EXHIBIT 4.1(B)
SECOND SUPPLEMENT TO THE FIRST SUPPLEMENTAL INDENTURE, dated as of
August 5, 1997, among TEXACO CAPITAL INC., a Delaware corporation (the
"Company"), TEXACO INC., a Delaware corporation (the "Guarantor"), and THE CHASE
MANHATTAN BANK, as Trustee (the "Trustee").
RECITALS
The Company, the Guarantor and the Trustee are parties to a First
Supplemental Indenture dated as of January 31, 1990, supplementing and restating
an Indenture dated as of August 24, 1984, (the "Supplemental Indenture"),
relating to the issuance from time to time by the Company of its Debt Securities
guaranteed by the Guarantor on terms to be specified at the time of issuance.
The Company, the Guarantor and the Trustee entered into a First
Supplement to the Supplemental Indenture on October 11, 1990.
The Company and the Guarantor have requested the Trustee to join with
it in the execution and delivery of this Second Supplement to the Supplemental
Indenture solely in order to establish the terms of a Series of Securities to be
designated "3.50% Guaranteed Cash-Settled Convertible Notes Due 2004".
Section 2.02 of the Supplemental Indenture provides that the terms of a
Series of Securities may be established by an indenture supplemental thereto.
Section 9.01(3) of the Supplemental Indenture provides that an
indenture supplemental thereto may be entered into by the Company, the Guarantor
and the Trustee, without the consent of any Holders of Securities, to amend the
Supplemental Indenture to the extent necessary to make any change that does not
adversely affect the rights of any Securityholder.
The Company and the Guarantor have determined that this Second
Supplement to the Supplemental Indenture complies with said Section 9.01 and
does not require the consent of any Securityholder. On the basis of the
foregoing, the Trustee has determined that this Second Supplement to the
Supplemental Indenture is in form satisfactory to it.
All things necessary to make this Second Supplement to the Supplemental
Indenture a valid agreement of the Company, the Guarantor and the Trustee and a
valid supplement to the Supplemental Indenture have been done.
(NY) /dpw/cw/031/06216/029/FORM/inden.supp.wpd
Each party agrees as follows for the benefit of the other parties
hereto and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
Capitalized terms herein, not otherwise defined, shall have the same
meanings given them in the Supplemental Indenture.
"Agency Agreement" means the Agency Agreement of even date herewith
among the Company, the Guarantor, the Trustee, the Principal Paying Agent, the
Principal Conversion Agent, the Paying Agent in Luxembourg, the Conversion Agent
in Luxembourg and the Calculation Agent.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York, the
City of London or Luxembourg are authorized or obligated by law or executive
order to close.
"Conversion Amount" shall have the meaning specified in the Notes.
"Conversion Date" shall have the meaning specified in the Notes.
"CSFP" means Credit Suisse Financial Products.
"Exchange Date" shall have the meaning specified in paragraph 6 the
Temporary Global Note.
"Holder" or "Securityholder" of any Note or Coupon shall mean, for
purposes hereof and, solely with respect to the Notes, for purposes of the
Supplemental Indenture, the bearer thereof.
"Interest Payment Date" shall have the meaning specified in the Notes.
"Legal Holiday" means, for purposes of the Supplemental Indenture,
solely with respect to the Notes, any day that is not a Business Day.
"Non-U.S. Paying Agent" means the Principal Paying Agent and any other
Paying Agent for the Notes outside the United States.
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SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Calculation Agent" 5.04
"Cedel Bank" 3.02
"Common Depositary" 3.02
"Conversion Agent" 5.01
"Coupon" 3.04
"Definitive Note" 3.04
"Euroclear Operator" 3.02
"Exchange Request" 3.04
"Notes" 2.01
"Permanent Global Note" 3.03
"Principal Conversion Agent" 5.01
"Principal Paying Agent" 4.01
"Temporary Global Note" 3.02
"United States" 3.06
ARTICLE 2
ESTABLISHMENT OF TERMS OF NOTES
SECTION 2.01. Establishment of Terms of Notes.
Pursuant to Section 2.02 of the Supplemental Indenture, there is hereby
established a Series of Securities designated the "3.50% Guaranteed Cash-Settled
Convertible Notes Due 2004" (the "Notes") with the terms set forth herein and in
the Notes. The Notes are limited to an aggregate principal amount of
U.S.$200,000,000. The terms set forth herein to establish the Notes shall not
affect any other series of Securities issued under the Supplemental Indenture
and the Supplemental Indenture shall remain in full force and effect and, except
as otherwise expressly provided herein, shall govern the terms of the Notes.
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ARTICLE 3
FORM, DENOMINATION, TRANSFER AND EXCHANGE
SECTION 3.01. Form and Denomination; Transfer.
Except as provided herein, the Notes shall be issued in bearer form,
serially numbered, in denominations of U.S.$10,000. Title to the Notes and
Coupons will be transferable by delivery. Except as provided herein, the Company
and any Agent may deem and treat the bearer of any Note or Coupon as the
absolute owner thereof (whether or not overdue and notwithstanding any notice of
ownership or writing thereon or notice of any previous loss or theft thereof)
for all purposes.
SECTION 3.02. Initial Form and Delivery.
The Notes shall be initially issued in temporary global bearer form,
without interest coupons, in substantially the same form as set forth in Exhibit
A-1 hereto (the "Temporary Global Note"). The Temporary Global Note shall be
delivered to the Brussels office of a common depositary (the "Common
Depositary") for the benefit of Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System (the "Euroclear Operator"),
and Cedel Bank, societe anonyme ("Cedel Bank"), for credit to the account
designated by or on behalf of the initial subscriber thereof.
SECTION 3.03. Exchange of Temporary Global Note for Permanent
Global Note.
An interest in the Temporary Global Note shall be exchanged for an
interest in a Note in permanent global bearer form, without interest coupons, in
substantially the same form as set forth in Exhibit A-2 hereto (the "Permanent
Global Note"), on or after the Exchange Date, upon the occurrence of each of the
following events:
(i) the account holder having beneficial ownership of such
interest instructs the Euroclear Operator or Cedel Bank, as the case
may be, to request such exchange on its behalf and delivers to the
Euroclear Operator or Cedel Bank, as the case may be, a certificate in
the form set forth in Exhibit 1 to the Temporary Global Note, dated no
earlier than 10 days prior to the Exchange Date, copies of which
completed certificate shall be made available by the Euroclear Operator
or Cedel Bank, as the case may be, to the Principal Paying Agent, which
will make such certificate available to the Trustee; and
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(ii) on or after the Exchange Date, the Common Depositary
surrenders the Temporary Global Note to the Principal Paying Agent to
be exchanged, in whole or from time to time in part, for an interest in
the Permanent Global Note; provided, however, that, upon such
presentation by the Common Depositary, the Temporary Global Note shall
be accompanied by (i) a certificate dated on or after the Exchange Date
and signed by the Euroclear Operator as to the portion of the Temporary
Global Note held for its account then to be exchanged and (ii) a
certificate dated on or after the Exchange Date and signed by Cedel
Bank as to the portion of the Temporary Global Note held for its
account then to be exchanged, each in the form set forth in Exhibit 2
to the Temporary Global Note.
Without unnecessary delay but, in any event, not later than the Exchange Date,
the Company shall deliver to the Principal Paying Agent the Permanent Global
Note. Upon the first occurrence of the events specified in paragraphs (i) and
(ii) above, the Principal Paying Agent shall authenticate and deliver to the
Common Depositary, in exchange for the portion of the Temporary Global Note
being surrendered, the Permanent Global Note, in a principal amount equal to the
aggregate principal amount of the Temporary Global Note so surrendered. The
Principal Paying Agent shall endorse the Temporary Global Note to reflect a
reduction in the principal amount equal to the principal amount thereupon
represented by the Permanent Global Note and shall, after such endorsement,
redeliver the Temporary Global Note to the Common Depositary. Upon any
subsequent occurrence of the events specified in paragraph (i) and (ii) above,
and upon surrender to the Principal Paying Agent of the Temporary Global Note to
be exchanged and the Permanent Global Note, the Principal Paying Agent shall
endorse the Temporary Global Note to reflect a reduction in the principal amount
equal to the portion to be exchanged, and the Principal Paying Agent shall
endorse the Permanent Global Note so as to increase the principal amount thereof
by an amount equal to the portion being exchanged and shall thereupon redeliver
the Permanent Global Note and the Temporary Global Note to the Common
Depositary. At such time as the principal amount of the Temporary Global Note
shall have been reduced to zero, the Trustee shall cancel the Temporary Global
Note in accordance with Section 2.15 of the Supplemental Indenture. In each of
the foregoing cases, the Euroclear Operator or Cedel Bank, as the case may be,
shall then credit the portion of the Permanent Global Note being exchanged to
the respective accounts of the beneficial owners of the portion of the Temporary
Global Note so surrendered (or to such other accounts as such beneficial owners
may direct).
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SECTION 3.04. Exchange of Permanent Global Note for Definitive Notes.
