RATE BOOK-ENTRY NOTES. Interest rates on Floating Rate
Book-Entry Notes will be determined as set forth in the form of
Notes. Interest on Floating Rate Book-Entry Notes will be
calculated on the basis of actual days elapsed and a year of 360
days except that in the case of Treasury Rate Notes, interest
will be calculated on the basis of the actual number of days in
the year.
PAYMENTS OF PRINCIPAL AND
INTEREST: PAYMENTS OF INTEREST. Promptly after each Record Date Chase will
deliver to the Company and DTC a written notice specifying by
CUSIP number the amount of interest to be paid on each Global
Security on the following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity) and the total of
such amounts. DTC will confirm the amount payable on each such
Global Security on such Interest Payment Date by reference to the
daily bond reports published by Standard & Poor's Corporation.
The Company will pay to Chase, as Paying Agent, the total amount
of interest due on such Interest Payment Date (other than at
maturity), and Chase will pay such amount to DTC at the times and
in the manner set forth below under "Manner of Payment." If any
Interest Payment Date for a Fixed Rate Book-Entry Note is not a
Business Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall accrue on such
payment for the period from and after such Interest Payment Date.
PAYMENT AT MATURITY OR UPON REDEMPTION. On or about the first
Business Day of each month, Chase will deliver to the Company and
DTC a written list of principal and interest to be paid on each
Global Security maturing either at maturity or on a redemption or
repayment date in the following month. The Company and DTC will
confirm the amounts of such principal and interest payments with
respect to each such Global Security on or about the fifth
Business Day preceding the Maturity Date or redemption or
repayment date of such Global Security. The Company will pay to
Chase as the Paying Agent, the principal amount of such Global
Security, together with interest due at such Maturity Date or
redemption or repayment date. Chase will pay such amounts to DTC
at the times and in the manner set forth below under "Manner of
Payment." If any Maturity Date or redemption or repayment date of
a Global Security representing Book-Entry Notes is not a Business
Day, the payment due on such day shall be made on the next
succeeding Business Day and, in the case of Fixed Rate Notes, no
interest shall accrue on such payment for the period from and
after such Maturity Date or redemption or repayment date.
Promptly after payment to DTC of the principal and interest due
on the Maturity Date or redemption or repayment date of such
Global Security, Chase will cancel such Global Security in
accordance with the terms of the Indenture and deliver it to the
Company with a certificate of cancellation.
MANNER OF PAYMENT. The total amount of any principal and interest
due on Global Securities on any Interest Payment Date or at
maturity or upon redemption or repayment shall be paid by the
Company to Chase in funds available for immediate use by Chase
not later than 9:30 A.M. (New York City time) on such date. The
Company will make such payment on such Global Securities by
instructing Chase to withdraw funds from an account maintained by
the Company at Chase. The Company will confirm such
</TABLE>
B-5
<PAGE>
<TABLE>
<S> <C>
instructions in writing to Chase. At or after 11:00 A.M. (New
York City time) on each Maturity Date or redemption or repayment
date or as soon as possible thereafter, Chase will pay by
separate wire transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified by DTC, in
funds available for immediate use by DTC or by other procedures
previously established between DTC and Chase, each payment of
interest or principal (together with interest thereon) due on
Global Securities on any Maturity Date or redemption or repayment
date. On each Interest Payment Date, interest payments shall be
made by wire transfer of immediately available funds. Thereafter
on each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants in
whose names the Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system maintained by
DTC. Neither the Company nor Chase shall have any responsibility
or liability for the payment by DTC to such Participants of the
principal of and interest on the Book-Entry Notes.
WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other person
responsible for forwarding payments directly to the beneficial
owner of such Note.
PREPARATION OF PRICING
SUPPLEMENT: If any order to purchase a Book-Entry Note is accepted by or on
behalf of the Company, the Company will prepare a pricing
supplement (a "Pricing Supplement") reflecting the terms of such
Note and will arrange to file 10 copies of such Pricing
Supplement with the Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act, will deliver the number
of copies of such Pricing Supplement to the Agent as the Agent
shall request by the close of business on the following Business
Day. The Agent will cause such Pricing Supplement to be delivered
to the purchaser of the Note.
In each instance that a Pricing Supplement is prepared, the Agent
will affix the Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements, and the Prospectuses to which
they are attached (other than those retained for files) will be
destroyed.
</TABLE>
<TABLE>
<S> <C> <C> <C>
SETTLEMENT: The receipt by the Company of immediately available funds in payment for a
Book-Entry Note and the authentication and issuance of the Global Security
representing such Note shall constitute "settlement" with respect to such Note.
All orders accepted by the Company will be settled on the fifth Business Day
pursuant to the timetable for settlement set forth below unless the Company and
the purchaser agree to settlement on another day which shall be no earlier than
the next Business Day.
</TABLE>
B-6
<PAGE>
<TABLE>
<S> <C> <C> <C>
SETTLEMENT PROCEDURES: Settlement Procedures with regard to each Book-Entry Note sold by the Company to
or through the Agent, (except pursuant to a Terms Agreement, as defined in the
Distribution Agreement), shall be as follows:
A. The Agent will advise the Company by telephone that such Note is a
Book-Entry Note and of the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the interest
rate or in the case of a Floating Rate Book-Entry Note,
the Initial Interest Rate (if known at such time), Base
Rate, Index Maturity, Interest Reset Period, Interest
Reset Date, Interest Reset Dates, Interest Payment Period,
Interest Determination Date, Spread or Spread Multiplier
(if any), Minimum Interest Rate (if any) and Maximum
Interest Rate (if any).
4. Interest Payment Dates.
5. Redemption or repayment provisions, if any.
6. Settlement date.
7. Price.
8. Agent's commission, if any, determined as provided in the
Distribution Agreement.
9. Whether the Note is an OID Note, and if it is an OID Note,
the total amount of OID, the yield to maturity as the
initial accrual period OID.
10. Any other applicable terms.
B. The Company will advise Chase by telephone or electronic transmission
(confirmed in writing at any time on the same date) of the
information set forth in Settlement Procedure "A" above. The Company
will then assign a CUSIP number to the Global Security representing
such Note and will notify Chase and the Agent of such CUSIP number by
telephone as soon as practicable.
C. Chase will enter a pending deposit message through DTC's Participant
Terminal System, providing the following settlement information to
DTC, the Agent and Standard & Poor's Corporation:
1. The information set forth in Settlement Procedure "A".
2. The initial Interest Payment Date for such Note, the
number of days by which such date succeeds the related DTC
Record Date (which in the case of Floating Rate Notes
which reset daily or weekly, shall be the date five
calendar days immediately preceding the applicable
Interest Payment Date and, in the case of all other Notes,
shall be the Record Date as defined in the Note) and
amount of interest payable on such initial Interest
Payment Date.
3. The CUSIP number of the Global Security representing such
Note.
4. Whether such Global Security will represent any other
Book-Entry Note (to the extent known at such time).
D. Chase will complete and authenticate the Global Security representing
such Note.
E. DTC will credit such Note to Chase's participant account at DTC.
</TABLE>
B-7
<PAGE>
<TABLE>
<S> <C> <C> <C>
F. Chase will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Note to Chase's
participant account and credit such Note to the Agent's participant
account and (ii) debit the Agent's settlement account and credit
Chase's settlement account for an amount equal to the price of such
Note less the Agent's commission, if any. The entry of such a deliver
order shall constitute a representation and warranty by Chase to DTC
that (a) the Global Security representing such Book-Entry Note has
been issued and authenticated and (b) Chase is holding such Global
Security pursuant to the Medium-Term Note Certificate Agreement
between Chase and DTC.
G. Unless the Agent purchased such Note as principal, the Agent will
enter an SDFS deliver order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the Agent's participant
account and credit such Note to the participant accounts of the
Participants with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement
account of the Agent for an amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance
with SDFS operating procedures in effect on the settlement date.
I. Chase will credit to the account of the Company maintained at Chase
New York, New York, in funds available for immediate use in the
amount transferred to Chase in accordance with Settlement Procedure
"F".
J. Unless the Agent purchased such Note as principal, the Agent will
confirm the purchase of such Note to the purchaser and the Company
either by transmitting to the Participants and the Company with
respect to such Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written confirmation to
such purchaser.
K. Monthly, Chase will send to the Company a statement setting forth the
principal amount of Notes Outstanding as of that date under the
Indenture and setting forth a brief description of any sales of which
the Company has advised Chase but which have not yet been settled.
</TABLE>
B-8
<PAGE>
<TABLE>
<S> <C> <C> <C>
SETTLEMENT PROCEDURES
TIMETABLE: For sales by the Company of Book-Entry Notes to or through the Agent (except
pursuant to a Terms Agreement) for settlement on the first Business Day after
the sale date, Settlement Procedures "A" through "J" set forth above shall be
completed as soon as possible but no later than the respective times (New York
City time) set forth below:
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
- - ---------- --------------------------------------
<C> <S>
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
</TABLE>
<TABLE>
<S> <C> <C> <C>
If a sale is to be settled more than one Business Day after the sale date,
Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable
but not later than 11:00 A.M., 12 Noon and 2:00 P.M., respectively, on the first
Business Day after the sale date. If the Initial Interest Rate for a Floating
Rate Book-Entry Note has not been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed
as soon as such rate has been determined but no later than 12 Noon and 2:00
P.M., respectively, on the second Business Day before the settlement date.
Settlement Procedure "H" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date. If settlement of a
Book-Entry Note is rescheduled or cancelled, Chase, after receiving notice from
the Company or the Agent, will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by no later than 2:00
P.M. on the Business Day immediately preceding the scheduled settlement date.
FAILURE TO SETTLE: If Chase fails to enter an SDFS deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", Chase may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable a withdrawal message
instructing DTC to debit such Note to Chase's participant account, provided that
Chase's participant account contains a principal amount of the Global Security
representing such Security that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect to all the Book-Entry
Notes represented by a Global Security, Chase will mark such Global Security
"cancelled," make appropriate entries in Chase records and send such cancelled
Global Security to the Company. The CUSIP number assigned to such Global
Security shall, in accordance with CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the Book-Entry Notes represented by a
Global Security, Chase will exchange such Global Security
</TABLE>
B-9
<PAGE>
<TABLE>
<S> <C> <C> <C>
for two Global Securities, one of which shall represent such Book-Entry Note or
Notes and shall be cancelled immediately after issuance and the other of which
shall represent the remaining Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent may enter SDFS deliver
orders through DTC's Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "F" and "G", respectively. Thereafter, Chase
will deliver the withdrawal message and take the related actions described in
the preceding paragraph. Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take any actions in accordance
with its SDFS operating procedures then in effect.
In the event of a failure to settle with respect to one or more, but not all, of
the Book-Entry Notes to have been represented by a Global Security, Chase will
provide, in accordance with Settlement Procedures "D" and "F", for the
authentication and issuance of a Global Security representing the Book-Entry
Notes to be represented by such Global Security and will make appropriate
entries in its records.
</TABLE>
PART II:
ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Chase will serve as Registrar in connection with the Certificated Notes.
<TABLE>
<S> <C>
ISSUANCE: Each Certificated Note will be dated and issued as of the date of
its authentication by Chase. Each Certificated Note will bear an
Original Issue Date, which will be (i) with respect to an
original Certificated Note (or any portion thereof), its original
issuance date (which will be the settlement date) and (ii) with
respect to any Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a Certificated Note or
in lieu of a destroyed, lost or stolen Certificated Note, the
original issuance date of the predecessor Certificated Note,
regardless of the date of authentication of such subsequently
issued Certificated Note.
REGISTRATION: Certificated Notes will be issued only in fully registered form
without coupons.
TRANSFERS AND EXCHANGES: A Certificated Note may be presented for transfer or exchange at
the corporate trust office of Chase. Certificated Notes will be
exchangeable for other Certificated Notes having identical terms
but different denominations without service charge. Certificated
Notes will not be exchangeable for Book-Entry Notes.
MATURITIES: Each Certificated Note will mature on a date more than nine
months from the settlement date for such Note.
</TABLE>
B-10
<PAGE>
<TABLE>
<S> <C>
CURRENCY: The currency denomination with respect to any Certificated Note
and the payment of interest and the repayment of principal with
respect to any such Certificated Note shall be as set forth
therein and in the applicable Pricing Supplement.
DENOMINATIONS: The authorized denomination of any Certificated Note denominated
in U.S. dollars will be U.S. $100,000 or any larger amount that
is an integral multiple of U.S. $1,000. Unless otherwise
specified in the applicable Pricing Supplement, Notes denominated
in a Specified currency other than U.S. dollars will be issued in
denominations of the equivalent of U.S. $100,000 (rounded down to
an integral multiple of 1,000 units of such Specified Currency)
or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined pursuant to
the applicable Pricing Supplement.
INTEREST: GENERAL. Interest on each Certificated Note will accrue from the
Original Issue Date of such Note for the first interest period
and from the most recent date to which interest has been paid for
all subsequent interest periods. Each payment of interest on a
Certificated Note will include interest accrued to but excluding
the Interest Payment Date; provided that in the case of Floating
Rate Notes which reset daily or weekly, interest payments will
include the Record Date immediately preceding the Interest
Payment Date, except that at maturity or earlier redemption or
repayment, the interest payable will include interest accrued to,
but excluding the Maturity Date or the date or redemption or
repayment, as the case may be.
