EXHIBIT 1.2
TEXACO INC. TEXACO CAPITAL INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DISTRIBUTION AGREEMENT
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SERIES 1998 MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
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February 00, 1998
To: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Partners, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Suisse First Boston Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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.
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
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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
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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
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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;
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(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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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;
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(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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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
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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.
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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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
with a copy to Texaco, and, if sent to Texaco, will be mailed, delivered or
telecopied and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, with a copy to the Company.
9
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,
TEXACO CAPITAL INC.
By
TEXACO INC.
By
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof
By:
-----------------------------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By:
-----------------------------------------
▇▇▇▇▇▇▇▇ & Partners, L.P.
By:
-----------------------------------------
Credit Suisse First Boston Corporation
By:
-----------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
By:
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
-----------------------------------------
Salomon Brothers Inc
10
SCHEDULE 1
TO DISTRIBUTION AGREEMENT
DATED FEBRUARY , 1998
TEXACO CAPITAL INC.
SERIES 1998 MEDIUM-TERM NOTE FEE SCHEDULE
MATURITY COMMISSION
-------------------------------------- -----------
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%
11
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
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")).
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
B-1
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.
B-2
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,
B-3
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.
B-4
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
B-5
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.
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.
B-6
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.
▇. ▇▇▇▇▇ 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).
▇. ▇▇▇▇▇ will complete and authenticate the Global Security representing
such Note.
E. DTC will credit such Note to Chase's participant account at DTC.
B-7
▇. ▇▇▇▇▇ 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.
▇. ▇▇▇▇▇ 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.
B-8
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:
SETTLEMENT
PROCEDURE TIME
---------- --------------------------------------
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
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 ▇▇▇▇ 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
B-9
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.
PART II:
ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Chase will serve as Registrar in connection with the Certificated Notes.
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.
B-10
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
B-11
Date, the first interest payment will be made on the Interest
Payment Date following the next succeeding Record Date.
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
B-12
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,
B-13
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.
▇. ▇▇▇▇▇ 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
B-14
in immediately payable funds. The Agent will obtain the acknowledge-
ment of receipt of such Note by retaining Stub Two.
▇. ▇▇▇▇▇ 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:
SETTLEMENT
PROCEDURE TIME
---------- ----------------------------------------------
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
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
▇▇▇▇ 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.
B-15
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
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) 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.
Registered Registered
No. [$]
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 / /
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:
C-1
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:
Denominated Currency: Face Amount:
Indexed Currency: Base Exchange Rate:
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.
Dated:
Authenticated:
THE CHASE MANHATTAN BANK
as Trustee TEXACO CAPITAL INC.
By (SEAL) By
AUTHORIZED OFFICER VICE PRESIDENT
By
VICE PRESIDENT
C-2
(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
C-3
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:
D X 360
Money Market Yield = X 100
360 - (D X M)
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 ▇▇▇▇▇ 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
▇▇▇▇▇ 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"), ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
C-11
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
C-12
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
C-13
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
C-14
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 ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to: Treasurer, Texaco Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
C-15
ASSIGNMENT
I or we assign and transfer this Note to
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(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 ___________________________________
C-16
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: _______________________________________
C-17
EXHIBIT D
TO
DISTRIBUTION AGREEMENT
FORM OF
OPINION OF ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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.
D-1
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
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
EXHIBIT E
TO
DISTRIBUTION AGREEMENT
FORM OF
OPINION OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
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
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 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ 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
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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
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
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
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
EXHIBIT I
TO
DISTRIBUTION AGREEMENT
LETTER OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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
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
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
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,
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