The beneficial owner of an interest in the Permanent Global Note is
entitled to exchange such interest for Notes in definitive bearer form, serially
numbered, with interest coupons ("Coupons") attached, substantially in the form
set forth in Exhibit A-3 hereto ("Definitive Notes"), in denominations of
U.S. $10,000 and in an aggregate principal amount equal to the amount of such
beneficial interest, upon the occurrence of the following events:
(i) the account holder having beneficial ownership of such
interest instructs the Euroclear Operator or Cedel Bank, as the case
may be, to request such exchange on its behalf and delivers to any
Non-U.S. Paying Agent (which Non-U.S. Paying Agent shall deliver such
request to the Trustee and the Company), through the Euroclear Operator
or Cedel Bank, as the case may be, at least 30 days' written notice of
such exchange, which notice specifies the number of Definitive Notes
into which such interest shall be exchanged (each an "Exchange
Request"); and
(ii) on or after the earliest date on which such interests may
be exchanged, the Common Depositary surrenders the Permanent Global
Note to the Principal Paying Agent to be exchanged in whole for
Definitive Notes.
All (but not less than all) interests in the Permanent Global Note
shall be so exchanged for one or more Definitive Notes (i) upon receipt by the
Company of a copy of an Exchange Request from the first beneficial owner of an
interest in the Permanent Global Note to make such an Exchange Request or (ii)
upon receipt by the Principal Paying Agent and the Trustee of a notice from the
Company stating that (x) the Permanent Global Note has been accelerated
following an Event of Default or (y) the Euroclear Operator or Cedel Bank has
been closed for business for a continuous period of fourteen days (other than by
reason of public holidays) or has announced its intention to cease business
permanently or in fact has done so. The Company shall, promptly upon delivery of
any such notice to the Principal Paying Agent and the Trustee, cause the Common
Depositary (i) to instruct the Principal Paying Agent and the Company regarding
the aggregate principal amount of Definitive Notes that must be authenticated
and delivered to each relevant clearing system in exchange for the Permanent
Global Note and (ii) to surrender the Permanent Global Note to the Principal
Paying Agent to be exchanged in whole for Definitive Notes.
As soon as practicable after either (i) receiving a copy of an Exchange
Request from a Non-U.S. Paying Agent or (ii) delivering to the Principal Paying
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Agent and the Trustee such a notice of acceleration of the Permanent Global Note
or of closure of a relevant clearing system, the Company shall deliver to the
Principal Paying Agent Definitive Notes in authorized denominations equal in
aggregate principal amount to the principal amount of the Permanent Global Note.
Upon receiving an Exchange Notice or such a notice from the Company and the
Permanent Global Note from the Common Depositary, the Principal Paying Agent
shall authenticate and deliver to the Euroclear Operator or Cedel Bank, as the
case may be, in exchange for each portion of the Permanent Global Note, such
Definitive Notes. The Euroclear Operator or Cedel Bank, as the case may be,
shall then deliver such Definitive Notes (A) in the case of an exchange
initiated by an Exchange Request, (x) to the beneficial owner (or to such person
as the beneficial owner may direct) of the portion of the Permanent Global Note
with respect to which the Exchange Request was submitted and (y) to the
Euroclear Operator and Cedel Bank, as the case may be, for the account of the
beneficial owners of all remaining interests in the Permanent Global Note in
accordance with their interests, or (B) in the case of an exchange following a
notice of acceleration of the Permanent Global Note or of closure of a relevant
clearing system, to the beneficial owners of all the interests in the Permanent
Global Note in accordance with their interests.
SECTION 3.05. No Exchange in Certain Circumstances.
None of the Company, the Trustee and any Non-U.S. Paying Agent will be
required to exchange Notes to be redeemed during the period of 15 calendar days
preceding the first publication of notice of redemption.
SECTION 3.06. No Delivery into the United States.
No Definitive Note or Coupon delivered in exchange for a portion of the
Permanent Global Note shall be mailed or otherwise delivered to any location in
the United States. The term "United States" means the United States of America
(including the States and the District of Columbia) and its "possessions", which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
SECTION 3.07. Principal Paying Agent Shall be Authenticating Agent.
The Principal Paying Agent shall be an Authenticating Agent.
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ARTICLE 4
PAYMENTS OF PRINCIPAL AND INTEREST
SECTION 4.01. Appointment of Paying Agents.
The Company initially appoints the Trustee, at its office in London at
Trinity Tower, 9 Thomas More Street, London E19YT, England, as the principal
Paying Agent for the Notes outside the United States (the "Principal Paying
Agent"). The Company initially appoints Chase Manhattan Bank Luxembourg S.A., at
its office in Luxembourg at 5 rue Plaetis, L-2338 Luxembourg, Luxembourg, as a
Paying Agent in Luxembourg. So long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Company shall
maintain a Paying Agent in Luxembourg.
SECTION 4.02. Payments on Global Notes.
Principal and interest payable on the Temporary Global Note or the
Permanent Global Note shall be payable to the Euroclear Operator and Cedel Bank
for credit to the respective accounts of the beneficial owners of the Temporary
Global Note or the Permanent Global Note, as the case may be, provided, however,
that in the case of the Temporary Global Note, (a) payment of such principal and
interest to the Euroclear Operator or Cedel Bank, as the case may be, is
conditioned upon the delivery by the Euroclear Operator or Cedel Bank, as the
case may be, to the Principal Paying Agent of a certificate or certificates
substantially in the form set forth in Exhibit 2 to the Temporary Global Note
and (b) credit of the applicable portion of such principal and interest to the
account of a beneficial owner of the Temporary Global Note is conditioned upon
the delivery by such beneficial owner to the Euroclear Operator or Cedel Bank,
as the case may be, of a certificate dated no earlier than the applicable
payment date, in the form set forth in Exhibit 1 to the Temporary Global Note.
Notwithstanding anything to the contrary herein contained, the certifications
made pursuant to this Section shall satisfy the certification requirements of
Section 3.03 hereof and the interests of the beneficial owners of the Temporary
Global Note with respect to which such certification was made will be exchanged,
without further act or deed by such beneficial owners, for interests in the
Permanent Global Note on the Exchange Date or the date of certification if such
date occurs after the Exchange Date. Except as otherwise provided in this
Section, no payments of principal or interest owing with respect to a beneficial
interest in the Temporary Global Note will be made to the beneficial owner
thereof unless and until such interest shall have been exchanged for an interest
in the Permanent Global Note. Any principal or interest received by the
Euroclear Operator and Cedel Bank in respect of the Temporary Global Note or the
Permanent Global
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Note and not paid as herein provided shall be returned to the
Trustee prior to the expiration of two years after the date of such payment in
order to be repaid to the Company in accordance with Section 8.03 of the
Supplemental Indenture.
SECTION 4.03. Payments on Definitive Notes.
Payment of principal and interest on a Definitive Note will be made in
immediately available funds, subject to any applicable laws and regulations,
only against presentation and surrender of such Definitive Note or the relevant
Coupon, as the case may be, at the office outside the United States of any
Non-U.S. Paying Agent by check or, at the option of the Holder, by wire transfer
of immediately available funds to an account maintained by the payee with a bank
located outside the United States if appropriate wire transfer instructions have
been received by such Non-U.S. Paying Agent not less than 15 calendar days prior
to an applicable payment date.
SECTION 4.04. No Service Charge.
No service charge shall be made for any exchange of Notes, except that
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
ARTICLE 5
CONVERSION AND REDEMPTION
SECTION 5.01. Appointment of Conversion Agents.
The Company initially appoints the Trustee, at its office in London at
Trinity Tower, 9 Thomas More Street, London E19YT, England, as a conversion
agent (a "Conversion Agent") and the principal Conversion Agent for the Notes
outside the United States (the "Principal Conversion Agent"). The Company
initially appoints Chase Manhattan Bank Luxembourg S.A., at its office in
Luxembourg at 5 rue Plaetis, L-2338 Luxembourg, Luxembourg, as a Conversion
Agent in Luxembourg. Each Conversion Agent shall be deemed a Paying Agent for
purposes of the Supplemental Indenture solely as it relates to the Notes. So
long as the Notes are listed on the Luxembourg Stock Exchange and the rules of
such exchange so require, the Company shall maintain a Conversion Agent in
Luxembourg.
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SECTION 5.02. Conversion.
The Notes shall be convertible into cash as provided therein.
Each Conversion Agent shall accept, on or before 5:00 P.M., London
time, on any Business Day at its specified office, delivery of Conversion
Notices and any Notes (including unmatured Coupons relating thereto) being
surrendered for conversion, and will provide the person delivering any such
Notes with a receipt therefor, and, in the event that an Interest Payment Date
will fall on the next Business Day following delivery of such Conversion Notice
and such Notes, a separate receipt representing the Coupon that would be
redeemable on such Interest Payment Date. Any Conversion Notice delivered to a
Conversion Agent after 5:00 P.M., London time, on any Business Day shall be
deemed to have been delivered on the immediately succeeding Business Day. Each
Conversion Agent other than the Principal Conversion Agent shall, immediately
upon receipt of a Conversion Notice delivered to it as aforesaid (and in any
event not later than 5:00 P.M., London time, on the Business Day delivered to
it), send a copy of such Conversion Notice and the Notes (including all
unmatured Coupons relating thereto) being surrendered for conversion by
facsimile to the Principal Conversion Agent.