FIXED RATE CERTIFICATED NOTES. Unless otherwise specified
pursuant to Settlement Procedure "A" below, interest payments on
Fixed Rate Certificated Notes will be made semiannually and at
maturity; PROVIDED, HOWEVER, that in the case of Certificated
Fixed Rate Notes issued between a Record Date and an Interest
Payment Date, the first interest payment will be made on the
Interest Payment Date following the next succeeding Record Date.
FLOATING RATE CERTIFICATED NOTES. Interest payments will be made
on Floating Rate Certificated Notes monthly, quarterly,
semi-annually or annually. Interest will be payable, in the case
of Floating Rate Certificated Notes with a daily, weekly or
monthly Interest Reset Date, on the third Wednesday of each
month; in the case of Notes with a quarterly Interest Reset Date,
on the third Wednesday of January, April, July and October of
each year; in the case of the Notes with a semi-annual Interest
Reset Date, on the third Wednesday of the two months specified in
the applicable Pricing Supplement; and in the case of Notes with
an annual Interest Reset Date, on the third Wednesday of the
month specified in the applicable Pricing Supplement; PROVIDED,
HOWEVER, that if an Interest Payment Date for Floating Rate
Certificated Notes would otherwise be a day that is not a
Business Day with respect to such Floating Rate Certificated
Notes, such Interest Payment Date will be the next succeeding
Business Day with respect to such Floating Rate Certificated
Notes, except that in the case of a LIBOR Note is such Business
Day is in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business Day; and
PROVIDED, FURTHER, that in the case of a Floating Rate
Certificated Note issued between a Record Date and an Interest
Payment
</TABLE>
B-11
<PAGE>
<TABLE>
<S> <C>
Date, the first interest payment will be made on the Interest
Payment Date following the next succeeding Record Date.
</TABLE>
<TABLE>
<S> <C> <C> <C>
CALCULATION OF INTEREST: FIXED RATE CERTIFICATED NOTES. Interest on Fixed Rate Certificated Notes
(including interest for partial periods) will be calculated on the basis of a
360-day year of twelve thirty-day months.
FLOATING RATE CERTIFICATED NOTES. Interest rates on Floating Rate Certificated
Notes will be determined as set forth in the form of Notes. Interest on
Floating Rate Certificated Notes will be calculated on the basis of the actual
days elapsed and a year of 360 days except that in the case of Treasury Rate
Notes, interest will be calculated on the basis of the actual number of days in
the year.
PAYMENTS OF PRINCIPAL
AND INTEREST: Chase will pay the principal amount of each Certificated Note at maturity or
upon redemption or repayment upon presentation and surrender of such Note to
Chase. Such payment, together with payment of interest due at maturity or upon
redemption or repayment of such Note, will be made in funds available for
immediate use by Chase and in turn by the holder of such Note. Certificated
Notes presented to Chase at maturity or upon redemption or repayment for
payment will be cancelled by Chase and delivered to the Company with a
certificate of cancellation. All interest payments on a Certificated Note
(other than interest due at maturity or upon redemption or repayment) will be
made by check drawn on Chase (or another person appointed by the Company) and
mailed by Chase to the person entitled thereto as provided in such Note and the
Indenture; PROVIDED, HOWEVER, that the holder of $10,000,000 (or the equivalent
in a specified currency other than U.S. dollars) or more of Notes having the
same Interest Payment Date and other terms will be entitled to receive payment
by wire transfer of immediately available funds but only if appropriate payment
instructions have been received in writing by the Paying Agent not less than
fifteen days prior to the applicable Interest Payment Date. Following each
Record Date, Chase will furnish the Company with a list of interest payments to
be made on the following Interest Payment Date for each Certificated Note and
in total for all Certificated Notes. Interest at maturity or upon redemption or
repayment will be payable to the person to whom the payment of principal is
payable. Chase will provide monthly to the Company lists of principal and
interest, to the extent ascertainable, to be paid on Certificated Notes
maturing or to be redeemed or repaid in the next month. Chase will be
responsible for withholding taxes on interest paid on Certificated Notes as
required by applicable law.
If any Interest Payment Date or the Maturity Date or redemption or repayment
date of a Fixed-Rate Certificated Note is not a Business Day, the payment due
on such day shall be made on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and after such Interest
Payment Date, Maturity Date or redemption date or repayment, as the case may
be. If any Interest Payment Date or the Maturity Date or redemption or
repayment date for any Certificated Floating Rate Note would fall on a day that
is not a Business Day with respect to such Note, such Interest Payment Date,
Maturity Date or redemption or
</TABLE>
B-12
<PAGE>
<TABLE>
<S> <C> <C> <C>
repayment date will be the following day that is a Business Day with respect to
such Note, except that, in the case of a Certificated LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding day that is a Business Day with respect
to such Certificated LIBOR Note.
PREPARATION OF PRICING
SUPPLEMENT: If any order to purchase a Certificated Note is accepted by or on behalf of the
Company, the Company will prepare a pricing supplement (a "Pricing Supplement")
reflecting the terms of such Note and will arrange to file 10 copies of such
Pricing Supplement with the Commission in accordance with the applicable
paragraph of Rule 424 (b) under the Act, will deliver the number of copies of
such Pricing Supplement to the Agent as the Agent shall request by the close of
business on the following Business Day. The Agent will cause such Pricing
Supplement to be delivered to the purchaser of the Note.
In each instance that a Pricing Supplement is prepared, the Agent will affix
the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are attached (other than those
retained for files), will be destroyed.
SETTLEMENT: The receipt by the Company of immediately available funds in exchange for an
authenticated Certificated Note delivered to the Agent and the Agent's delivery
of such Note against receipt of immediately available funds shall constitute
"settlement" with respect to such Note. All orders accepted by the Company will
be settled on or before the fifth Business Day next succeeding the date of
acceptance pursuant to the timetable for settlement set forth below, unless the
Company and the purchaser agree to settlement on another date.
SETTLEMENT PROCEDURES: Settlement Procedures with regard to each Certificated Note sold by the Company
to or through the Agent (except pursuant to a Terms Agreement) shall be as
follows:
A. The Agent will advise the Company by telephone that such Note is a
Certificated Note and of the following settlement information:
1. Name in which such Note is to be registered ("Registered
Owner").
2. Address of the Registered Owner and address for payment
of principal and interest.
3. Taxpayer identification number of the Registered Owner
(if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated Note, the
interest rate or in the case of a Floating Rate
Certificated Note, the Initial Interest Rate (if known at
such time), Base Rate, Index Maturity,
</TABLE>
B-13
<PAGE>
<TABLE>
<S> <C> <C> <C>
Interest Reset Period, Initial Interest Reset Date,
Interest Reset Dates, Interest Payment Period, Interest
Determination Date, Spread or Spread Multiplier (if any),
Minimum Interest Rate (if any) and Maximum Interest Rate
(if any).
7. Interest Payment Dates.
8. Redemption or Repayment provisions, if any.
9. Settlement date.
10. Price
11. Agent's commission, if any, determined as provided in the
Distribution Agreement between the Company and the Agent.
12. Whether the Note is an OID Note, and if it is an OID
Note, the total amount of OID, the yield to maturity and
the initial accrual period OID.
13. Any other applicable terms.
B. The Company will advise Chase by telephone or electronic
transmission (confirmed in writing at any time on the sale date) of
the information set forth in Settlement Procedure "A" above.
C. The Company will have delivered to Chase a pre-printed four-ply
packet for such Note, which packet will contain the following docu-
ments in forms that have been approved by the Company, the Agent and
the Trustee:
1. Note with customer confirmation.
2. Stub One--For Chase.
3. Stub Two--For Agent.
4. Stub Three--For the Company.
D. Chase will complete such Note and authenticate such Note and deliver
it (with the confirmation) and Stubs One and Two to the Agent, and
the Agent will acknowledge receipt of the Note by stamping or
otherwise marking Stub One and returning it to Chase. Such delivery
will be made only against such acknowledgment of receipt and
evidence that instructions have been given by the Agent for payment
to the account of the Company at Chase, New York, New York, in funds
available for immediate use, of an amount equal to the price of such
Note less the Agent's commission, if any. In the event that the
instructions given by the Agent for payment to the account of the
Company are revoked, the Company will as promptly as possible wire
transfer to the account of the Agent an amount of immediately
available funds equal to the amount of such payment made.
E. Unless the Agent purchased such Note as principal, the Agent will
deliver such Note (with confirmation) to the customer against
payment
</TABLE>
B-14
<PAGE>
<TABLE>
<S> <C> <C> <C>
in immediately payable funds. The Agent will obtain the acknowledge-
ment of receipt of such Note by retaining Stub Two.
F. Chase will send Stub Three to the Company by first-class mail.
Periodically, Chase will also send to the Company a statement
setting forth the principal amount of the Notes Outstanding as of
that date under Indenture and setting forth a brief description of
any sales of which the Company has advised Chase but which have not
yet been settled.
SETTLEMENT PROCEDURES
TIMETABLE: For sales by the Company of Certificated Notes to or through the Agent (except
pursuant to a Terms Agreement), Settlement Procedures "A" through "F" set forth
above shall be completed on or before the respective times (New York City time)
set forth below:
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
- - ---------- ----------------------------------------------
<C> <S>
A 2:00 P.M. on day before settlement date
B 3:00 P.M. on day before settlement date
C-D 2:15 P.M. on settlement day
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
</TABLE>
<TABLE>
<S> <C> <C> <C>
FAILURE TO SETTLE: If a purchaser fails to accept delivery of and make payment for any
Certificated Notes, the Agent will notify the Company and Chase by telephone
and return such note to Chase. Upon receipt of such notice, the Company will
immediately wire transfer to the account of the Agent an amount equal to the
amount previously credited thereto in respect of such Note. Such wire transfer
will be made on the settlement date, if possible, and in any event not later
than the Business Day following the settlement date. If the failure shall have
occurred for any reason other than a default by the Agent in the performance of
its obligations hereunder and under the Distribution Agreement with the
Company, then the Company will reimburse the Agent or Chase, as appropriate, on
an equitable basis for its loss of the use of the funds during the period when
they were credited to the account of the company. Immediately upon receipt of
the Certificated Note in respect of which such failure occurred, Chase will
mark such Note "cancelled," make appropriate entries in Chase records and send
such Note to the Company.
Nothing herein will be deemed to require the Paying Agent to risk or expend its
own funds in connection with any payment to the Company, the Agents, the
Depository or any Securityholder, it being understood by all parties that
payments made by the Paying Agent to any party will be paid only to the extent
that funds are provided to the Paying Agent, as the case may be, for such
purpose.
</TABLE>
B-15
<PAGE>
EXHIBIT C
(FORM OF FACE OF SERIES 1998 MEDIUM TERM NOTE)
[REGISTERED NOTE]
[IF THIS IS A BOOK-ENTRY NOTE: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55
WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENTS IS MADE TO CEDE
& CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
TEXACO CAPITAL INC.
Series 1998 Medium-Term Note
Guaranteed by Texaco Inc.
<TABLE>
<S> <C>
Registered Registered
No. [$]
</TABLE>
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE DESIGNATED METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
FLOATING RATE NOTE / /
% FIXED RATE NOTE / /
<TABLE>
<S> <C> <C>
No. DSE- Principal Amount:
CUSIP Maturity Date:
Original Issue Date: Extendible:
Interest Accrual Date: Final Maturity Date:
Issue Price: Option to Elect Payment in U.S. Dollars
Record Date:
REDEMPTION REDEMPTION
DATE(S) PRICE(S) / / Yes / / No
- - -------------------- --------------------
Authorized Denominations (Only applicable if
Specified Currency is other than U.S. Dollars):
Interest Payment Period:
REPAYMENT REDEMPTION
DATE(S) PRICE(S) Interest Payment Dates:
- - -------------------- --------------------
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period of OID:
Redemption:
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C> <C>
Interest Reset Period: Repayment:
Interest Reset Dates: Commodity Indexed Note:
ONLY APPLICABLE IF THIS IS A FLOATING RATE NOTE:
Initial Interest Rate: Spread (plus or minus):
Index Maturity: Spread Multiplier:
Base Rate: Maximum Interest Rate:
Interest Determination Date: Minimum Interest Rate:
Other Terms:
ONLY APPLICABLE IF THIS IS A CURRENCY INDEXED NOTE:
</TABLE>
<TABLE>
<S> <C>
Denominated Currency: Face Amount:
Indexed Currency: Base Exchange Rate:
</TABLE>
TEXACO CAPITAL INC. (the "Company") promises to pay to or registered
assigns, the principal sum of ("Specified Currency") on the "Maturity
Date," as set forth above, and to pay interest thereon as described on the
reverse hereof.