In respect of all valid Conversion Notices received on any Business Day
(any determination as to whether a Conversion Notice is valid and has been
properly and completely delivered as provided in the Notes shall be made by (i)
the Principal Conversion Agent after consultation with the Euroclear Operator or
Cedel Bank, as the case may be, if the Notes are represented by the Permanent
Global Note or by Definitive Notes that are held by the Euroclear Operator or
Cedel Bank or (ii) the Principal Conversion Agent if the Notes are represented
by Definitive Notes not held by the Euroclear Operator or Cedel Bank, and shall,
in either of cases (i) or (ii), absent manifest error, be conclusive and binding
on the Company and the relevant Holder), the Principal Conversion Agent shall:
(i) prior to 4:30 P.M. (London time) on the Business Day
immediately following the day on which a Conversion Agent receives such
Conversion Notices, notify the Calculation Agent, the Company and, if
CSFP is no longer acting in its capacity as Calculation Agent
hereunder, CSFP by facsimile (which notification to the Calculation
Agent shall be preceded by oral notification) of the following
information with respect to the valid Conversion Notices received by it
on the relevant Business Day;
(1) the name of each Holder delivering a Conversion
Notice to each Conversion Agent;
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(2) the principal amount of Notes being converted by
each such Holder at each Conversion Agent and the aggregate
principal amount of all Notes being converted by all Holders
at each Conversion Agent; and
(3) the relevant Conversion Date;
(ii) confirm with the Euroclear Operator or Cedel Bank, if the
relevant Notes are represented by the Permanent Global Note or by
Definitive Notes held by the Euroclear Operator or Cedel Bank, the
principal amount of Notes to which a Conversion Notice relates and the
details of the account from which the Notes are to be debited;
(iii) arrange for the payment of the Conversion Amount in
accordance with the instructions contained in the Conversion Notice;
and
(iv) carry out such other acts as may be necessary to give
effect to the provisions of the Notes.
On the next Business Day following a Conversion Date, the Calculation
Agent shall provide written notice to the Company, the Trustee and the Principal
Conversion Agent of the Conversion Amount to be delivered to all the converting
Holders by each Conversion Agent and the related Settlement Date. Upon the
occurrence of an event requiring an adjustment to the calculation of the
Conversion Amount as set forth in the Notes, the Calculation Agent will promptly
notify the Company and the Principal Conversion Agent, which in turn will notify
the Holders, of such event and of the method of calculation to be used to make
any such adjustment. So long as the Notes are listed on the Luxembourg Stock
Exchange, the Calculation Agent will also notify the Luxembourg Stock Exchange
with respect to any such adjustment.
SECTION 5.03. Conversion Notices.
Each Conversion Agent shall make available, and promptly upon request
provide to any Holder, notices substantially in the form set forth in Exhibit B
hereto (or such other form as shall be provided by the Company with the approval
of the Principal Conversion Agent, which approval shall not be unreasonably
withheld or delayed), and at the same time notify such Holder of any additional
certifications or restrictions that may be notified to the Principal Conversion
Agent by the Company.
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SECTION 5.04. Calculation Agent.
The Company initially appoints CSFP as calculation agent (the
"Calculation Agent") with respect to the Notes. All determinations or
calculations made by the Calculation Agent shall be made without taking account
of the interests of the Holders and without liability on its part (other than as
provided in the Agency Agreement) and shall, in the absence of manifest error,
be conclusive for all purposes and binding on the Company, the Agents and the
Holders.
SECTION 5.05. Optional Redemption.
The Notes shall be redeemable at the option of the Company in the
manner set forth therein. Notwithstanding Section 3.03 of the Supplemental
Indenture, the Company may give notice of an optional redemption pursuant to
this Section at least 15 but not more than 30 days before the date fixed for
redemption.
SECTION 5.06. Tax Redemption; Withholding.
The Notes shall be redeemable upon the occurrence of certain events in
the manner set forth therein and in Article 3 of the Supplemental Indenture.
If the Company is, in respect of any payment in respect of the Notes,
compelled to withhold or deduct any amount for or on account of any taxes or to
pay additional amounts in respect thereof or elects to withhold or deduct any
amount for or on account of a backup withholding tax or similar charge or elects
to pay additional amounts in respect thereof, in either case as provided in the
Notes, the Company shall give notice to the Trustee and each Non-U.S. Paying
Agent (with a copy to the Calculation Agent) as soon as it makes such election
or becomes aware of the requirement to make the withholding or deduction or to
pay such additional amounts, as the case may be, and shall give to each of the
Trustee and each Non-U.S. Paying Agent such information as it shall require to
enable it to comply with the requirement.
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ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Notices.
Notices to Holders will be given by publication in a newspaper in the
English language of general circulation in the City of London or, if publication
in London is not practical, in an English language newspaper with general
circulation in Western Europe. Notwithstanding the foregoing, so long as the
Notes are represented by the Temporary Global Note or the Permanent Global Note
and such Note is held on behalf of the Euroclear Operator or Cedel Bank, any
such notice may, at the Company's option in lieu of such publication, be given
by delivery to the Euroclear Operator or Cedel Bank, as the case may be, in
which event such notice shall be deemed to have been given to the Holders on the
seventh business day in Brussels or Luxembourg, as the case may be, after the
day on which such notice is so delivered. So long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, notice to the Holders will also be published in English in a leading
newspaper having general circulation in Luxembourg, or, if such Luxembourg
publication is not practicable, in one other leading English language daily
newspaper with general circulation in Europe, such newspaper being published on
each Business Day in morning editions, whether or not it shall be published in
Saturday, Sunday or holiday editions. Except as set forth above, notices shall
be deemed to have been given on the date of publication as aforesaid or, if
published on different dates, on the date of the first such publication.
Notices to Cedel Bank shall be given to it at Cedel Bank, societe
anonyme, 67 Boulevard Grande-Duchesse Charlotte, Luxembourg-Ville, L-1010
Luxembourg, Attention: OCE Department, Telex: 2791.
Notices to the Euroclear Operator shall be given to it at Morgan
Guaranty Trust Company of New York (as operator of the Euroclear
System),Brussels office, Boulevard Emile Jacqmain 151, B-1210 Brussels, Belgium,
Attention: Custody Processing Department, Telex: 61025 MGTEC B.
Notices to the Principal Paying Agent and the Principal Conversion
Agent shall be given to it at The Chase Manhattan Bank, Trinity Tower, Thomas
More Street, London E19YT, England, Attention: Manager, Global Trust Operations,
Fax: 44 1202 34 7945, Telex: 8954681 CMBG.
Notices to the Paying Agent and the Conversion Agent in Luxembourg
shall be given to it at Chase Manhattan Bank Luxembourg S.A., 5 rue Plaetis, L-
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2338 Luxembourg, Luxembourg, Attention: Manager, Global Trust Operations, Fax:
352 4626 85380, Telex: 1233 CHASLU.
Notices to the Luxembourg Stock Exchange shall be given to it c/o
Banque Internationale a Luxembourg S.A., 69, route d'Esch, L-1470 Luxembourg,
Luxembourg, attention: Jacques Kinnen, Fax: 352 4590 4227.
Notices to the Calculation Agent (and in the event that CSFP is no
longer Calculation Agent, CSFP) shall be given to it c/o CSFP Capital, Inc.,
Eleven Madison Avenue, New York, N.Y. 10010, attention: Ricardo Harewood/
Sharmila Ruder, Fax: (212) 325-8174.
SECTION 6.02. Securityholder Lists.
The provisions of Section 2.09 of the Supplemental Indenture shall not
apply to the Notes.
SECTION 6.03. Collection Suit by Trustee; Trustee May File Proofs of
Claim.
All rights of action and of asserting claims under the Notes or any
Coupons or under the Supplemental Indenture, with respect to the Notes, may be
enforced by the Trustee without the possession of any of the Notes or Coupons or
the production thereof on any trial or other proceedings relative thereto.
SECTION 6.04. Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by the Notes or the Supplemental Indenture, with
respect to the Notes, to be given or taken by a specified percentage in
principal amount of the Securityholders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such specified
percentage of Securityholders in person or by agent duly appointed in writing
and, except as otherwise expressly provided in the Supplemental Indenture, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of the Supplemental
Indenture, with respect to the Notes, and (subject to Sections 7.01 and 7.02 of
the Supplemental Indenture) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
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SECTION 6.05. Proof of Execution of Instruments and of Holding of
Securities.
Subject to Sections 7.01 and 7.02 of the Supplemental Indenture, the
execution of any instrument by a Securityholder or its agent or proxy may be
proved in the following manner. The fact and date of the execution by any Holder
of any instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the person
executing the same. The fact of the holding by any Holder of a Note, and the
identifying number of such Note and the date of its holding the same, may be
proved by the production of such Note or by a certificate executed by any trust
company, bank, banker or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate shall be deemed by the Trustee
to be satisfactory. Each such certificate shall be dated and shall state that on
the date thereof a Note bearing a specified identifying number was deposited
with or exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in such certificate. Any such certificate may be
issued in respect of one or more Notes. The holding by the person named in any
such certificate of any Notes specified therein shall be presumed to continue
for a period of one year from the date of such certificate unless at the time of
any determination of such holding (i) another certificate bearing a later date
issued in respect of the same Notes shall be produced, (ii) the Notes specified
in such certificate shall be produced by some other person, or (iii) the Notes
specified in such certificate shall have ceased to be Outstanding. Subject to
Sections 7.01 and 7.02 of the Supplemental Indenture, the fact and date of the
execution of any such instrument and the amount and numbers of Notes held by the
person so executing such instrument and the amount and numbers of Notes may also
be proven in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in any other manner that the Trustee may deem
sufficient.