The principal of (and premium, if any) and interest on this Note are payable
by the Company in such coin or currency specified above as at the time of
payment shall be legal tender for the payment of public and private debts in the
country in which such currency is issued (the "Specified Currency"). If the
Specified Currency is other than U.S. Dollars the Holder hereof may, if so
indicated above, elect to receive all payments in respect hereof in U.S. Dollars
by delivery of a written request to the Paying Agent located in The City of New
York (initially, The Chase Manhattan Bank) not later than fifteen calendar days
prior to the applicable payment date. Such election will remain in effect until
revoked by written notice to such Paying Agent received not later than fifteen
calendar days prior to the applicable payment date.
REFERENCE IS HEREBY MADE TO THE FUTURE PROVISIONS OF THIS NOTE SET FORTH 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 manually executed
by or on behalf of the Trustee under the Indenture, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
<TABLE>
<S> <C>
Dated:
Authenticated:
THE CHASE MANHATTAN BANK
as Trustee TEXACO CAPITAL INC.
By (SEAL) By
AUTHORIZED OFFICER VICE PRESIDENT
By
VICE PRESIDENT
</TABLE>
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(FORM OF REVERSE OF NOTE)
TEXACO CAPITAL INC.
Series 1998 Medium-Term Note
Guaranteed by Texaco Inc.
1. INTEREST.
A. If this is a Fixed Rate Note, the Company promises to pay interest on the
principal amount at the rate per annum shown on the face hereof until the
principal amount hereof is paid or duly made available for payment. Unless
otherwise provided on the face hereof, the Company will pay interest
semiannually (each an "Interest Payment Date"), (provided, however, that in the
case of a Fixed Rate Note issued between a Record Date and an Interest Payment
Date, the first interest payment will be made on the Interest Payment Date
following the next succeeding Record Date), commencing with the Interest Payment
Date immediately following the Original Issue Date shown on the face hereof, and
at Maturity. Interest will accrue from and including the most recent Interest
Payment Date or, if no interest has been paid or duly provided for, from and
including the Original Issue Date on the face hereof, to, but excluding the
Interest Payment Date. The amount of such interest payable on any Interest
Payment Date shall be computed on the basis of a year of twelve 30-day months.
B. If this is a Floating Rate Note, the Company promises to pay interest on
the principal amount at the rate per annum equal to the Initial Interest Rate
shown on the face hereof until the first Interest Reset Date shown on the face
hereof following the Original Issue Date specified on the face hereof and
thereafter at a rate determined in accordance with the provisions below under
the heading "Determination of CD Rate", "Determination of Commercial Paper
Rate", "Determination of Federal Funds Rate", "Determination of LIBOR" or
"Determination of Treasury Rate", "Determination of Prime Rate", "Determination
of CMT Rate", or "Determination of Eleventh District Cost of Funds Rate",
depending upon whether the Base Rate specified above is CD Rate, Commercial
Paper Rate, Federal Funds Rate, LIBOR, Treasury Rate, Prime Rate, CMT Rate or
Eleventh District Cost of Funds Rate, respectively, until the principal hereof
is paid or duly made available for payment. The Company will pay interest
monthly, quarterly, semi-annually or annually as specified on the face hereof
under "Interest Payment Period", commencing with the first Interest Payment Date
specified on the face hereof next succeeding the Original Issue Date, and at
Maturity. Unless otherwise provided on the face hereof, the dates on which
interest will be payable (each an "Interest Payment Date") will be, in the case
of Notes with a daily, weekly or monthly Interest Reset Date, the third
Wednesday of each month; in the case of Notes with a quarterly Interest Reset
Date, the third Wednesday of January, April, July and October; in the case of
Notes with a semi-annual Interest Reset Date, the third Wednesday of the two
months specified on the face hereof; and in the case of Notes with an annual
Interest Reset Date, the third Wednesday of the month specified on the face
hereof; provided, however, that if an Interest Payment Date would fall on a day
that is not a Business Day, such Interest Payment Date shall be the next
succeeding Business Day, except that in the case the Base Rate is LIBOR, if such
date falls in the next calendar month, such Interest Payment Date shall be the
immediately preceding Business Day; and provided further, that in the case of a
Floating Rate Note issued between a Record Date and an Interest Payment Date,
the first interest payment will be made on the Interest Payment Date following
the next succeeding Record Date.
The interest payable on a Floating Rate Note on each Interest Payment Date
will include accrued interest from and including the Original Issue Date or from
and including the last date in respect of which interest has been paid, as the
case may be, to but excluding such Interest Payment Date; provided, however,
that if the Interest Reset Period is daily or weekly, the interest payable on
each Interest Payment Date, other than at Maturity or earlier redemption or
repayment, will include accrued interest from and including the Original Issue
Date or from and including the last date in respect of which interest has been
paid, as the case may be, to, but excluding, the Record Date immediately
preceding such Interest Payment Date, and the interest payable at Maturity or
earlier redemption or repayment will include accrued interest from and including
the Original Issue Date or from and including the last date in respect of which
interest
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has been paid, as the case may be, to, but excluding, the date of Maturity, or
the day of redemption or repayment, as the case may be. Such accrued interest
will be calculated by multiplying the principal amount hereof by an accrued
interest factor. This accrued interest factor shall be computed by adding the
interest factors calculated for each day in the period for which accrued
interest is being calculated. The interest factor (expressed as a decimal) for
each such day shall be computed by dividing the interest rate applicable to such
day by 360 if the Base Rate is CD Rate, Commercial Paper Rate, Federal Funds
Rate or LIBOR, Prime Rate, CMT Rate or Eleventh District Cost of Funds Rate, as
indicated on the face hereof, or by the actual number of days in the year if the
Base Rate is Treasury Rate, as indicated on the face hereof. The interest rate
in effect on each day will be (a) if such day is an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to the
next preceding Interest Reset Date; provided, however, that (i) the interest
rate in effect from the Original Issue Date to the first Interest Reset Date
will be the Initial Interest Rate and (ii) the interest rate in effect for the
ten calendar days immediately prior to Maturity or redemption or repayment will
be that in effect on the tenth calendar day preceding such Maturity or
redemption or repayment and (iii) if any Floating Rate Note is issued between a
Record Date and the related Interest Payment Date, and such Note has daily or
weekly Interest Reset Dates, then notwithstanding the fact that an Interest
Reset Date may occur prior to such Interest Payment Date, the Initial Interest
Rate shall remain in effect through the first Interest Reset Date occurring on
or subsequent to such Interest Payment Date. Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, shown on the face hereof.
In addition, the interest rate hereon shall in no event be higher than the
maximum rate, if any, permitted by New York law. Commencing with the first
Interest Reset Date specified on the face hereof following the Original Issue
Date and thereafter upon each succeeding Interest Reset Date specified on the
face hereof, the rate at which interest on a Floating Rate Note is payable shall
be adjusted as specified on the face hereof under Interest Rate Period;
provided, however, that if any Interest Rate Date would otherwise be a day that
is not a Business Day, such Interest Reset Date shall be postponed to the next
day that is a Business Day, except that (i) if the Base Rate is LIBOR and such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day or (ii) if the Base Rate is
Treasury Rate and the Interest Reset Date falls on a date which is an auction
date, the Interest Reset Date shall be the next following Business Day.
The Interest Determination Date pertaining to an Interest Reset Date will
be, if the Base Rate is CD Rate, Commercial Paper Rate or Federal Funds Rate,
the second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date will be, if the Base
Rate is LIBOR, the second London Banking Day preceding such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date will be, if
the Base Rate is Treasury Rate, the day of the week in which such Interest Reset
Date falls on which Treasury bills (as defined below) of the Index Maturity
specified on the face hereof are auctioned. Treasury bills are normally
auctioned on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday. If an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date pertaining
to the Interest Reset Date occurring in the next succeeding week. If an auction
falls on a day that is not an Interest Reset Date, such Interest Reset Date will
be the next following Business Day.
Subject to applicable provisions of law and except as specified herein, on
each Interest Reset Date the rate of interest shall be the rate determined in
accordance with the provisions of the applicable heading below.
DETERMINATION OF CD RATE. If the Base Rate is the CD Rate, as indicated on
the face hereof, the interest rate shall equal (a) the rate on the Interest
Determination Date specified on the face hereof for negotiable certificates of
deposit having the Index Maturity specified on the face hereof as published by
the
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Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication of the Board of
Governors of the Federal Reserve System (the "H.15(519)"), under the heading
"CDs (Secondary Market)"; (b) if such rate is not so published by 9:00 A.M., New
York City time, on the Calculation Date (as defined below) pertaining to such
Interest Determination Date, then such rate as published by the Federal Reserve
Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" (the "Composite Quotations") under
the heading "Certificates of Deposit"; or (c) if neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, the
arithmetic mean as calculated by the Calculation Agent of the secondary market
offered rates as of 10:00 A.M., New York City time, on such Interest
Determination Date of three leading nonbank dealers in negotiable U.S. Dollar
certificates of deposit in The City of New York selected by the Company for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing (in the market for negotiable certificates of
deposit) with a remaining maturity closest to the Index Maturity (as specified
on the face hereof) in a denomination of $5,000,000, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that if such dealers are not quoting as
mentioned above, the interest rate in effect hereon until the Interest Reset
Date next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect hereon on such Interest
Determination Date.
DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is the Commercial
Paper Rate, as indicated on the face hereof, the interest rate shall equal (a)
the Money Market Yield (as defined herein) on the Interest Determination Date
specified on the face hereof of the rate for commercial paper having the Index
Maturity specified on the face hereof as the rate for such commercial paper
published in the H.15(519), under the heading "Commercial Paper Non-Financial";
(b) if such commercial paper rate is not so published by 9:00 A.M., New York
City time, on the Calculation Date (as defined below) pertaining to such
Interest Determination Date, then the Money Market Yield using the rate for
commercial paper of such Index Maturity as published for such Interest
Determination Date in the Composite Quotations under the heading "Commercial
Paper"; or (c) if neither of such rates is published by 3:00 P.M., New York City
time on such Calculation Date, the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 A.M., New York City time on such Interest
Determination Date, of three leading dealers of commercial paper in The City of
New York, selected by the Company, for commercial paper of the Index Maturity
specified on the face hereof placed for an industrial issuer whose bond rating
is "AA" or the equivalent, from a nationally recognized rating agency, in each
of the above cases adjusted by the addition or subtraction of the Spread; if
any, specified on the face hereof, or by multiplication by the Spread
Multiplier, if any, specified on the face hereof; provided, however, that if
such dealers are not quoting as mentioned above, the interest rate in effect
hereon until the Interest Reset Date next succeeding the Interest Reset Date to
which such Interest Determination Date relates shall be the rate in effect
hereon on such Interest Determination Date.
"Money Market Yield" shall be the yield calculated in accordance with the
following formula:
<TABLE>
<C> <C> <S>
D X 360
Money Market Yield = X 100
360 - (D X M)
</TABLE>
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the Federal Funds
Rate, as indicated on the face hereof, the interest rate shall equal (a) the
rate on the Interest Determination Date specified on the
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face hereof for Federal Funds as published in the H.15(519), under the heading
"Federal Funds (Effective); (b) if such rate is not so published by 9:00 A.M.,
New York City time, on the Calculation Date (as defined below) pertaining to
such Interest Determination Date, then the rate as published in the Composite
Quotations under the heading "Federal Funds/Effective Rate"; or (c) if neither
of such rates is published by 3:00 P.M., New York City time, on such Calculation
Date, the arithmetic mean (as calculated by the Calculation Agent) of the rates
for the last transaction in overnight Federal Funds arranged by three leading
brokers in The City of New York selected by the Company as of 11:00 A.M., New
York City time on such Interest Determination Date, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof, provided, however, that if such brokers are not quoting as
mentioned above, the interest rate in effect hereon until the Interest Reset
Date next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect hereon on such Interest
Determination Date.
DETERMINATION OF LIBOR. If the Base Rate indicated on the face hereof is
LIBOR and the LIBOR so specified is indexed to the offered rates for deposits in
U.S. dollars, LIBOR for each Interest Reset Date will be determined by the
Calculation Agent as follows:
(i) As of the Interest Determination Date, the Calculation Agent will
determine the arithmetic mean of the offered rates for deposits in U.S.
dollars for the period of the Index Maturity designated in the applicable
Pricing Supplement which appear on the Reuters Screen LIBO Page at
approximately 11:00 A.M., London time, on such Interest Determination Date
adjusted by the addition or subtraction of the Spread, if any, specified on
the face hereof, or by multiplication by the Spread Multiplier, if any.
"Reuters Screen LIBO Page" means the display designated as Page "LIBO" on
the Reuters Monitor Money Rate Service (or such other page as may replace
the LIBO page on the service for the purpose of displaying London interbank
offered rates of major banks);
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO
Page, the Calculation Agent will request the principal London offices of
each of four major banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotations for deposits of U.S. dollars for the period of the specified
Index Maturity to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination Date
and in a principal amount equal to an amount of not less than U.S. $1
million that is representative of a single transaction in such market at
such time. If at least two such quotations are provided, LIBOR will be the
arithmetic mean of such quotations adjusted by the addition or subtraction
of the Spread, if any, specified on the face hereof, or by multiplication by
the Spread Multiplier, if any. If fewer than two quotations are provided,
LIBOR in respect of such Interest Determination Date will be the arithmetic
mean of rates quoted by three major banks in The City of New York selected
by the Calculation Agent at approximately 11:00 A.M., New York City time, on
such Interest Determination Date for loans in U.S. dollars to leading
European banks, for the period of the specified Index Maturity and in a
principal amount of not less than U.S. $1 million that is representative of
a single transaction in such market at such time; provided, however, that if
fewer than three banks selected as aforesaid by the Calculation Agent are
quoting rates as mentioned in this sentence, LIBOR for such Interest Reset
Period will be the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable on the LIBOR Notes for which LIBOR is being determined
shall be the Initial Interest Rate) adjusted by the addition or subtraction
of the Spread, if any, specified on the face hereof, or by multiplication by
the Spread Multiplier, if any.
DETERMINATION OF TREASURY RATE. If the Base Rate is the Treasury Rate as
indicated on the face hereof, the interest rate shall equal the rate for the
auction held on the Interest Determination Date of direct obligations of the
United States ("Treasury bills") having the Index Maturity shown on the face
hereof as published in the H.15(519), under the heading "Treasury bills--auction
average (investment)" or, if not so
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published by 9:00 A.M., New York City time, on the Calculation Date (as defined
below) pertaining to such Interest Determination Date, the auction average rate
expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis as otherwise announced by the United
States Department of the Treasury, in either case, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or, by
multiplication by the Spread Multiplier, if any, specified on the face hereof.
In the event that the results of the auction of Treasury bills having the Index
Maturity shown on the face hereof are not published or reported as provided
above by 3:00 P.M., New York City time, on such Calculation Date or if no such
auction is held in a particular week, then the rate of interest hereon shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity shown on the face hereof,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
interest rate in effect hereon until the Interest Reset Date next succeeding the
Interest Reset Date to which such Interest Determination Date relates shall be
the rate in effect hereon on such Interest Determination Date.
The Calculation Date pertaining to an Interest Determination Date shall be
the tenth calendar day after such Interest Determination Date or if any such day
is not a Business Day, the next succeeding Business Day or the Business Day
preceding the Applicable Interest Payment Date or Maturity Date, as the case may
be. Initially, The Chase Manhattan Bank shall be the Calculation Agent. The
Calculation Agent shall calculate the interest rate hereon in accordance with
the foregoing and will confirm in writing such calculation to the Trustee, the
Company and any Paying Agent immediately after each determination. Neither the
Trustee nor any Paying Agent shall be responsible for any such calculation. At
the request of the Holder hereof the Calculation Agent will provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate which will become effective as of the next Interest Reset Date.
DETERMINATION OF PRIME RATE. If the Base Rate is the Prime Rate, as
indicated in the applicable Pricing Supplement, the interest rate shall equal
the rate calculated with reference to the Prime Rate and the Spread or Spread
multiplier, if any specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the "Prime
Rate" means, with respect to any Prime Rate Interest Determination Date, the
rate on such date as published in H.15(519) under the heading "Bank Prime Loan."
In the event that such rate is not published by 9:00 a.m., New York City time,
on the Calculation Date pertaining to such Interest Determination Date, then the
Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 Page (as defined below) as such bank's
prime rate or base lending rate as in effect for that Interest Determination
Date. "Reuters Screen USPRIME1" means the display designated as page "USPRIME1"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks). If fewer than four such rates
but more than one such rate appear on the Reuters Screen USPRIME1 Page for such
Interest Determina-
tion Date, the Prime Rate shall be determined by the Calculation Agent and will
be the arithmetic mean of the prime rates quoted on the basis of actual number
of days in the year divided by 360 as of the close of business on such Interest
Determination Date by at least two major money center banks in New York City
selected by the Calculation Agent (after consulting with the Company). If fewer
than two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate
will be determined by the Calculation Agent and will be the arithmetic mean of
the prime rates furnished in New York City by three substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, in each
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case having total equity capital of at least U.S. $500,000,000 and being subject
to supervision or examination by Federal or State authority, selected by the
Calculation Agent (after consulting with the Company) to provide such rate or
rates; provided, however, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will remain the Prime Rate
in effect on such Interest Determination Date.
DETERMINATION OF CMT RATE. If the Base Rate is the CMT Rate, as indicated
in the applicable Pricing Supplement, the interest rate shall equal the rate
(calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any) specified in such CMT Rate Note and in any applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any CMT Rate Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page under the caption "Treasury
Constant Maturities Federal Reserve Board release H.15 Mondays approximately
3:45 P.M.," under the column for the Designated CMT Maturity Index (as defined
below) for (i) if the Designated Telerate Page is 7055, the rate on such
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the week, or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 P.M., New
York City time, on the related Calculation Date, then the CMT Rate for such
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such Interest Determination Date
will be such treasury constant maturity rate for the designated CMT Maturity
Index (or other United States Treasury rate for the Designated CMT Maturity
Index) for the Interest Determination Date with respect to such Interest Reset
Date as may then be published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury that the
Calculation Agent determines to be comparable to the rate formerly displayed on
the Designated CMT Telerate Page and published in the relevant H.15(519). If
such information is not provided by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing side offer prices
as of approximately 3:30 P.M., New York City time, on the Interest Determination
Date reported, according to their written records, by three leading primary
United States government securities dealers (each, a "Reference Dealer") in the
City of New York selected by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for the most recently issued
direct noncallable fixed rate obligations of the United States ("Treasury
Notes") with an original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the CMT Rate for such Interest Determination Date will
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the Interest Determination Date
of three Reference Dealers in the City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for such Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index in an amount of at least U.S. $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT
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Rate will be the CMT Rate in effect on such Interest Determination Date. If two
Treasury Notes with an original maturity as described in the third preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the CMT Rate Note with the shorter remaining term
to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service designated in the applicable Pricing Supplement for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)). If no such page is
specified in the applicable Pricing Supplement, the Designated CMT Telerate Page
shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified in
the applicable Pricing Supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be 2 years.
DETERMINATION OF ELEVENTH DISTRICT COST OF FUNDS RATE. If the Base Rate is
the Eleventh District Cost of Funds Rate, as indicated in the applicable Pricing
Supplements, the interest rate shall equal the interest rates calculated with
reference to the Eleventh District Cost of Funds Rate and the Spread or Spread
Multiplier, if any specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement. "Eleventh
District Cost of Funds Rate" means, with respect to an Eleventh District Cost of
Funds Interest Determination Date the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Interest Determination Date falls, as set forth under the caption "11th
district" on Telerate Page 7058 (as defined below) as of 11:00 A.M., San
Francisco time, on such Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on such Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Interest Determination Date will be
the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Interest Determination Date, then the Eleventh District Cost of
Funds Rate determined as of such Interest Determination Date will be the
Eleventh District Cost of Funds Rate in effect on such Interest Determination
Date.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the Eleventh Federal Home Loan Bank District).
2. METHOD OF PAYMENT AND RECORD DATE.
Payments in U.S. Dollars of interest (other than interest payable at
Maturity or upon earlier redemption or repayment) will be made by mailing a
check to the Holder at the address of the Holder appearing on the Register (as
defined in the Indenture) on the applicable Record Date. Notwithstanding the
foregoing, (a) the Depositary, as holder of the Book-Entry Note shall be
entitled to receive payments of interest by wire transfer of immediately
available funds; and (b) a Holder of U.S. $10,000,000 or more in aggregate
principal amount of Certificated Notes of like tenor and terms (or a holder of
the equivalent thereof in a Specified Currency other than U.S. Dollars as
determined by the Exchange Rate Agent on the basis of the Market Exchange Rate
(as defined below)) shall be entitled to receive such payments in U.S. Dollars
by wire transfer of immediately available funds, but only if appropriate payment
instructions have been received in writing by the Company's Paying Agent in The
City of New York not less than 15 days prior to the applicable Interest Payment
Date. If so provided on the face hereof, simultaneously with any
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election by the Holder of a Note denominated in other than U.S. Dollars hereof
to receive payments of principal and any premium and interest in U.S. Dollars,
such Holder shall provide appropriate payment instructions to such Paying Agent
and all such payments will be made in immediately available funds to an account
maintained by the payee with a bank. Principal and any premium and interest
payable at Maturity or repayment or redemption will be paid in immediately
available funds upon surrender of such Note at the office of a Paying Agent in
The City of New York or at such other office or agency as the company may
designate.
Unless otherwise specified on the face hereof, the Record Date with respect
to any Interest Payment Date (as defined below) shall be the date 15 calendar
days immediately preceding such Interest Payment Date, whether or not such date
shall be a Business Day. Interest which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name the Note is registered at the close of business on the Record Date
for such interest; provided, however, that interest payable on the Interest
Payment Date occurring at maturity or upon earlier redemption or prepayment will
be to the person to whom principal shall be payable; provided, further that the
first payment of interest on any Note with an Original Issue Date between a
Record Date and an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Record Date to the registered owner on such
next succeeding Record Date.
Notwithstanding the foregoing, any interest that is payable but not
punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the registered holder thereof on such Record
Date, and shall be paid to the person in whose name such Note is registered on
the close of business on a special record date for the payment of such defaulted
interest to be fixed by the Company, notice whereof having been given to the
Trustee and the Holder of such Note not less than fifteen days prior to such
Special Record Date, or may be paid at any time and in any other lawful manner,
or as more fully provided in the Indenture.
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (a) not a day on which
banking institutions are authorized or required by law or regulation to be
closed in The City of New York; (b) if this Note is denominated in a Specified
Currency other than U.S. Dollars, (i) not a day on which banking institutions
are authorized or required by law or regulation to close in the financial center
of the country issuing the Specified Currency (which in the case of ECU shall be
London and Luxembourg City, Luxembourg) and (ii) a day on which banking
institutions in such financial center are carrying out transactions in such
Specified Currency; and (c) with respect to a LIBOR Note, a London Banking Day.
"London Banking Day" means any day on which dealings in deposits in U.S. Dollars
are transacted in the London interbank market. In connection with any
calculations, all percentages will be rounded, if necessary to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point being rounded upwards and all currency or currency unit amounts
used and resulting from such calculations on the Notes will be rounded to the
nearest one-hundredth of a unit (with .005 of a unit being rounded upwards).
3. PAYING AGENT AND REGISTRAR.
Initially, The Chase Manhattan Bank, as Trustee ("Trustee"), 450 W. 33rd
Street, New York, New York 10001, will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without notice.
4. INDENTURE.
The Company issued the Note as part of a Series of Notes under an indenture
dated as of August 24, 1984 as (1) supplemented and restated by The First
Supplemental Indenture dated as of January 31, 1990, as (2) further amended by
the First Supplement to the First Supplemental Indenture dated as of October 11,
1990 and (3) as further amended by the Second Supplement to the First
Supplemental Indenture, dated as of August 5, 1997 (as so supplemented and
amended, the "Indenture") among the Company,
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Texaco Inc. and the Trustee. The terms of the Note include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S. Code SectionSection 77aaa-77bbbb) as amended (the "Act"). The
Series of Notes are subject to all such terms, and the holder of this Note is
referred to the Indenture and the Act for a statement of them. Notwithstanding
Section 8.01 of the Indenture, the Company hereby covenants that it will not
terminate its obligations with respect to the Notes by making certain deposits
with the Trustee, and the Trustee and a Paying Agent shall have no obligation
under Article 8 with respect to the Notes. This Note is one of a Series of Notes
of the Company designated as its Series 1922 Medium Term Notes.
5. GUARANTY.
This Note is guaranteed by Texaco Inc.
6. OPTIONAL REDEMPTION.
If specified on the face hereof, this Note may be redeemed, as a whole or
from time to time in part, at the option of the Company, on not less than 30 nor
more than 60 days' prior notice given as provided in the Indenture, on any
Redemption Date(s) and at the related Redemption Price(s) set forth on the face
hereof. If less than all the Outstanding Notes of like tenor and terms are to be
redeemed, the particular Notes to be redeemed shall be selected by the Trustee
not more than 60 days prior to the Redemption Date from the Outstanding Notes of
like tenor or terms not previously called for redemption. Such selection shall
be of principal amounts equal to the minimum authorized denomination for such
Notes or any integral multiple thereof. Subject to the immediately preceding
sentence, such selection shall be made by any method as the Trustee deems fair
and appropriate. The notice of such redemption shall specify which Notes are to
be redeemed. In the event of redemption of this Note in part only, a new Note or
Notes of this series of like tenor or terms for the unredeemed portion hereof
will be issued to the Holder hereof upon the cancellation hereof.
7. MANDATORY REDEMPTION.
Unless so stated on the face hereof, this Note is not subject to mandatory
redemption.
8. REPAYMENT AT OPTION OF HOLDER.
If specified on the face hereof, this Note will be subject to repayment at
the option of the Holder hereof on the Repayment Date(s) and at the Repayment
Price(s) indicated on the face hereof. If no such Repayment Date is set forth on
the face hereof, this Note may not be so repaid at the option of the Holder
hereof prior to Stated Maturity. On each Repayment Date, if any, this Note shall
be repayable in whole or in part at the option of the Holder hereof at the
applicable Repayment Price set forth on the face hereof, together with interest
thereon to the date of repayment. For this Note to be repaid in whole or in part
at the option of the Holder hereof, the Paying Agent in The City of New York
must receive not less than 30 nor more than 45 days prior to the Repayment Date
(i) the Note with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name of the Holder of the Note, the
principal amount of the Note, the certificate number of the Note or a
description of the Note's tenor or terms, the principal amount of the Note to be
prepaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be prepaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by such Paying Agent no later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed are received by such Paying Agent by such fifth Business Day.