SECTION 6.06. [Reserved].
SECTION 6.07. Exhibits.
The Exhibits hereto shall be deemed a part of this Second Supplement to
the Supplemental Indenture.
15
SECTION 6.08. Duplicate Originals.
The parties may sign any number of copies of this Second Supplement to
the Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
(seal) TEXACO CAPITAL INC.
By: Peter M. Wissel
-------------------------
Title:
Attest:
Eric B. Silberstein
- ---------------------
Title: Attorney
(seal) TEXACO INC.
By: S. Faber
-------------------------
Title:
Attest:
Eric B. Silberstein
- ---------------------
Title: Attorney
(seal) THE CHASE MANHATTAN BANK,
as Trustee
By: R.J. Hollerin
-------------------------
Title: Second Vice President
Attest:
John T. Needham, Jr.
- ---------------------
Title: Trust Officer
EXHIBIT A-1
[FORM OF TEMPORARY GLOBAL NOTE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
TEXACO CAPITAL INC.
Temporary Global Note
representing
U.S.$200,000,000 3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Guaranteed by
TEXACO INC.
Interest Payable: August 5
Texaco Capital Inc. promises to pay to bearer, upon surrender hereof,
the principal sum specified in Schedule A hereto on August 5, 2004 (except to
the extent previously redeemed).
1. Interest.
Texaco Capital Inc. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Note from time to time specified
in Schedule A hereto at the rate per annum shown above. The Company will pay
interest annually on August 5 of each year. Interest on the Note will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from August 5, 1997. Except as provided in the Indenture, this Note
will
cease to bear interest from and after the earlier of (a) August 5, 2004 or
(b) the date fixed for redemption of this Note. If interest is required to be
calculated for a period of less than one year, it will be calculated on the
basis of a 360-day year consisting of 12 months of 30 days each.
2. Method of Payment.
Upon any payment of interest on this Note, the Principal Paying Agent
(as defined below) shall cause Schedule A of this Note to be endorsed to reflect
such payment. No payment on this Note will be made at any office or agency of
the Company in the United States (as defined below) or by check mailed to an
address in the United States or by wire transfer to an account maintained by the
Holder of this Note with a bank in the United States except as may be permitted
under United States federal tax laws and regulations then in effect without
adverse tax consequences to the Company. Notwithstanding the foregoing, in the
event that payment in U.S. dollars of the full amount payable on this Note at
the offices of all Non-U.S. Paying Agents (as defined below) would be illegal or
effectively precluded as a result of exchange controls or similar restrictions,
payment on this Note will be made by a Paying Agent in the Borough of Manhattan,
The City of New York, if and only if (i) such Paying Agent, under applicable law
and regulations, would be able to make such payment and (ii) such payment would
not involve, in the opinion of the Company, adverse tax consequences for the
Company. Notwithstanding any other provision of this Note, no payment of
principal or interest shall be made on any portion of this Note unless there
shall have been delivered to the Principal Paying Agent a certificate
substantially in the form of Exhibit 2 hereto with respect to the portion of
this Note with respect to which such principal or interest is to be paid. Such
certificate shall have been delivered to the Principal Paying Agent by Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System (the "Euroclear Operator"), or Cedel Bank, societe anonyme
("Cedel Bank") and shall be based on a certificate substantially in the form of
Exhibit 1 hereto provided to the Euroclear Operator or Cedel Bank, as the case
may be, by those of its account holders who are to receive such payment of
principal or interest. Owners of beneficial interests in this Note must look
solely to the Euroclear Operator or Cedel Bank, as the case may be, for their
share of each payment made to the bearer of this Note.
3. Paying Agents.
Initially, The Chase Manhattan Bank, as Trustee (the "Trustee"), at its
office in London at Trinity Tower, 9 Thomas More Street, London E19YT, England,
will act as the principal Paying Agent for the Notes outside the United States
(the "Principal Paying Agent"). Initially, Chase Manhattan Bank
A-1-2
Luxembourg S.A., at its office in Luxembourg at 5 rue Plaetis, L-2338
Luxembourg, Luxembourg, will act as a Paying Agent in Luxembourg. The Company
may appoint additional Paying Agents or change any Paying Agent without notice
to Holders (any such additional Paying Agent or other Paying Agent for the Notes
outside the United States, a "Non-U.S. Paying Agent").
4. Indenture.
The Company issued this Note as part of a Series of Securities,
designated as "3.50% Guaranteed Cash-Settled Convertible Notes Due 2004" (the
"Notes"), under an indenture dated as of August 24, 1984, as supplemented and
restated by the First Supplemental Indenture dated as of January 31, 1990, as
further amended by the First Supplement to the First Supplemental Indenture
dated as of October 11, 1990, and 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, Texaco Inc. and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 7aaa-77bbbb) as amended (the "Act"). This Note is subject to all such
terms, and the Holder of this Note is referred to the Indenture and the Act for
a statement of them. All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
5. Guaranty.
The Notes are guaranteed by Texaco Inc.
6. Exchange for Permanent Global Note.
This Note is exchangeable in whole or from time to time in part on or
after the Exchange Date (as defined below) for an interest (equal to the
principal amount of the portion of this Note being exchanged) in a single
permanent global note (the "Permanent Global Note") upon the request of the
Euroclear Operator or Cedel acting on behalf of the owner of a beneficial
interest in this Note, to the Principal Paying Agent upon delivery to the
Principal Paying Agent of a certificate substantially in the form of Exhibit 2
hereto with respect to the portion of this Note to be exchanged; provided that
the Company shall not be required to exchange this Note for a period of fifteen
calendar days preceding the first publication of a notice of redemption of the
Notes. Such certificate shall have been delivered to the Principal Paying Agent
by the Euroclear Operator or Cedel, as the case may be, and shall be based on a
certificate substantially in the form of
A-1-3
Exhibit 1 hereto provided to the Euroclear Operator or Cedel, as the case may
be, by those of its account holders having an interest in the portion hereof to
be exchanged. Notwithstanding the foregoing, if this Note is subject to a tax
redemption as described on the reverse of the Permanent Global Note, the form of
which is attached hereto, interests in this Note may be exchanged for interests
in the Permanent Global Note on and after such redemption date as if such
redemption date had been the Exchange Date, subject to receipt of the
certificates described in the preceding sentence. Upon exchange of any portion
of this Note for an interest in the Permanent Global Note, the Principal Paying
Agent shall cause Schedule A of this Note to be endorsed to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount being so exchanged. Except as otherwise provided herein, until exchanged
for the Permanent Global Note, this Note is governed by the terms and conditions
of the Permanent Global Note to be issued in exchange for this Note, which terms
and conditions are hereby incorporated by reference herein MUTATIS MUTANDIS and
shall be binding on the Company and the Holder hereof as if fully set forth
herein, and shall in all respects be entitled to the same benefits under the
Indenture as the Permanent Global Note duly authenticated and delivered.
Notwithstanding the foregoing, the provisions of paragraph 6 of the Permanent
Global Note shall not apply to this Note. The form of the Permanent Global Note
is attached hereto.
As used herein:
(a) the term "Exchange Date" means September 15, 1997,
PROVIDED that if an interest represented by this Note is held by Credit
Suisse First Boston (Europe) Limited, Swiss Bank Corporation, UBS
Limited or any other manager participating in the distribution of the
Notes as part of an unsold allotment or subscription, the Exchange Date
with respect to such interest shall be the day after the date such
interest is sold by such manager, all as determined and notified to the
Principal Paying Agent by Credit Suisse First Boston (Europe) Limited;
and
(b) the term "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands.
A-1-4
7. Authentication.
This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
A-1-5
Dated: August 5, 1997 TEXACO CAPITAL INC.
By: ______________________
[Title]
By: ______________________
[Title]
Authenticated:
THE CHASE MANHATTAN BANK
as Trustee
By: ______________________
Authorized Officer
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 interest 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 until the principal of and interest on all Notes shall have been paid in
full or for which payment has been provided.
TEXACO INC.
By: ______________________
[Title]
SCHEDULE A
SCHEDULE OF PAYMENTS AND EXCHANGES
The initial Principal Amount of this Note is U.S.$200,000,000. The
following payments of interest and exchanges of a part of this Note for an
interest in the Permanent Global Note have been made:
Date of Payment of Interest Principal Amount Remaining Principal Notation Made
Exchange Exchanged for Amount Outstanding by or on Behalf of
or Interest Permanent Following Principal Paying Agent
Payment Global Bearer Note Such Exchange
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EXHIBIT 1
[FORM OF CERTIFICATE TO BE GIVEN BY
AN ACCOUNT HOLDER OF THE EUROCLEAR OPERATOR
AND CEDEL BANK]
CERTIFICATE
-----------------------------------------
Texaco Capital Inc.