Exercise of such repayment option shall be irrevocable. Such option may be
exercised by the Holder for less than that entire principal amount provided that
the principal amount remaining outstanding after repayment is an authorized
denomination.
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9. EXTENSION OF MATURITY.
If so indicated on the face of the Note, the Company has the option to
extend the Maturity Date of the Note for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the "Final
Maturity Date", as set forth above.
The Company may exercise such option by notifying the Trustee of such
exercise at least 45 but not more than 60 days prior to the Maturity Date in
effect prior to the exercise of such option (the "Original Maturity Date"). No
later than 40 days prior to the Original Maturity Date, the Trustee will mail to
the holder of the Note a notice (the "Extension Notice") relating to such
Extension Period, first class, postage prepaid, setting forth: (a) the election
of the Company to extend the Maturity Date of such Note; (b) the new Maturity
Date; (c) in the case of a Fixed Rate Note, the interest rate applicable to the
Extension Period or, in the case of a Floating Rate Note, the Spread or Spread
Multiplier applicable to the Extension Period; and (d) the provisions, if any,
for redemption during the Extension Period, including the date or dates on which
or the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by the
Trustee of an Extension Notice to the holder of a Note, the Maturity Date of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, such Note will have the
same terms as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the original
Maturity Date for a Note, the Company may, at its option, revoke the interest
rate, in the case of a Fixed Rate Note, or the Spread or Spread Multiplier, in
the case of a Floating Rate Note, provided for in the Extension Notice and
establish a higher interest rate, in the case of a Fixed Rate Note, or a higher
Spread or Spread Multiplier, in the case of a Floating Rate Note, for the
Extension Period by causing the Trustee to mail notice of such higher interest
rate or higher Spread or Spread Multiplier, as the case may be, first class,
postage prepaid, to the holder of such Note. Such notice shall be irrevocable.
All Notes with respect to which the Maturity Date is extended will bear such
higher interest rate, in the case of a Fixed Rate Note, or higher Spread or
Spread Multiplier, in the case of a Floating Rate Note, for the Extension
Period, whether or not tendered for repayment.
If the Company elects to extend the Maturity Date of a Note, the holder of
such Note will have the option to elect repayment of such Note by the Company on
the Original Maturity Date at a price equal to the principal amount thereof plus
any accrued interest to such date. In order for a Note to be so repaid on the
Original Maturity Date, the holder thereof must follow the procedures set forth
above under "Repayment" for optional repayment, except that the period for
delivery of such Note or notification to the Trustee shall be at least 25 but
not more than 35 days prior to the Original Maturity Date and except that a
holder who has tendered a Note for repayment pursuant to an Extension Notice
may, by written notice to the Trustee revoke any such tender for repayment until
the close of business on the tenth calendar day prior to the Original Maturity
Date.
10. DENOMINATIONS AND CURRENCY.
The authorized denominations of Notes denominated in U.S. Dollars will be
U.S.$100,000 and any larger amount that is an integral multiple of U.S.$1,000.
The authorized denominations of Notes denominated in a currency other than U.S.
Dollars will be as set forth on the face hereof.
If the Specified Currency is other than U.S. Dollars and if such option is
specified on the face hereof, the Holder may elect to receive payment in respect
of this Note in U.S. Dollars based upon the Exchange Rate as determined by the
Exchange Rate Agent (initially, The Chase Manhattan Bank) appointed by the
Company for such purpose based on the highest firm bid quotation for U.S.
Dollars received by such Exchange Rate Agent at approximately 11:00 A.M. New
York City time on the second Business Day preceding the applicable payment date
(or if no such rate is quoted on such date the last date on which such rate was
quoted), from three recognized foreign exchange dealers in The City of New York
selected
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by the Exchange Rate Agent and approved by the Company (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer for settlement on
such payment date of the aggregate amount of the Specified Currency payable on
such payment date in respect of all Notes denominated in such Specified
Currency. All currency exchange costs will be borne by the Holders of such Notes
by deductions from such payments. If no such bid quotations are available,
payments will be made in the Specified Currency unless such Specified Currency
is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, in which case the Company will be
entitled to make payments in respect hereof in U.S. Dollars as provided below.
Except as set forth below, if payment on a Note is required to be made in a
Specified Currency other than U.S. Dollars and such currency is unavailable due
to the imposition of exchange controls or to other circumstances beyond the
Company's control or is no longer used by the government of the country issuing
such currency or for the settlement of transactions by public institutions of or
within the international banking community, then all payments due on that due
date with respect to such Note shall be made in U.S. Dollars. The amounts so
payable on any date in such Specified Currency shall be converted into U.S.
Dollars at a rate determined by the Exchange Rate Agent on the basis of the most
recently available noon buying rate for cable transfers in The City of New York
as determined by the Federal Reserve Bank of New York (the "Market Exchange
Rate").
If payment on a Note is required to be made in ECU and ECU is unavailable
due to the imposition of exchange controls or to other circumstances beyond the
Company's control or is no longer used in the European Monetary System, then all
payments due on that due date with respect to such Note shall be made in U.S.
Dollars. The amount so payable on any date in ECU shall be converted into U.S.
Dollars at a rate determined by the Exchange Rate Agent, as of the second
Business Day prior to the date on which such payment is due on the following
basis:
The component currencies of the ECU for this purpose (the "Components")
shall be the currency amounts which were components of the ECU as of the
last date on which the ECU was used in the European Monetary System. The
equivalent of the ECU in U.S. Dollars shall be calculated by aggregating the
U.S. Dollar equivalents of the Components.
The U.S. Dollar equivalent of each of the Components shall be determined
by the Exchange Rate Agent on the basis of the most recently available
Market Exchange Rate for such component.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a
Component shall be divided or multiplied in the same proportion. If two or
more component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an amount in
such single currency equal to the sum of the amounts of the consolidated
component currencies expressed in such single currency. If any component
currency is divided into two or more currencies, the amount of that currency
as a Component shall be replaced by amounts of such two or more currencies,
each of which shall have a value at the time of the division equal to the
amount of the former component currently divided by the number of currencies
into which that currency was divided.
All determinations referred to above of the Exchange Rate Agent shall be at
its sole discretion (except to the extent expressly provided herein that any
determination is subject to approval by the Company) and, in the absence of
manifest error, shall be conclusive for all purposes and binding upon the
Holders of the Notes and the Trustee and the Exchange Rate Agent shall have no
liability therefor.
11. TRANSFER AND EXCHANGE.
A holder may transfer or exchange a Note in accordance with the Indenture.
The Registrar may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Note selected for redemption. Also, it need not transfer or exchange any
Notes for a period
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of 15 days before a selection of Notes to be redeemed. 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 a Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the person in whose name a Note is registered as the
owner hereof for all purposes whether or not such Note be overdue and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
12. PERSONS DEEMED OWNERS.
The registered holder of a Note may be treated as the owner of it for all
purposes.
13. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Series of Notes or the Indenture with
respect to the Series of Notes may be amended with the consent of the holders of
at least 50.1% in principal amount of the Series of Notes outstanding, and any
past default or compliance with any provision may be waived with the consent of
the holders of at least 50.1% in principal amount of the Series of Notes
outstanding. Without the consent of any Noteholder, the Indenture or the Series
of Notes may be amended to cure any ambiguity, defect or inconsistency; to
provide for assumption of the Company's obligations to Noteholders; or to make
any change that does not adversely affect the rights of any Noteholder.
14. RESTRICTIVE COVENANTS.
The Series of Notes are unsecured general obligations of the Company limited
to U.S.$500,000,000 principal amount or the equivalent thereof in other
currencies or currency units, subject to reduction as a result of the sale of
other debt securities by the Company. The Indenture does not limit other
unsecured debt. It does limit certain mortgages and sale-leaseback transactions
of Texaco Inc. if the property mortgaged or leased is a refinery or a
manufacturing plant in the United States or any oil or gas producing property
onshore or offshore the United States that is of material importance to the
total business of Texaco Inc. and its consolidated subsidiaries. The limitations
are subject to a number of important qualifications and exceptions. Once a year
Texaco Inc. must report to the Trustee on compliance with the limitations.
If a successor corporation assumes all the obligations of the Company under
the Series of Notes and the Indenture with respect to such Series of Notes, the
Company will be released from those obligations.
15. DEFAULTS AND REMEDIES.
An Event of Default is: default for 30 days in payment of interest on the
Series of Notes; default in payment of principal or premium, if any, on the
Series of Notes; failure by the Company or by Texaco Inc., as the case may be,
for 90 days after notice of the Company to comply with any of its other
agreements in the Series of Notes or the Indenture with respect to the Series of
Notes; and certain events of bankruptcy or insolvency. If an Event of Default
occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the Series of Notes may declare all the Notes of the Series
to be due and payable immediately. If the principal of any Original Issue
Discount Note is declared to be due and payable the amount of principal due and
payable with respect to such Note shall be limited to the sum of the aggregate
principal amount of such Note multiplied by the Issue Price (expressed as a
percentage of the aggregate principal amount) plus the original issue discount
accrued from the date of issue to the date of declaration, which accrual shall
be calculated using the "interest method" (computed in accordance with generally
accepted accounting principles) in effect on the date of declaration. An
Original Issue Discount Note is a Note, including any zero-coupon Note, which
has a stated redemption price at maturity that exceeds its Issue Price by at
least 0.25% of its Principal Amount, multiplied by the number of full years from
the Original Issue Date to the Maturity Date for such Note. Noteholders may not
enforce the Series of Notes or the Indenture with respect to the Series of Notes
except as provided in the Indenture. The Trustee may
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require indemnity satisfactory to it before it enforces the Series of Notes or
the Indenture with respect to the Series of Notes. Subject to certain
limitations, holders of a majority in principal amount of the Series of Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders of the Series notice of any continuing default (except
a default in payment of principal or premium or interest) if it determines that
withholding notice is in their interests.
16. TRUSTEE DEALINGS WITH COMPANY OR TEXACO INC.
The Chase Manhattan Bank, as Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company, Texaco Inc. or any affiliates of either, and may
otherwise deal with the Company, Texaco Inc. or any affilites of either, as if
it were not Trustee.
17. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company or
Texaco shall not have any liability for any obligations of the Company under the
Series of Notes or the Indenture with respect to the Series of Notes or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Noteholder of the Series by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Notes.
18. AUTHENTICATION.
This Note shall not be valid until authenticated by the manual signature of
the Trustee or an authenticating agent.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
The Company will furnish to any Noteholder upon written request and without
charge a copy of the Indenture. Requests may be made to the Company at 1013
Centre Road, Wilmington, Delaware 19801, with a copy to: Treasurer, Texaco Inc.,
2000 Westchester Avenue, White Plains, NY 10650.
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ASSIGNMENT
I or we assign and transfer this Note to
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
<TABLE>
<S> <C>
</TABLE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint ________________________________________________________
___________________________________________________________________________agent
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Dated: _______________________________ Signed: ______________________________
- - --------------------------------------------------------------------------------
(Sign exactly as name appears on the other side of this Note)
GUARANTY
TEXACO INC., a Delaware corporation (the "Guarantor"), unconditionally
guarantees to the holder of this Note the due and punctual payment of the
principal of and the premium and interest, if any, on this Note.
The Guarantor shall not be entitled to receive any payments based upon a
right of subrogation with respect to any amounts paid by the Guarantor to
holders of the Series of Notes until the principal and the premium and interest,
if any, on all Notes of the Series shall have been paid in full or for which
payment has been provided.
TEXACO INC.
By ___________________________________
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OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion hereof specified below) pursuant to its terms
at a price equal to the applicable Repayment Price thereof together with
interest to the Repayment Date, to the undersigned at __________________________
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Please print or type name and address of the undersigned)
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof which the Holder elects to have repaid:
____________; and specify the denomination or denominations (which shall be in
authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
- - --------------------------------------------------------------------------------
Date: ________________________ ________________________________________________
(Signature)
Social Security or Taxpayer I.D. Number: _______________________________________
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EXHIBIT D
TO
DISTRIBUTION AGREEMENT
FORM OF
OPINION OF PAUL R. LOVEJOY, ESQ.
[Date]
To the Agents [or Purchasers] party to the
Distribution Agreement dated with
TEXACO CAPITAL INC. AND TEXACO INC.
c/o [ ]
Dear Sirs:
I have acted as Counsel for Texaco Capital Inc. (the "Company") a Delaware
corporation and Texaco Inc. ("Texaco"), a Delaware corporation, in connection
with [the issuance and sale today by the Company to you pursuant to the terms of
the aforementioned Distribution Agreement (the "Distribution Agreement") dated
as of , 19 of $ principal amount of its % due
("Notes") guaranteed (the "Guaranties") by Texaco.] [the execution
and delivery of the Distribution Agreement (the "Distribution Agreement") dated
as of , 19 among the Company, Texaco and the agents [purchasers] named
therein (the "Agents") [(the "Purchasers")] pursuant to which the Company may
sell up to $ aggregate principal amount of its medium-term notes (the
"Notes") guaranteed (the "Guaranties") by Texaco]. This opinion is given
pursuant to Paragraph [6(j)] [7(c)(i)] of the Distribution Agreement.
Capitalized terms not otherwise defined herein are defined as set forth in the
Distribution Agreement.
I have participated in the preparation of the Distribution Agreement, the
Indenture, the Notes, the Guaranty, [the Terms Agreement,] the Registration
Statement, the Prospectus and the supplement[s] to the Prospectus. As to various
questions of fact material to my opinion I have relied upon representations made
in the Distribution Agreement and upon the certificates of officers of the
Company and Texaco. I have also examined such certificates of public officials,
corporate documents and records and other certificates, opinions and instruments
and have made such other investigations as I have deemed necessary in connection
with the opinions hereinafter set forth.
Based on the foregoing and upon such investigation as I have deemed
necessary, I give you my opinion as follows with respect to the Company:
1. ORGANIZATION AND STANDING, ETC. OF THE COMPANY. The Company has been
duly organized and is validly existing in good standing under the laws of
Delaware and is duly qualified to do business and is in good standing as a
foreign corporation in all jurisdictions where the nature of its properties
or business requires it.
2. CORPORATE POWER, ETC. TO PERFORM THE DISTRIBUTION AGREEMENT, ETC. The
Company has the corporate power and authority to enter into and perform the
Distribution Agreement, the Indenture[, the Terms Agreement] and to issue
and deliver the Notes.
3. EXECUTION AND DELIVERY, ETC. BY THE COMPANY OF THE DISTRIBUTION
AGREEMENT, ETC. The execution, delivery and performance by the Company of
the Distribution Agreement, the Indenture[, the Terms Agreement] and the
Notes have been duly authorized by all requisite corporate action, and the
Distribution Agreement, the Indenture [and the Notes] have been duly
executed and delivered by the Company.
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4. LEGALITY, ENFORCEABILITY, ETC. OF THE COMPANY'S OBLIGATIONS UNDER THE
DISTRIBUTION AGREEMENT, ETC. The Distribution Agreement, the Indenture[, the
Terms Agreement] and the Notes are legal, valid and binding obligations of
the Company and are enforceable against the Company in accordance with their
terms, except as may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights in general and except as
rights to indemnity and contribution under the Distribution Agreement may be
limited under applicable law. The enforceability of the Company's
obligations under the Distribution Agreement, the Indenture and the Notes is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5. COMPLIANCE, ETC. WITH CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE
COMPANY. The execution and delivery of the Distribution Agreement, the
Indenture[, the Terms Agreement] and the Notes and the performance by the
Company of their terms and the issuance of the Notes do not conflict with or
result in a violation of the Certificate of Incorporation or By-Laws of the
Company or of any agreement, instrument, order, writ, judgment or decree
known to me to which the Company is a party or is subject.
6. NO APPROVAL, ETC. REQUIRED. No approval, authorization or other
action by, or filing with, any governmental authority, is required in
connection with the execution and delivery by the Company of the
Distribution Agreement, the Indenture[, the Terms Agreement] or the Notes.
Based on the foregoing and upon such investigation as I have deemed
necessary, I give you my opinion as follows with respect to Texaco.
1. ORGANIZATION AND STANDING, ETC. OF TEXACO. Texaco has been duly
organized and is validly existing in good standing under the laws of
Delaware and is duly qualified to do business and is in good standing as a
foreign corporation in all of the other states of the United States.
2. CORPORATE POWER, ETC. TO PERFORM THE DISTRIBUTION AGREEMENT, ETC.
Texaco has the corporate power and authority to enter into and perform the
Distribution Agreement, the Indenture[, the Terms Agreement] and to execute
and deliver the Guaranties.
3. EXECUTION AND DELIVERY, ETC. BY TEXACO OF THE DISTRIBUTION AGREEMENT,
ETC. The execution, delivery and performance by Texaco of the Distribution
Agreement, the Indenture[, the Terms Agreement] and the Guaranties have been
duly authorized by all requisite corporate action, and the Distribution
Agreement, the Indenture[, the Terms Agreement] [and Guaranties] have been
duly executed and delivered by Texaco.
4. LEGALITY, ENFORCEABILITY, ETC. OF TEXACO'S OBLIGATIONS UNDER THE
DISTRIBUTION AGREEMENT, ETC. The Distribution Agreement, the Indenture[, the
Terms Agreement] and the Guaranties are legal, valid and binding obligations
of Texaco and are enforceable against Texaco in accordance with their terms,
except as may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights in general
and except as rights to indemnity and contribution under the Distribution
Agreement may be limited under applicable law. The enforceability of
Texaco's obligations under the Distribution Agreement, the Indenture[, the
Terms Agreement] and the Guaranties is subject to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5. COMPLIANCE, ETC. WITH CERTIFICATE OF INCORPORATION AND BY-LAWS OF
TEXACO. The execution and delivery of the Distribution Agreement, the
Indenture[, the Terms Agreement] and the Guaranties and the performance by
Texaco of their terms and the issuance of the Guaranties do not conflict
with or result in a violation of the Certificate of Incorporation or By-Laws
of Texaco or of any agreement, instrument, order, writ, judgment or decree
known to me to which Texaco is a party or is subject.
D-2
<PAGE>
6. NO APPROVAL, ETC. REQUIRED. No approval, authorization or other
action by, or filing with, any governmental authority, is required in
connection with the execution and delivery by Texaco of the Distribution
Agreement, the Indenture[, the Terms Agreement] or the Guaranties.
I give you my further opinion that:
1. QUALIFICATION OF THE INDENTURE. The Indenture has been duly qualified
under the TIA.
2. REGISTRATION STATEMENT IS EFFECTIVE, ETC. The Registration Statement
has become effective under the Act, and, to the best of my knowledge 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 contemplated under the Act, and the Registration Statement and
the Prospectus, as of their respective effective or issue dates or in the
case of documents incorporated by reference in the Prospectus as of the
respective dates such documents were filed with the Commission, complied as
to form in all material respects with the requirements of the Act and the
applicable rules and regulations; I have no reason to believe that (except
for the financial statements included therein, as to which I express no
opinion) the Registration Statement and the Prospectus on the date of the
Distribution Agreement contained, any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (except as aforesaid) as of [date of agreement to purchase Notes
as principal, if applicable, contained, and as of] the date hereof, contains
any untrue statement of a material fact or [omitted or] omits to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and Prospectus of material
statutes, material legal and governmental proceedings and material contracts
and other documents involving the Company and Texaco are accurate in all
material respects and fairly present the information required to be shown;
and I do not know of any legal or governmental proceedings involving the
Company and Texaco required to be described in the Prospectus which are not
described as required, nor of any contracts or documents involving the
Company or Texaco of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required; it
being understood that I express no opinion as to information furnished by a
Purchaser or Agent specifically for use in the Registration Statement and
the Prospectus.
[To the extent any Notes are denominated in the currency of a country other
than the United States, no opinion is expressed with respect to the laws of any
such country. I note that (i) a New York statute provides that with respect to a
foreign currency obligation a court of the State of New York shall render a
judgment or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange prevailing
on the date of entry of such judgment or decree and (ii) a United States Federal
court in New York may award judgment in United States dollars, and I express no
opinion as to the rate of exchange such court would apply.]
Very truly yours,
D-3
<PAGE>
EXHIBIT E
TO
DISTRIBUTION AGREEMENT
FORM OF
OPINION OF DAVIS POLK & WARDWELL
COUNSEL FOR THE AGENTS [PURCHASER]
[Date]
[Names and Addresses of Agents or Purchasers]
Gentlemen:
We have acted as counsel for [the several agents (the "Agents")] [the
several purchasers (the "Purchasers")] named in the distribution Agreement dated
as of (the "Distribution Agreement"), with Texaco Capital Inc.
(the "Company") and Texaco Inc. ("Texaco") in connection with [the execution and
delivery of the Distribution Agreement pursuant to which the Company may sell up
to $ aggregate principal amount of its medium-term notes (the "Notes")]
[the purchase by the Several Purchasers of $ principal amount of
medium-term notes (the "Notes") of the Company] guaranteed (the "Guaranties") by
Texaco. The Notes are to be issued pursuant to an Indenture dated as of August
24, 1984 as (1) supplemented and restated by the First Supplemental Indenture
dated as of January 31, 1990, (2) further amended by the First Supplement to the
First Supplemental Indenture dated as of October 11, 1990 and (3) further
amended by the Second Supplement to the First Supplemental Indenture, dated as
of August 5, 1997, (as so supplemented and amended, and as further amended by
the Trust Indenture Reform Act of 1990 (P.L. 101-550), the "Indenture"), among
the Company, Texaco and The Chase Manhattan Bank, as Trustee.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion, including those relating to the
authorization, execution and delivery by the Company and Texaco of the Indenture
[the Terms Agreement] and the Distribution Agreement, the authorization,
[issuance and sale] of the Notes by the Company and the authorization [and
issuance] by Texaco of the Guaranties.
We have participated in the preparation of the Company's registration
statement on Form S-3 (Registration No. ) (other than the documents
incorporated by reference in the prospectus included therein (the "Incorporated
Documents")) filed with the Securities and Exchange Commission (the
"Commission") pursuant to the provisions of the Securities Act of 1933, as
amended (the "Act"). Although we did not participate in the preparation of the
Incorporated Documents, we have reviewed such documents. In addition, we have
reviewed evidence that the registration statement [as amended] was declared
effective under the Act and that the Indenture was qualified under the Trust
Indenture Act of 1939, as amended. The registration statement (including the
Incorporated Documents) as amended to the Commencement Date (as defined in the
Distribution Agreement) is hereinafter referred to as the "Registration
Statement", and the prospectus included in the Registration Statement as
supplemented by the prospectus supplement specifically relating to the Notes is
hereinafter referred to as the "Prospectus".
E-1
<PAGE>
Based upon the foregoing, we are of the opinion that:
1. the Indenture has been duly authorized, executed and delivered by
the Company and Texaco, is a valid and binding agreement of the Company and
Texaco in accordance with its terms and has been duly qualified under the
Trust Indenture Act of 1939, as amended:
2. the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof will be valid and
binding obligations of the Company in accordance with their terms and
entitled to the benefits of the Indenture;
3. the Guaranties endorsed on the Notes pursuant to the Indenture have
been duly authorized by Texaco and, when executed in accordance with the
provisions of the Indenture, and when the Notes are executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof, such Guaranties will be
valid and binding obligations of Texaco in accordance with their terms;
4. the Distribution Agreement has been duly authorized, executed and
delivered by the Company and Texaco and is a valid and binding agreement of
the Company and Texaco except as rights to indemnity and contribution
thereunder may be limited by applicable law; [and]
[5. the Terms Agreement has been duly authorized, executed and
delivered by the Company and Texaco and is a valid and binding agreement of
the Company and Texaco;]
[6.] the statements in the Prospectus under "Description of the
Medium-Term Notes," "Description of the Debt Securities" and "Plan of
Distribution", insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings.
We have not ourselves checked the accuracy or completeness of, or otherwise
verified, the information furnished with respect to other matters in the
Registration Statement or the Prospectus. We have generally reviewed and
discussed with representatives of the agents [Purchasers] and with certain
officers and employees of, and counsel and independent public accountants for,
the Company and Texaco the information furnished, whether or not subject to our
check or verification. On the basis of such consideration, review and
discussion, but without independent check or verification, we (i) are of the
opinion that (except for the financial statements and related schedules included
therein, as to which we are not called upon to express an opinion) the
Registration Statement and the Prospectus comply as to form in all material
respects with the Act and the applicable rules and regulations thereunder and
(ii) believe that (except for the financial statements and related schedules
included therein, as to which we are not called upon to express a belief and
except for that part of the Registration Statement that constitutes the Form T-1
filed with the Commission relating to the Indenture) the Registration Statement,
and the Prospectus as of the Commencement Date does not contain any 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, and
that the Prospectus (except as aforesaid) [,as of the date of your agreement to
purchase Notes as principal did not, and] does not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
We have examined the opinion dated of Paul R. Lovejoy, Esq.,
General Counsel of the Company and Assistant General Counsel of Texaco,
delivered to the Agents [Purchasers] pursuant to [Paragraph [7(c)(ii)] of the
Distribution Agreement, and we believe that such opinion is responsive to the
requirements thereof. We have also examined the letter dated of Arthur
Andersen LLP, relating to the financial statements incorporated by reference in
the Registration Statement and the other matters referred to in such letter,
delivered to the Agents [Purchasers] pursuant to Paragraph [6(j)] [7(c)(vi)] of
the Distribution Agreement. We have participated in discussions with
representatives of
E-2
<PAGE>
Arthur Andersen LLP relating to the form of such letter, and we believe that it
is substantially in the form agreed to.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
E-3
<PAGE>
EXHIBIT F
TO
DISTRIBUTION AGREEMENT
FORM OF
SECRETARY'S CERTIFICATE
I, , [the] [an] [Assistant] Secretary of Texaco Capital
Inc., a Delaware corporation (the "Company"), pursuant to the Distribution
Agreement dated among the parties named therein, DO HEREBY CERTIFY
that:
(1) There has been no amendment to the Restated Certificate of
Incorporation of the Company since [ , ] [except set forth any
changes.]