3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Represented by the Temporary Global Note
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Notes held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution hereby agrees, on its own behalf or through its
agent, that you may advise the Company or the Company's agent that it will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the U.S.
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the
Notes is a United States or foreign financial institution described in clause
(iii) above (whether or not also described in clause (i) or (ii)) such financial
institution has not acquired the Notes for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Notes held
by you for our account in accordance with your Operating Procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
This certificate excepts and does not relate to U.S.$ _________ of such
interest in the above Notes in respect of which we are not able to certify and
as to which we understand exchange for and delivery of definitive Notes (or, if
relevant, exercise of any rights or collection of any principal or interest)
cannot be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
Dated: ___________, ____
[To be dated no earlier than the 10th day
before September 15, 1997]
[NAME OF ACCOUNT HOLDER]
By: _________________________
(Authorized Signatory)
Name:
Title:
2
EXHIBIT 2
[FORM OF CERTIFICATE TO BE GIVEN BY
THE EUROCLEAR OPERATOR AND CEDEL BANK]
CERTIFICATE
-----------------------------------------
Texaco Capital Inc.
3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Represented by the Temporary Global Note
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Temporary Global Note, as of the date hereof,
U.S.$__________ principal amount of the above-captioned Notes (i) is owned by
persons that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) is owned by United States persons that are (a)
foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution has agreed, on its own behalf or through its agent,
that we may advise the Company or the Company's agent that it will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the U.S. Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by United States or foreign financial institutions for purposes of resale
during the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and in addition if the owners of the Notes are United
States or foreign financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)), such financial
institutions have certified that they have not acquired the Notes for purposes
of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, seeking to collect principal or interest with respect
to) any portion of the temporary global Security representing the
above-captioned Notes excepted in the above-referenced certificates of Member
Organizations and (ii) that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith (or, if relevant, with respect to which principal or
interest is being requested) are no longer true and cannot be relied upon as of
the date hereof.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
Dated: ___________, ____
[To be dated no earlier than
September 15, 1997]
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, as Operator of the
Euroclear System]
[CEDEL BANK S.A.]
By: ___________________________
Name:
Title:
2
EXHIBIT A-2
[FORM OF FACE OF PERMANENT GLOBAL NOTE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
TEXACO CAPITAL INC.
Permanent Global Note
representing up to
U.S.$200,000,000 3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Guaranteed by
TEXACO INC.
Interest Payable: August 5
Texaco Capital Inc. promises to pay to bearer, upon surrender hereof,
the principal sum specified in Schedule A hereto on August 5, 2004 (except to
the extent previously redeemed or converted).
Dated: August 5, 1997 TEXACO CAPITAL INC.
By: ______________________
[Title]
By: ______________________
[Title]
Authenticated:
THE CHASE MANHATTAN BANK
as Trustee
By: ______________________
Authorized Officer
[FORM OF REVERSE OF PERMANENT GLOBAL NOTE]
1. Interest.
Texaco Capital Inc. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Note from time to time specified
in Schedule A hereto at the rate per annum shown above. The Company will pay
interest annually on August 5 of each year (each, an "Interest Payment Date").
Interest on the Note will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from August 5, 1997 (the "Issue
Date"). Except as provided in the Indenture, this Note will cease to bear
interest from and after the earlier of (a) August 5, 2004 or (b) the date fixed
for redemption of this Note, and any portion of this Note with respect to which
a Conversion Notice (as defined below) has been delivered will cease to bear
interest from and after the Interest Payment Date immediately preceding the
relevant Conversion Date (as defined below) or, if there is no such Interest
Payment Date, the Issue Date. If interest is required to be calculated for a
period of less than one year, it will be calculated on the basis of a 360-day
year consisting of 12 months of 30 days each.
2. Method of Payment.
Payment of the principal of this Note and the interest due at maturity
(or on any redemption date) will be made upon presentation and surrender of this
Note at the office or of any Non-U.S. Paying Agent. No payment on this Note will
be made at any office or agency of the Company in the United States (as defined
below) or by check mailed to an address in the United States or by wire transfer
to an account maintained by the Holder of this Note with a bank in the United
States except as may be permitted under United States federal tax laws and
regulations then in effect without adverse tax consequences to the Company.
Notwithstanding the foregoing, in the event that payment in U.S. dollars of the
full amount payable on this Note at the offices of all Non-U.S. Paying Agents
(as defined below) would be illegal or effectively precluded as a result of
exchange controls or similar restrictions, payment on this Note will be made by
a Paying Agent in the Borough of Manhattan, The City of New York, if and only if
(i) such Paying Agent, under applicable law and regulations, would be able to
make such payment and (ii) such payment would not involve, in the opinion of the
Company, adverse tax consequences for the Company. Owners of beneficial
interests in this Note must look solely to Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System (the "Euroclear
Operator") or
A-2-3
Cedel Bank, societe anonyme ("Cedel Bank"), as the case may be, for their share
of each payment made to the bearer of this Note.
3. Paying and Conversion Agents.
Initially, The Chase Manhattan Bank, as Trustee (the "Trustee"), at its
office in London at Trinity Tower, 9 Thomas More Street, London E19YT, England,
will act as the principal Paying Agent for the Notes outside the United States
(the "Principal Paying Agent") and as the principal Conversion Agent for the
Notes outside the United States (the "Principal Conversion Agent"). Initially,
Chase Manhattan Bank Luxembourg S.A., at its office in Luxembourg at 5 rue
Plaetis, L-2338 Luxembourg, Luxembourg, will act as a Paying Agent and a
Conversion Agent in Luxembourg. The Company may appoint additional Paying Agents
or Conversion Agents or change any Paying Agent or Conversion Agent without
notice to Holders (any such additional Paying Agent or other Paying Agent for
the Notes outside the United States, a "Non-U.S. Paying Agent").
4. Indenture.
The Company issued this Note as part of a Series of Securities,
designated as "3.50% Guaranteed Cash-Settled Convertible Notes Due 2004" (the
"Notes"), under an indenture dated as of August 24, 1984, as supplemented and
restated by the First Supplemental Indenture dated as of January 31, 1990, as
further amended by the First Supplement to the First Supplemental Indenture
dated as of October 11, 1990, and 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, Texaco Inc. and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 7aaa-77bbbb) as amended (the "Act"). This Note is subject to all such
terms, and the Holder of this Note is referred to the Indenture and the Act for
a statement of them. All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
A-2-4
5. Guaranty.
The Notes are guaranteed by Texaco Inc.
6. Conversion.
At any time during the Conversion Period (as defined below), this Note
may be surrendered for conversion into the cash Conversion Amount (as defined
below) at the option of the owners of beneficial interests herein as follows. On
any Business Day (as defined below) during the Conversion Period, the owner of a
beneficial interest in this Note may give notice to any Conversion Agent, who
will provide copies to the Company, the Calculation Agent, the Principal
Conversion Agent and the Trustee, in writing in the form provided in the
Indenture (a "Conversion Notice"), that such owner elects to convert this Note
or a specified portion hereof into the Conversion Amount. In addition, the
converting owner of a beneficial interest in this Note must deliver the
Conversion Notice to the Euroclear Operator or Cedel Bank, as the case may be,
together with an authority to debit such owner's account pro tanto. Interests in
this Note may only be converted in a minimum principal amount of U.S.$10,000 and
integral multiples of U.S.$10,000 in excess thereof. On the relevant Conversion
Date (as defined below), the Conversion Agent to whom the Conversion Notice is
delivered shall obtain confirmation from the Euroclear Operator or Cedel Bank,
as the case may be, that such owner is shown on its records as the owner of at
least the principal amount of Notes in respect of which the Conversion Notice is
delivered, and the Euroclear Operator or Cedel Bank, as the case may be, shall
debit such owner's account with the principal amount of this Note to be
converted and the principal amount of this Note shall be reduced accordingly.
Any question as to the validity of a Conversion Notice or as to whether such
notice has been properly and timely given will be resolved finally by the
Principal Conversion Agent in its sole discretion. No interest shall be payable
on any portion of this Note with respect to which a Conversion Notice has been
delivered on any Interest Payment Date occurring on or after the relevant
Conversion Date.
On the Settlement Date (as defined below) with respect to the
conversion of a beneficial interest in this Note, the Holder of this Note will
be entitled to receive the Conversion Amount in cash. Any payment of the
Conversion Amount shall be deemed to be a payment of principal for all purposes
under the Indenture and the Notes. Owners of beneficial interests in this Note
must look solely to the Euroclear Operator or Cedel Bank, as the case may be,
for their share of each payment made to the bearer of this Note.