(2) Attached hereto as Exhibit A is a true and complete copy of the
By-Laws of the Company.
(3) There are no proceedings pending or threatened for the dissolution
or liquidation of the Company or threatening its existence.
(4) There has been no amendment to those certain resolutions adopted by
the Board of Directors of the Company on [by unanimous written
consent;] [at which a quorum for the transaction of business was present and
acting throughout]; and such resolutions (a copy of which is attached hereto
as Exhibit B) are still in full force and effect in the form adopted.
(5) To the best of my knowledge and based on reasonable investigation no
stop order suspending the effectiveness of the Registration Statement
(Registration No. ) is in effect and no proceedings for such purpose
are pending or threatened by the Securities and Exchange Commission.
(6) The persons named below were duly elected to the offices indicated
and were serving in such capacities on the date on which they executed the
indicated instrument, and the signatures opposite their names are the
respective signatures of such persons: [set forth name, titles and specimen
signature of each person who signed any of the Distribution Agreement,
Indenture, Terms Agreement, Registration Statement or Notes indicating which
instrument was signed by such person].
--------------------------------------
[ASSISTANT] SECRETARY OF
TEXACO CAPITAL INC.
Dated:
F-1
<PAGE>
EXHIBIT G
DISTRIBUTION AGREEMENT
FORM OF
OFFICER'S CERTIFICATE
I, , [Title] of Texaco Inc., a Delaware corporation
("Texaco"), pursuant to the terms of the Distribution Agreement dated
among the parties named therein, DO HEREBY CERTIFY that to the
best of my knowledge and based on reasonable investigation: (1) no stop order
suspending the effectiveness of the Registration Statement on Form S-3
(Registration No. ) is in effect and no proceedings for such purpose are
pending before or threatened by the Securities and Exchange Commission and (2)
there has been no material adverse change (not in the ordinary course of
business) in the financial condition of Texaco and its consolidated
subsidiaries, taken as a whole, from that set forth in or contemplated by the
Prospectus (as defined in the aforementioned Distribution Agreement).
Dated:
______________________________________
[TITLE] OF TEXACO INC.
G-1
<PAGE>
EXHIBIT H
TO
DISTRIBUTION AGREEMENT
FORM OF
SECRETARY'S CERTIFICATE
I, , [the] [an] [Assistant] Secretary of Texaco Inc., a
Delaware corporation ("Texaco"), pursuant to the terms of the Distribution
Agreement dated among the parties named therein, DO HEREBY CERTIFY
that:
(1) There has been no amendment to the Restated Certificate of
Incorporation of Texaco since [ ] [except set forth any changes].
(2) Attached hereto as Exhibit A is a true and complete copy of the
By-Laws of Texaco.
(3) There are no proceedings pending or threatened for the dissolution
or liquidation of Texaco or threatening its existence.
(4) There has been no amendment to those certain resolutions adopted by
the Board of Directors of Texaco on at which a quorum for the
transaction of business was present and acting throughout; and such
resolutions (a copy of which is attached hereto as Exhibit B) are still in
full force and effect in the form adopted.
(5) The persons named below were duly elected to the offices indicated
and were serving in such capacities on the date on which they executed the
indicated instrument, and the signatures opposite their names are the
respective signatures of such persons: [set forth name, titles and specimen
signature of each person who signed any of the Distribution Agreement,
Indenture, Terms Agreement, Registration Statement or Guaranty indicating
which instrument was signed by such person].
______________________________________
[ASSISTANT] SECRETARY OF
TEXACO INC.
Dated:
H-1
<PAGE>
EXHIBIT I
TO
DISTRIBUTION AGREEMENT
LETTER OF ARTHUR ANDERSEN LLP
[LEGEND. This represents a letter we would be prepared to sign as of the
effective date of the registration statement if the Agent had been chosen at
that date and requested such a letter. Based on our discussions with Texaco
Inc., the procedures set forth are similar to those that experience indicates
agents often request in such circumstances. The text of the final letter will
depend, of course, on whether the Agent who is selected requests that other
procedures be performed to meet his needs and whether the Agent requests that
any of the procedures be updated to the date of issuance of the signed letter.]
[Date in accordance with the Distribution Agreement]
[Name of Agent]
Dear Sirs:
We have audited the consolidated balance sheet of Texaco Inc. and subsidiary
companies (the Company) as of December 31, [insert year of latest, audited,
publicly available financial statements], and [insert prior year of latest,
audited, publicly available financial statements], and the related statements of
consolidated income, retained earnings, stockholders' equity and cash flows for
each of the three years in the period ended December 31, [insert year of latest,
audited, publicly available financial statements], and the financial statement
schedules, all included or incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, [insert year of latest,
audited, publicly available financial statements], and incorporated by reference
in the registration statement (No. [33- ]) on Form S-3, filed on February
18, 1998 by Texaco Capital Inc. under the Securities Act of 1933 (the Act); our
reports with respect to the aforementioned consolidated financial statements and
financial statement schedules are also incorporated by reference in the
registration statement and prospectus. The registration statement, effective
, 19 and prospectus supplement dated , 19 , are herein
referred to as the registration statement and the prospectus, respectively.
In connection with the registration statement and prospectus:
1. We are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations thereunder.
2. In our opinion, the consolidated financial statements and financial
statement schedules of the Company audited by us and incorporated by
reference in the registration statement and prospectus comply in form in all
material respects with the applicable accounting requirements of the Act and
the Securities Exchange Act of 1934 and the related published rules and
regulations.
3. We have not audited any financial statements of the Company as of
any date or for any period subsequent to December 31, [insert year of
latest, audited, publicly available financial statements], although we have
performed an audit for the year ended December 31, [insert year of latest,
audited, publicly available financial statements], the purpose (and
therefore the scope) of such audit was to enable us to express our opinion
on the consolidated financial statements as of December 31, [insert year of
latest, audited, publicly available financial statements], and for the year
then ended, but not on the consolidated financial statements for any interim
period within that year. Therefore, we are unable to and do not express any
opinion on the unaudited consolidated balance sheet as of [insert either:
March 31, March 31 and June 30, or March 31, June 30 and September 30],
[insert the year subsequent to the latest, audited, publicly available
financial statements], the unaudited statement of consolidated income for
the [insert either: three month period ended March 31: three month period
I-1
<PAGE>
ended March 31 and three and six month periods ended June 30; or three month
period ended March 31, three and six month periods ended June 30 and three
and nine month periods ended September 30], [insert year subsequent to; and
year of latest, audited, publicly available financial statements], or the
unaudited condensed statement of consolidated cash flows for the [insert
either: three month period ended March 31, three and six month periods ended
March 31 and June 30, or the three, six and nine month periods ended March
31, June 30, and September 30], [insert year subsequent to; and year of
latest, audited, publicly available financial statements], included in the
Company's quarterly report[s] on Form 10-Q for the quarter[s] ended [insert
either: March 31, March 31 and June 30 or March 31, June 30 and September
30], [insert year subsequent to year of latest, audited, publicly available
financial statements], incorporated by reference in the registration
statement and prospectus, or on the financial position, results of
operations, or cash flows as of any date or for any period subsequent to
December 31, [insert year of latest, audited, publicly available financial
statements].*
4. For purposes of this letter, we have read the [insert current and
prior year if audited year-end financial statements are not available]
minutes of the meetings of the Board of Directors and the Executive
Committee of the Board of Directors of the Company, certain of which are in
draft form, as set forth in the minute books at [insert date five business
days prior to Closing]. Company officials having advised us that the minutes
of all such meetings through that date were set forth therein ; and have
carried out other procedures to [insert date five business days prior to
Closing] (our work did not extend to the period from [insert date four
business days prior to Closing], to [insert Closing Date], inclusive), as
follows:
With respect to the interim period[s] ended [insert either: March 31,
March 31 and June 30 or March 31, June 30, and September 30], [insert year
subsequent to year of latest, audited, publicly available financial
statements] and [year of latest, audited, publicly available financial
statements] we have:*
(a) Read the unaudited consolidated balance sheet as of [insert
either March 31, March 31 and June 30 or March 31, June 30 and September
30], [insert year subsequent to year of latest, audited, publicly
available financial statements] and unaudited statement of consolidated
income, and condensed statement of consolidated cash flows for the
[insert either: three month period ended March 31, three and six month
periods ended March 31 and June 30 or the three, six and nine month
periods ended March 31, June 30 and September 30], [insert year
subsequent to: and year of latest, audited publicly available financial
statements] incorporated by reference in the registration statement and
prospectus, and agreed the amounts contained therein with the Company's
accounting records as of [insert either: March 31, March 31 and June 30,
or March 31, June 30 and September 30], [insert year subsequent to; and
year of latest, audited, publicly available financial statements], and
for the [insert either: three month, three and six month or three, six
and nine month] periods then ended.
(b) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the unaudited
consolidated financial statements referred to in (a): (1) are in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
financial statements incorporated by reference in the registration
statement and prospectus, and (2) comply in form in all material respects
with the applicable accounting requirements of the Securities Exchange
Act of 1934 and the related published rules and regulations. Those
officials stated that the unaudited consolidated financial statements (1)
are in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited financial
statements, and (2) comply in
- - ------------------------
* Paragraph to be adjusted depending on date of letter.
I-2
<PAGE>
form in all material respects with the applicable accounting requirements
of the Securities Exchange Act of 1934 and the related published rules
and regulations.
The foregoing procedures do not constitute an audit conducted in
accordance with generally accepted auditing standards. We make no
representations regarding the sufficiency of the foregoing procedures for
your purposes. Had we performed additional procedures or had we conducted an
audit or a review, other matters might have come to our attention that would
have been reported to you.
5. Company officials have advised us that no financial statements as of
any date or for any period subsequent to [insert either: March 31, June 30
or September 30], [insert year subsequent to year of latest, audited,
publicly available financial statements], are available; accordingly, the
procedures carried out by us with respect to changes in financial statement
items after [insert date of latest 10-Q filed with the SEC] have, of
necessity, been even more limited than those with respect to the periods
referred to in 4(a). We have made inquiries of certain Company officials who
have responsibility for financial and accounting matters regarding whether
there was at [insert date five business days prior to Closing], as compared
with amounts shown on the [insert date of latest 10-Q filed with the SEC]
unaudited consolidated balance sheet incorporated by reference in the
registration statement and prospectus:
(a) any change in excess of ten percent in consolidated total debt
(including capital lease obligations) with the exception of changes due
to foreign currency translation effects, scheduled debt repayments,
amortization of debt discount and conversions of subsidiary companies'
convertible debentures into common stock of Texaco Inc. [set forth any
other applicable exceptions]; or
(b) any change in excess of ten percent in capital stock of Texaco
Inc. with the exception of changes due to treasury stock transactions and
conversions of subsidiary companies' convertible debentures into common
stock of Texaco Inc. [set forth any other applicable exceptions]; or
(c) any decrease in total stockholders' equity with the exception of
changes due to treasury stock transactions and declaration of dividends
on capital stock [set forth any other applicable exceptions].
On the basis of these inquiries and of our reading of the minutes as
described in 4, nothing came to our attention that caused us to believe
that there were any such changes or decreases, except in all instances
for changes or decreases that the registration statement and prospectus
disclose have occurred or may occur.
6. We inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether the
information included under the heading "Ratio of earnings to fixed charges
of Texaco on a total enterprise basis (unaudited)" conforms in all material
respects with the requirements of item 503(d) of Regulation S-K. These
officials stated, in response to our inquiries, that this information
conforms in all material respects with the disclosure requirements of item
503(d) of Regulation S-K.
7. Our audit of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter comprised audit
tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For neither the
periods referred to therein nor any other period did we perform audit tests
for the purpose of expressing an opinion on individual balances of accounts
or summaries of selected transactions and, accordingly, we express no
opinion thereon.
8. It should be understood that we made no representations regarding
questions of legal interpretation or regarding the sufficiency for your
purposes of the procedures enumerated in the preceding paragraphs; also,
such procedures would not necessarily reveal any material misstatement
I-3
<PAGE>
of the amounts or ratios listed above. Further, we have addressed ourselves
solely to the foregoing data as set forth in the registration statement and
prospectus and make no representations as to the adequacy of disclosures or
as to whether any material facts have been omitted.
9. This letter is solely for the information of the addresses and to
assist the Underwriters in conducting and documenting their investigation of
the affairs of the Company in connection with the offering of the securities
covered by the registration statement and prospectus, and it is not to be
used, circulated, quoted, or otherwise referred to within or without the
underwriting group for any other purpose, including but not limited to the
registration, purchase, or sale of securities, nor is it to be filed with or
referred to in whole or in part in the registration statement and prospectus
or any other document, except that reference may be made to it in the
Underwriting Agreement or in any list of closing documents pertaining to the
offering of the securities covered by the registration statement and
prospectus.