A-2-5
As used herein:
(a) the term "Business Day" means any day that is not a
Saturday, a Sunday or a day on which banking institutions or trust
companies in The City of New York, the City of London or Luxembourg are
authorized or obligated by law or executive order to close;
(b) the term "Closing Price" means, with respect to any
security on any date, the closing sale price or last reported sale
price for the security on the principal securities exchange or national
market system on which such security is listed for trading or quoted on
such date or, if such security is not so listed or quoted on such date,
the fair market value of such security on such date, as determined by
the Calculation Agent, in each case subject to adjustment as described
below;
(c) the term "Conversion Amount" means, with respect to the
principal amount of this Note with respect to which a Conversion Notice
has been given, (i) if the relevant Conversion Notice is delivered
prior to notice of redemption having been given by the Company, an
amount in cash determined by the Calculation Agent to be the Closing
Price of the Texaco Common Stock on the related Conversion Date (or, if
the Conversion Date is not a Trading Day, on the first following day
that is a Trading Day) multiplied by the Conversion Ratio, or (ii) if
the relevant Conversion Notice is delivered after the giving of a
notice of redemption by the Company or within eight Business Days prior
to July 22, 2004, an amount in cash determined by the Calculation Agent
to be the average of the Closing Prices of the Texaco Common Stock on
the five consecutive Trading Days commencing on the applicable
Conversion Date multiplied by the Conversion Ratio;
(d) the term "Conversion Date" means, with respect to any
portion of this Note with respect to which a Conversion Notice is
given, the second Business Day immediately following the date of
delivery of such Conversion Notice to the relevant Conversion Agent and
the Euroclear Operator or Cedel Bank, as the case may be;
(e) the term "Conversion Period" means the period commencing
on September 15, 1997 and ending at 5:00 P.M., London time, on July 22,
2004 or, if this Note shall have been called for redemption prior to
August 5, 2004, ending at 5:00 P.M., London time, on the date eight
Business Days prior to the date fixed for redemption thereof; provided
that if the Company defaults in making payment in full in respect of
this Note or
A-2-6
prior to the date fixed for redemption hereof, the Conversion Period
will continue until 5:00 P.M., London time, on the date upon which the
full amount of the moneys payable in respect of this Note has been
duly received by the Trustee and notice of such receipt has been duly
given to the Holders of the Notes by the Trustee;
(f) the term "Conversion Ratio" means 71.35 shares of Texaco
Common Stock per U.S.$10,000 principal amount of Notes;
(g) the term "Settlement Date" means the day as soon as
reasonably practicable after the Conversion Date determined by the
Calculation Agent and the Principal Conversion Agent to be the day for
payment of the Conversion Amount;
(h) the term "Texaco Common Stock" means the common stock of
Texaco Inc.; and
(i) "Trading Day" means, with respect to any security, any
day that is a trading day on the principal securities exchange or
national market system on which such security is then listed other than
a day on which (i) trading on such exchange or national market system
is scheduled to close prior to its regular weekday closing time or (ii)
there occurs any suspension of or limitation imposed on trading of such
security on such exchange during the one-half hour period that ends at
its regular weekday closing time that is, in the determination of the
Calculation Agent, material.
The Closing Price of the Texaco Common Stock on any of the Trading Days
used to calculate the Conversion Amount will be subject to adjustment by the
Calculation Agent as described below to the extent that any of the events
requiring such adjustment occurs during the period commencing on the date of
this Note and ending on such Trading Day.
Texaco Common Stock Dividends and Extraordinary Dividends and Distributions
In the event that a dividend or other distribution is declared (i) on
any class of Texaco capital stock, payable in shares of Texaco Common Stock,
(ii) on the Texaco Common Stock payable in cash in an amount greater than 10% of
the Closing Price of the Texaco Common Stock on the date fixed for the
determination of the shareholders of Texaco entitled to receive such cash
dividend (an "Extraordinary Cash Dividend"), or (iii) on the Texaco Common Stock
of
A-2-7
evidences of indebtedness or assets (including securities, but excluding any
dividend or distribution covered by clause (i) or any Texaco Spin-off described
under "-Dissolution of Texaco; Mergers, Consolidations or Sales of Assets;
Spin-offs" below) (an "Extraordinary Distribution"), any Closing Price of the
Texaco Common Stock used to calculate the Conversion Amount on any Trading Day
that follows the date (the "Texaco Record Date") fixed for the determination of
the shareholders of Texaco entitled to receive such dividend or other
distribution shall be increased by multiplying such Closing Price by a fraction,
the numerator of which shall be the number of shares of Texaco Common Stock
outstanding on the Texaco Record Date plus the number of shares constituting
such distribution or, in the case of any Extraordinary Cash Dividend or
Extraordinary Distribution, plus the number of shares of Texaco Common Stock
that could be purchased with the amount of such Extraordinary Cash Dividend or
the fair market value (as determined by the Calculation Agent, whose
determination shall be conclusive and binding) of the evidences of indebtedness
or assets constituting such Extraordinary Distribution at the Closing Price on
the Trading Day immediately subsequent to such Texaco Record Date, and the
denominator of which shall be the number of shares of Texaco Common Stock
outstanding on the Texaco Record Date.
Subdivisions and Combinations of the Texaco Common Stock
In the event that the outstanding shares of Texaco Common Stock are
subdivided into a greater number of shares, the Closing Price of the Texaco
Common Stock used to calculate the Conversion Amount on any Trading Day that
follows the date on which such subdivision becomes effective will be
proportionately increased and, conversely, in the event that the outstanding
shares of Texaco Common Stock are combined into a smaller number of shares, such
Closing Price of the Texaco Common Stock will be proportionately reduced.
Reclassifications of the Texaco Common Stock
In the event that the Texaco Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification or otherwise (except to the extent otherwise
provided under "-Texaco Common Stock Dividends and Extraordinary Dividends and
Distributions" and "-Subdivisions and Combinations of Texaco Common Stock" above
or pursuant to a Reorganization Event described under "-Dissolution of Texaco;
Mergers, Consolidations or Sales of Assets; Spin-offs" below), the Conversion
Amount will be calculated by using the aggregate Closing Prices of the shares of
stock into which a share of Texaco Common Stock was changed on any Trading Day
that follows the effectiveness of such change.
A-2-8
As a result of the foregoing provisions, in the case of a
reorganization or reclassification of the Texaco Common Stock, the Closing
Prices of one or more securities in addition to or in substitution for the
Texaco Common Stock may be used to calculate the Conversion Amount. For example,
if the Texaco Common Stock were reclassified into one share of Texaco Class A
Common Stock and one share of Texaco Class B Common Stock, the Conversion Amount
would be calculated by reference to the Closing Prices of the Texaco Class A
Common Stock and the Texaco Class B Common Stock.
Other Dilution Events
In the event that the Company (with the prior written approval of the
Calculation Agent) or the Calculation Agent determines that an adjustment should
be made to the Closing Price of the Texaco Common Stock on any of the Trading
Days used to calculate the Conversion Amount as a result of one or more events
or circumstances not otherwise described above (even if such event or
circumstance is specifically excluded from the operation of the provisions
described above), the Company shall at its own expense and acting reasonably
request the Calculation Agent to determine as soon as practicable what
adjustment (if any) is fair and reasonable to take account thereof.
Dissolution of Texaco; Mergers, Consolidations or Sales of Assets; Spin-offs.
In the event of any (i) consolidation or merger of Texaco with or into
another entity (other than a consolidation or merger that does not result in a
reclassification, conversion, exchange or cancellation of outstanding Texaco
Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of Texaco, (iii) liquidation, dissolution or winding up of
Texaco or (iv) declaration of a distribution on the Texaco Common Stock of the
common stock of any subsidiary of Texaco (a "Texaco Spin-off") (any of the
events described in (i), (ii), (iii) or (iv), a "Reorganization Event"), for
purposes of determining the Conversion Amount, the Closing Price of the Texaco
Common Stock on any Trading Day subsequent to, in the case of a Reorganization
Event other than a Texaco Spin-off, the effective time of such Reorganization
Event or, in the case of a Texaco Spin-off, the record date fixed for the
determination of the shareholders of Texaco entitled to receive the securities
distributed in such Texaco Spin-off (the "Spin-off Record Date") will be deemed
to be the amount equal to (1) the value of the cash and other property
(including securities) received by a holder of a share of Texaco Common Stock
(assuming such holder of Texaco Common Stock failed to exercise any rights of
election and received per share the kind and amount received by a plurality of
non-electing shares) in any such Reorganization Event (plus, in the case of a
Texaco Spin-off, the value of a share
A-2-9
of Texaco Common Stock), and (2) to the extent that such holder obtains
securities in any Reorganization Event, the value of the cash and other property
received by the holder of such securities in any subsequent event with respect
to the issuer of such securities that would, if such issuer were Texaco, be a
Reorganization Event. For purposes of determining any such Closing Prices, the
value of (i) any cash and other property (other than securities) received in any
such Reorganization Event will be an amount equal to the value of such cash and
other property at the effective time of such Reorganization Event (as determined
by the Calculation Agent, whose determination shall be conclusive and binding),
and (ii) any property consisting of securities received in any such
Reorganization Event will be an amount equal to the Closing Prices of such
securities on any Trading Day following, in the case of a Reorganization Event
other than a Texaco Spin-off, the effective time of such Reorganization Event
or, in the case of a Texaco Spin-off, the Spin-off Record Date.
If any action would require adjustment of the Closing Price pursuant to
more than one of the foregoing provisions, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the highest absolute
value to the Holder of this Note. No adjustment in the Closing Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% of the Closing Price, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
The Calculation Agent will promptly notify the Company and the
Principal Conversion Agent, which will in turn notify the Holders, of any event
requiring an adjustment and of the method of calculation to be used to make any
dilution adjustment as described above.