Very truly yours,
I-4
<PAGE>
EXHIBIT 5
February 18, 1998
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Texaco Capital Inc.
1013 Centre Road
Wilmington, DE 19801
Gentlemen:
I have acted as counsel for Texaco Inc. ("Texaco") and Texaco Capital Inc.
(the "Company") in connection with the proposed issuance and sale by the Company
of up to $1,250,000,000 of the Company's Guaranteed Debt Securities or Warrants,
the guarantees of such Debt Securities by Texaco, and Texaco's Debt Securities,
Common Stock, Preferred Stock, Depository Shares or Warrants (collectively, "the
Securities").
I have participated in the preparation of the Registration Statement on Form
S-3 with respect to said Securities to be filed with the Securities and Exchange
Commission, the Indenture and the Underwriting Agreement Standard Provisions
filed as Exhibits to said Registration Statement or incorporated therein by
reference.
Based on the foregoing, I am of the opinion that both Texaco and the Company
have been duly incorporated and are validly existing and in good standing under
the laws of the State of Delaware. I am further of the opinion that, when the
Indenture and Warrant Agreement shall have been executed and delivered by the
Company and any of the Securities shall have been executed by the Company or
Texaco and authenticated by the Trustee, all in accordance with the terms of the
Indenture, and sold, said Securities will be legally issued and binding
obligations of Texaco and/or the Company as issuer of any of such Securities.
I hereby consent to the reference to me and to the use of my name under the
caption "Legal Opinions" and to the filing of a copy of this opinion as an
exhibit to said Registration Statement.
Very truly yours,
Paul R. Lovejoy
PRL:jcr
<PAGE>
EXHIBIT 12.2
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS OF TEXACO ON A TOTAL ENTERPRISE BASIS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND FOR
EACH OF THE FIVE YEARS ENDED DECEMBER 31, 1996
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------------------------------
1997 1996 1995 1994(A) 1993(A) 1992(A)
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations, before provision or
benefit for income taxes and cumulative effect of
accounting changes effective 1-1-92 and 1-1-95........... $ 2,600 $ 3,450 $ 1,201 $ 1,409 $ 1,392 $ 1,707
Dividends from less than 50% owned companies more or (less)
than equity in net income................................ (9) (4) 1 (1) (8) (9)
Minority interest in net income............................ 54 72 54 44 17 18
Previously capitalized interest charged to income during
the period............................................... 28 27 33 29 33 30
------ --------- --------- --------- --------- ---------
Total earnings............................................. 2,673 3,545 1,289 1,481 1,434 1,746
------ --------- --------- --------- --------- ---------
Fixed charges and preferred stock dividends: Items charged
to income:
Interest charges....................................... 397 551 614 594 546 551
Interest factor attributable to operating lease
rentals.............................................. 97 129 110 118 91 94
Preferred stock dividends of subsidiaries guaranteed by
Texaco Inc............................................... 26 35 36 31 4 --
------ --------- --------- --------- --------- ---------
Total items charged to income...................... 520 715 760 743 641 645
Interest capitalized....................................... 16 16 28 21 57 109
Interest on ESOP debt guaranteed by Texaco Inc............. 5 10 14 14 14 18
Preferred stock dividends (b).............................. 32 54 51 85 82 96
------ --------- --------- --------- --------- ---------
Total combined fixed charges and preferred stock
dividends................................................ 573 795 853 863 794 868
Earnings available for payment of combined fixed charges
and preferred stock dividends
(Total earnings and total items charged to income)....... $ 3,193 $ 4,260 $ 2,049 $ 2,224 $ 2,075 $ 2,391
------ --------- --------- --------- --------- ---------
------ --------- --------- --------- --------- ---------
Ratio of earnings to combined fixed charges and preferred
stock dividends of Texaco on a total enterprise basis.... 5.57 5.36 2.40 2.58 2.61 2.75
------ --------- --------- --------- --------- ---------
------ --------- --------- --------- --------- ---------
</TABLE>
- - ------------------------
(a) Excludes discontinued operations.
(b) Preferred stock dividend requirements have been adjusted to reflect the
pre-tax earnings which would be required to cover the Series C Variable Rate
Cumulative Preferred Stock (redeemed on September 30, 1994), Series E
Variable Rate Cumulative Preferred Stock (exchanged for Common Stock on
November 8, 1994) and Market Auction Preferred Shares dividends and to
exclude the interest portion of the Series B and Series F ESOP Convertible
Preferred Stock dividends.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated
February 27, 1997 incorporated by reference in Texaco Inc.'s Form 10-K for the
year ended December 31, 1996 and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
New York, New York
February 18, 1997
<PAGE>
EXHIBIT 24.2 (A)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director and
Treasurer of TEXACO CAPITAL INC., a Delaware corporation (the "Company"), hereby
makes, designates, constitutes and appoints Carl B. Davidson and Robert E. Koch,
and each of them, (with full power to act without the other), as his true and
lawful attorneys-in-fact and agents, with full power and authority to act in any
and all capacities for and in the name, place and stead of the undersigned in
connection with the filing of any and all registration statements and all
amendments and post-effective amendments thereto (collectively, "Registration
Statements") under the Securities Act of 1933, as amended, with the Securities
and Exchange Commission, and any and all registrations, qualifications or
notifications under the applicable securities laws of any and all states and
other jurisdictions, with respect to the securities of the Company, of whatever
class, including without limitation thereon the Company's Common Stock, notes,
debentures, bonds, and warrants, however offered, sold, issued, distributed,
placed or resold by the Company, by any of its subsidiary companies, or by any
other person or entity that may be required to effect: (a) any such filing, (b)
any primary or secondary offering, sale, distribution, or conversion of the
Company's securities, or (c) any acquisition, merger, reorganization, or
consolidation involving the issuance of the Company's securities.
Without limiting the generality of the foregoing grant of authority, such
attorneys-in-fact and agents, or any of them, are hereby granted full power and
authority, on behalf of and in the name, place and stead of the undersigned, to
execute and deliver all such Registration Statements, and registrations,
qualifications or notifications, execute and deliver any and all such other
documents, and take such other and further action as such attorneys-in-fact and
agents, or either of them, deem necessary or appropriate. The powers and
authorities granted herein to such attorneys-in-fact and agents, and each of
them, also include the full right, power and authority to effect necessary or
appropriate substitutions or revocations. The undersigned hereby ratifies,
confirms, and adopts, as his own act and deed, all action lawfully taken
pursuant to the powers and authorities herein granted by such attorneys-in-fact
and agents, or either of them, or by their respective substitutes. This Power of
Attorney expires by its terms and shall be of no further force and effect on
December 31, 1998.
IN WITNESS WHEREOF, the undersigned has hereunto set his name and seal as of
the 18th day of February, 1998.
Robert C. Gordan
<PAGE>
EXHIBIT 24.2 (B)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Comptroller of TEXACO
CAPITAL INC., a Delaware corporation (the "Company"), hereby makes, designates,
constitutes and appoints Carl B. Davidson and Robert E. Koch, and each of them,
(with full power to act without the other), as his true and lawful
attorneys-in-fact and agents, with full power and authority to act in any and
all capacities for and in the name, place and stead of the undersigned in
connection with the filing of any and all registration statements and all
amendments and post-effective amendments thereto (collectively, "Registration
Statements") under the Securities Act of 1933, as amended, with the Securities
and Exchange Commission, and any and all registrations, qualifications or
notifications under the applicable securities laws of any and all states and
other jurisdictions, with respect to the securities of the Company, of whatever
class, including without limitation thereon the Company's Common Stock, notes,
debentures, bonds, and warrants however offered, sold, issued, distributed,
placed or resold by the Company, by any of its subsidiary companies, or by any
other person or entity that may be required to effect: (a) any such filing, (b)
any primary or secondary offering, sale, distribution, or conversion of the
Company's securities, or (c) any acquisition, merger, reorganization, or
consolidation involving the issuance of the Company's securities.
Without limiting the generality of the foregoing grant of authority, such
attorneys-in-fact and agents, or any of them, are hereby granted full power and
authority, on behalf of and in the name, place and stead of the undersigned, to
execute and deliver all such Registration Statements, and registrations,
qualifications or notifications, execute and deliver any and all such other
documents, and take such other and further action as such attorneys-in-fact and
agents, or either of them, deem necessary or appropriate. The powers and
authorities granted herein to such attorneys-in-fact and agents, and each of
them, also include the full right, power and authority to effect necessary or
appropriate substitutions or revocations. The undersigned hereby ratifies,
confirms, and adopts, as his own act and deed, all action lawfully taken
pursuant to the powers and authorities herein granted by such attorneys-in-fact
and agents, or either of them, or by their respective substitutes. This Power of
Attorney expires by its terms and shall be of no further force and effect on
December 31, 1998.
IN WITNESS WHEREOF, the undersigned has hereunto set his name and seal as of
the 18th day of February, 1998.
Robert C. Oelkers
<PAGE>
EXHIBIT 24.2(C)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director and
Chairman of the Board of TEXACO CAPITAL INC., a Delaware corporation (the
"Company"), hereby makes, designates, constitutes and appoints Carl B. Davidson
and Robert E. Koch, and each of them, (with full power to act without the
other), as his true and lawful attorneys-in-fact and agents, with full power and
authority to act in any and all capacities for and in the name, place and stead
of the undersigned in connection with the filing of any and all registration
statements and all amendments and post-effective amendments thereto
(collectively, "Registration Statements") under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission, and any and all
registrations, qualifications or notifications under the applicable securities
laws of any and all states and other jurisdictions, with respect to the
securities of the Company, of whatever class, including without limitation
thereon the Company's Common Stock, notes, debentures, bonds, and warrants
however offered, sold, issued, distributed, placed or resold by the Company, by
any of its subsidiary companies, or by any other person or entity that may be
required to effect: (a) any such filing, (b) any primary or secondary offering,
sale, distribution, or conversion of the Company's securities, or (c) any
acquisition, merger, reorganization, or consolidation involving the issuance of
the Company's securities.
Without limiting the generality of the foregoing grant of authority, such
attorneys-in-fact and agents, or any of them, are hereby granted full power and
authority, on behalf of and in the name, place and stead of the undersigned, to
execute and deliver all such Registration Statements, and registrations,
qualifications or notifications, execute and deliver any and all such other
documents, and take such other and further action as such attorneys-in-fact and
agents, or either of them, deem necessary or appropriate. The powers and
authorities granted herein to such attorneys-in-fact and agents, and each of
them, also include the full right, power and authority to effect necessary or
appropriate substitutions or revocations. The undersigned hereby ratifies,
confirms, and adopts, as his own act and deed, all action lawfully taken
pursuant to the powers and authorities herein granted by such attorneys-in-fact
and agents, or either of them, or by their respective substitutes. This Power of
Attorney expires by its terms and shall be of no further force and effect on
December 31, 1998.
IN WITNESS WHEREOF, the undersigned has hereunto set his name and seal as of
the 18th day of February, 1998.
James F. Link
<PAGE>
EXHIBIT 24.2(D)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director of TEXACO
CAPITAL INC., a Delaware corporation (the "Company"), hereby makes, designates,
constitutes and appoints Carl B. Davidson and Robert E. Koch, and each of them,
(with full power to act without the other), as his true and lawful
attorneys-in-fact and agents, with full power and authority to act in any and
all capacities for and in the name, place and stead of the undersigned in
connection with the filing of any and all registration statements and all
amendments and post-effective amendments thereto (collectively, "Registration
Statements") under the Securities Act of 1933, as amended, with the Securities
and Exchange Commission, and any and all registrations, qualifications or
notifications under the applicable securities laws of any and all states and
other jurisdictions, with respect to the securities of the Company, of whatever
class, including without limitation thereon the Company's Common Stock, notes,
debentures, bonds, and warrants however offered, sold, issued, distributed,
placed or resold by the Company, by any of its subsidiary companies, or by any
other person or entity that may be required to effect: (a) any such filing, (b)
any primary or secondary offering, sale, distribution, or conversion of the
Company's securities, or (c) any acquisition, merger, reorganization, or
consolidation involving the issuance of the Company's securities.
Without limiting the generality of the foregoing grant of authority, such
attorneys-in-fact and agents, or any of them, are hereby granted full power and
authority, on behalf of and in the name, place and stead of the undersigned, to
execute and deliver all such Registration Statements, and registrations,
qualifications or notifications, execute and deliver any and all such other
documents, and take such other and further action as such attorneys-in-fact and
agents, or either of them, deem necessary or appropriate. The powers and
authorities granted herein to such attorneys-in-fact and agents, and each of
them, also include the full right, power and authority to effect necessary or
appropriate substitutions or revocations. The undersigned hereby ratifies,
confirms, and adopts, as his own act and deed, all action lawfully taken
pursuant to the powers and authorities herein granted by such attorneys-in-fact
and agents, or either of them, or by their respective substitutes. This Power of
Attorney expires by its terms and shall be of no further force and effect on
December 31, 1998.
IN WITNESS WHEREOF, the undersigned has hereunto set his name and seal as of
the 18th day of February, 1998.
Peter M. Wissel