All determinations made by the Calculation Agent shall be at the sole
discretion of the Calculation Agent and, in the absence of manifest error, shall
be conclusive for all purposes and binding on the Company and the Holders, and
the Calculation Agent shall have no liability therefor. All results of any
calculation of the Conversion Amount will be rounded, if necessary, to the
nearest one-one-hundred-thousandth of a percent (with five one-millionths of a
percentage point being rounded downward).
A-2-10
7. Redemption.
The Notes are redeemable, at the option of the Company, in whole but
not in part, at any time on or after August 5, 1999, at the principal amount
thereof upon not less than 15 days' nor more than 30 days' notice to Holders.
8. Tax Redemption.
The Notes may be redeemed as a whole, at the option of the Company at
any time prior to maturity, upon the giving of a notice of redemption in the
manner provided in the Indenture, at the principal amount thereof, together with
accrued interest to the date fixed for redemption, if the Company determines
that, as a result of any change in or amendment to the laws (or any regulations
or rulings promulgated thereunder) of the United States or of any political
subdivision or taxing authority thereof or therein affecting taxation, or any
change in official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment becomes effective on or
after the date of this Note, the Company or Texaco Inc., as the case may be, has
or will become obligated to pay Additional Amounts (as defined below) with
respect to the Notes as described below under paragraph 9 hereof. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Company shall
deliver to the Trustee (i) a certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company to so redeem have occurred (the
date on which such certificate is delivered to the Trustee being the "Redemption
Determination Date"), and (ii) an opinion of counsel reasonably acceptable to
the Trustee to such effect based on such statement of facts; provided that no
such notice of redemption shall be given earlier than 60 days prior to the
earliest date on which the Company or Texaco Inc., as the case may be, would be
obligated to pay such Additional Amounts if a payment in respect of any Note
were then due.
If the Company shall determine that any payment made outside the United
States by the Company or Texaco Inc., as the case may be, by any Paying Agent of
principal or interest due in respect of any Note or Coupon (as defined below)
would, under any present or future laws or regulations of the United States, be
subject to any certification, identification or other information reporting
requirement of any kind, the effect of which is the disclosure to the Company,
Texaco Inc., any Paying Agent or any governmental authority of the nationality,
residence or identity of a beneficial owner of such Note or Coupon who is a
United States Alien (as defined below under ", Payment of Additional Amounts")
(other than such a requirement (a) that would not be applicable to a payment
made by the Company or Texaco Inc., as the case may be, or any Paying
A-2-11
Agent (i) directly to the beneficial owner or (ii) to a custodian, nominee or
other agent of the beneficial owner, or (b) that can be satisfied by such
custodian, nominee or other agent certifying to the effect that such beneficial
owner is a United States Alien; provided that in each case referred to in
clauses (a)(ii) and (b) payment by such custodian, nominee or agent to such
beneficial owner would not otherwise be subject to any such requirement), the
Company shall redeem the Notes, as a whole, at the principal amount thereof,
together with accrued interest to the date fixed for redemption or, at the
election of the Company or Texaco Inc., as the case may be, if the conditions of
the next paragraph are satisfied, pay the additional amounts specified in such
paragraph. The Company shall make such determination and election as soon as
practicable and publish prompt notice thereof (the "Determination Notice")
stating the effective date of such certification, identification or other
information reporting requirements, whether the Company will redeem the Notes or
has elected to pay the additional amounts specified in the next paragraph, and
(if applicable) the last date by which the redemption of the Notes must take
place, as provided in the next sentence. If the Company redeems the Notes, such
redemption shall take place on such date, not later than one year after the
publication of the Determination Notice, as the Company shall elect by notice to
the Trustee. Notwithstanding the foregoing, the Company shall not so redeem the
Notes if the Company or Texaco Inc., as the case may be, shall subsequently
determine, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such certification,
identification or other information reporting requirement, in which case the
Company shall publish prompt notice of such determination and any earlier
redemption notice shall be revoked and of no further effect.
If and so long as the certification, identification or other
information reporting requirements referred to in the preceding paragraph would
be fully satisfied by payment of a backup withholding tax or similar charge, the
Company or Texaco Inc., as the case may be, may elect to pay as additional
amounts such amounts as may be necessary so that every net payment made outside
the United States following the effective date of such requirements by the
Company or Texaco Inc., as the case may be, or any Paying Agent of principal or
interest due in respect of any Note or any Coupon of which the beneficial owner
is a United States Alien (but without any requirement that the nationality,
residence or identity of such beneficial owner be disclosed to the Company,
Texaco Inc., any Paying Agent or any governmental authority, with respect to the
payment of such additional amounts), after deduction or withholding for or on
account of such backup withholding tax or similar charge (other than a backup
withholding tax or similar charge that (i) would not be applicable in the
circumstances referred to in the second parenthetical clause of the first
sentence of the preceding paragraph, or (ii) is imposed as a result of
presentation of such Note or Coupon for payment
A-2-12
more than 15 days after the date on which such payment becomes due and payable
or on which payment thereof is duly provided for, whichever occurs later), will
not be less than the amount provided for in such Note or Coupon to be then due
and payable. In the event the Company or Texaco Inc., as the case may be, elects
to pay any additional amounts pursuant to the applicable provisions of this
paragraph, the Company shall have the right to redeem the Notes as a whole at
any time pursuant to the provisions of the preceding paragraph and the
redemption price of such Notes will not be reduced for applicable withholding
taxes. If the Company or Texaco Inc., as the case may be, elects to pay
additional amounts pursuant to this paragraph and the condition specified in the
first sentence of this paragraph should no longer be satisfied, then the Company
will redeem the Notes as a whole, pursuant to the applicable provisions of the
preceding paragraph.
9. Payment of Additional Amounts.
The Company will, subject to certain exceptions and limitations set
forth below, pay such additional amounts (the "Additional Amounts") to the
Holder of this Note who is a United States Alien as may be necessary in order
that every net payment of the principal of and interest on this Note and any
other amounts payable on such Note, after withholding for or on account of any
present or future tax, assessment or governmental charge imposed upon or as a
result of such payment by the United States (or any political subdivision or
taxing authority thereof or therein), will not be less than the amount provided
for in this Note to be then due and payable. The Company will not, however, be
required to make any payment of Additional Amounts to any such Holder for or on
account of:
(a) any such tax, assessment or other governmental charge that
would not have been so imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of such Holder,
if such Holder is an estate, a trust, a partnership or a corporation)
and the United States and its possessions, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member or shareholder) being or having been a citizen or resident
thereof or being or having been engaged in a trade or business or
present therein or having or having had a permanent establishment
therein or (ii) the presentation by the Holder of this Note for
payment on a date more than 15 days after the date on which such
payment became due and payable or the date on which payment thereof is
duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
A-2-13
(c) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation that accumulates earnings to avoid
United States federal income tax or as a private foundation or other
tax-exempt organization;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from payments on or in respect
of this Note;
(e) any tax, assessment or other governmental charge required to
be withheld by any Paying Agent from any payment of principal of or
interest on this Note, if such payment can be made without such
withholding by any other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge that would
not have been imposed but for the failure to comply with
certification, information or other reporting requirements concerning
the nationality, residence or identity of the owner or beneficial
owner of this Note, if such compliance is required by statute or by
regulation of the United States or of any political subdivision or
taxing authority thereof or therein as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as the actual or
constructive owner of 10% or more of the total combined voting power
of all classes of stock entitled to vote of the Company or as a direct
or indirect subsidiary of the Company; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall Additional Amounts be paid with respect to any payment on this Note to
a United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this Note.
A-2-14
As used herein, the term "United States Alien" means any person who,
for United States federal income tax purposes, is a foreign corporation, a
nonresident alien individual, a nonresident alien fiduciary of a foreign estate
or trust, or a foreign partnership one or more of the members of which is a
foreign corporation, a nonresident alien individual or a nonresident alien
fiduciary of a foreign estate or trust.
10. Transfer.
The Holder of this Note may transfer this Note in accordance with the
Indenture; provided that this Note may be transferred only to a common
depositary outside the United States for the Euroclear Operator and Cedel Bank
or to a nominee of such a depositary. The Company may require the Holder of this
Note, 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.
11. Persons Deemed Owners.
The bearer of this Note may be treated as the owner of it for all
purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Notes or the Indenture with respect
to the Notes may be amended with the consent of the Holders of at least 50.1% in
principal amount of the 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 Notes outstanding. Without the consent of any
Holder, the Indenture or the Notes may be amended to cure any ambiguity, defect
or inconsistency; to provide for assumption of the Company's obligations to
Holders; or to make any change that does not adversely affect the rights of any
Holder.
13. Restrictive Covenants.
The Notes are unsecured general obligation of the Company limited to
$200,000,000 in aggregate principal amount. 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
A-2-15
important qualifications and exceptions. Once a year Texaco Inc. must report to
the Trustee on compliance with the limitations.
When a successor corporation assumes all the obligations of the Company
under the Notes and the Indenture with respect to the Notes, the Company will be
released from those obligations.
14. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of interest on
the Notes; default in payment of principal on the Notes; failure by the Company
or by Texaco Inc., as the case may be, for 90 days after notice to the Company
to comply with any of its other agreements in the Notes or the Indenture; 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 Notes may declare all the Notes to be due and payable immediately. Holders
may not enforce the Notes or the Indenture with respect to the Notes except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Notes or the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing default (except a default in payment of principal or interest)
if it determines that withholding notice is in their interests.
15. 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 affiliates of either, as
if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or Texaco Inc. shall not have any liability for any obligations of the Company
or Texaco Inc. under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder 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.
A-2-16
17. Exchange for Definitive Notes.
The beneficial owner of all or a portion of this Note may exchange its
interest in this Note upon not less than 30 days' written notice to any Non-U.S.
Paying Agent through the relevant clearing system, in whole, for Notes in
definitive bearer form with interest coupons ("Coupons") attached ("Definitive
Notes") in denominations of U.S.$10,000. Interests in this Note shall also be
exchanged by the Company in whole, but not in part, for Definitive Notes if (i)
this Note is accelerated following an Event of Default or (ii) either the
Euroclear Operator or Cedel Bank is closed for business for a continuous period
of fourteen days (other than by reason of public holidays) or announces an
intention to cease business permanently or in fact does so. The Company shall
give notice to the Principal Paying Agent promptly following any such
acceleration or upon learning of any such closure. Any exchanges referred to
above shall be made at the office of the Principal Paying Agent, upon compliance
with the procedures set forth in the Indenture; provided that the Company shall
not be required to exchange this Note for a period of fifteen calendar days
preceding the first publication of a notice of redemption of the Notes. Upon
exchange of this Note in whole for Definitive Notes, the Principal Paying Agent
shall cause Schedule A of this Note to be endorsed to reflect the reduction of
the principal amount hereof by an amount equal to the aggregate principal amount
of such Definitive Notes, whereupon the principal amount hereof shall be reduced
for all purposes by the amount so exchanged and noted. All such exchanges of
this Note will be free of service charge, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The date of any Definitive Note delivered upon any
exchange of this Note shall be such that no gain or loss of interest results
from such exchange.
All (and not less than all) interests in this Note will be exchanged
for Definitive Notes as soon as practicable after (i) the first beneficial owner
of an interest in this Note exchanges its interest for Definitive Notes or (ii)
the Company gives notice to the Principal Paying Agent of an acceleration of the
Note or the closure of a relevant clearing system as described above.
18. Authentication.
This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
A-2-17
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 interest 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 until the principal of and interest on all Notes shall have been paid in
full or for which payment has been provided.
TEXACO INC.
By: ______________________
[Title]
SCHEDULE A
EXCHANGES FOR DEFINITIVE NOTES
AND FROM TEMPORARY GLOBAL NOTE,
AND CONVERSION
The initial principal amount of this Note is U.S.$200,000,000. The
following (A) exchanges of (i) portions of this Note for Definitive Notes and
(ii) portions of the Temporary Global Note for an interest in this Note or (B)
conversions of this Note at the option of the Holder have been made:
Date of Exchange Principal Amount Principal Amount Principal Amount Remaining Principal Notation Made by or on
or Conversion Exchanged From Exchanged For Converted at the Amount Outstanding Behalf of
the Temporary Definitive Notes Option of the Following Such Paying Agent
Global Note Holder Exchange or
Conversion
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EXHIBIT A-3
[FORM OF FACE OF DEFINITIVE NOTE]
ISIN:
Serial No.: Certificate No.:
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
TEXACO CAPITAL INC.
3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Guaranteed by
TEXACO INC.
Interest Payable: August 5
Texaco Capital Inc. promises to pay to bearer, upon surrender hereof,
the principal sum of U.S.$10,000 on August 5, 2004 (except to the extent
previously redeemed or converted).
Dated: TEXACO CAPITAL INC.
By: ______________________
[Title]
By: ______________________
[Title}
Authenticated:
[THE CHASE MANHATTAN BANK
as Trustee
By: ______________________
Authorized Officer]
[[Name of Authenticating Agent]
as Authenticating Agent
By: ______________________
Authorized Officer]
A-3-2
[FORM OF REVERSE OF DEFINITIVE NOTE]
1. Interest.
Texaco Capital Inc. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest annually on August 5 of each year (each, an
"Interest Payment Date"). Interest on the Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
August 5, 1997 (the "Issue Date"). Except as provided in the Indenture, this
Note will cease to bear interest from and after the earliest of (a) August 5,
2004, (b) the Interest Payment Date immediately preceding the Conversion Date
(as defined below) relating to the conversion of this Note into the Conversion
Amount (as defined below) or, if there is no such Interest Payment Date, the
Issue Date or (c) the date fixed for redemption of this Note. If interest is
required to be calculated for a period of less than one year, it will be
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each.
2. Method of Payment.
Payment of principal and interest on this Note will be made in
immediately available funds, subject to any applicable laws and regulations,
only against presentation and surrender of this Note or the relevant interest
coupon (a "Coupon"), as the case may be, at the office of any Non-U.S. Paying
Agent by check or, at the option of the Holder of this Note, by wire transfer of
immediately available funds to an account maintained by the payee with a bank
located outside the United States if appropriate wire transfer instructions have
been received by such Non-U.S. Paying Agent not less than 15 calendar days prior
to an applicable payment date. No payment on this Note or any Coupon
appertaining hereto will be made at any office or agency of the Company in the
United States (as defined below) or by check mailed to an address in the United
States or by wire transfer to an account maintained by the Holder of this Note
or such Coupon with a bank in the United States except as may be permitted under
United States federal tax laws and regulations then in effect without adverse
tax consequences to the Company. Notwithstanding the foregoing, in the event
that payment in U.S. dollars of the full amount payable on this Note or any
Coupon appertaining hereto at the offices of all Non-U.S. Paying Agents (as
defined below) would be illegal or effectively precluded as a result of exchange
controls or similar restrictions, payment on this Note or such Coupon will be
made by a Paying Agent in the Borough of
A-3-3
Manhattan, The City of New York, if and only if (i) such Paying Agent, under
applicable law and regulations, would be able to make such payment and (ii) such
payment would not involve, in the opinion of the Company, adverse tax
consequences for the Company.
3. Paying and Conversion Agents.
Initially, The Chase Manhattan Bank, as Trustee (the "Trustee"), at its
office in London at Trinity Tower, 9 Thomas More Street, London E19YT, England,
will act as the principal Paying Agent for the Notes outside the United States
(the "Principal Paying Agent") and as the principal Conversion Agent for the
Notes outside the United States (the "Principal Conversion Agent"). Initially,
Chase Manhattan Bank Luxembourg S.A., at its office in Luxembourg at 5 rue
Plaetis, L-2338 Luxembourg, Luxembourg, will act as a Paying Agent and a
Conversion Agent in Luxembourg. The Company may appoint additional Paying Agents
or Conversion Agents or change any Paying Agent or Conversion Agent without
notice to Holders (any such additional Paying Agent or other Paying Agent for
the Notes outside the United States, a "Non-U.S. Paying Agent").
4. Indenture.
The Company issued this Note as part of a Series of Securities,
designated as "3.50% Guaranteed Cash-Settled Convertible Notes Due 2004" (the
"Notes"), under an indenture dated as of August 24, 1984, as supplemented and
restated by the First Supplemental Indenture dated as of January 31, 1990, as
further amended by the First Supplement to the First Supplemental Indenture
dated as of October 11, 1990, and 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, Texaco Inc. and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 7aaa-77bbbb) as amended (the "Act"). This Note is subject to all such
terms, and the Holder of this Note is referred to the Indenture and the Act for
a statement of them. All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
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5. Guaranty.
The Notes are guaranteed by Texaco Inc.
6. Conversion.
At any time during the Conversion Period (as defined below), this Note
may be surrendered for conversion into the cash Conversion Amount (as defined
below) at the option of the Holder hereof as follows. On any Business Day (as
defined below) during the Conversion Period, the Holder of this Note may give
notice to any Conversion Agent, who will provide copies to the Company, the
Calculation Agent, the Principal Conversion Agent and the Trustee, in writing in
the form provided in the Indenture (a "Conversion Notice"), that such Holder
elects to convert this Note into the Conversion Amount. To be converted, this
Note, together with all unmatured Coupons appertaining hereto (for this purpose
treating any Coupon expressed to be payable on the relevant Conversion Date as
an unmatured Coupon), must be surrendered to a Conversion Agent together with
the Conversion Notice relating thereto. Any question as to the validity of a
Conversion Notice or as to whether such notice has been properly and timely
given will be resolved finally by the Principal Conversion Agent in its sole
discretion. On and after the Conversion Date with respect to this Note,
unmatured Coupons relating hereto (whether or not attached hereto) shall become
void and no payment shall be made in respect thereof.
On the Settlement Date (as defined below) with respect to the
conversion of this Note, the Holder of this Note will be entitled to receive the
Conversion Amount in cash. Any payment of the Conversion Amount shall be deemed
to be a payment of principal for all purposes under the Indenture and the Notes.
As used herein:
(a) the term "Business Day" means any day that is not a
Saturday, a Sunday or a day on which banking institutions or trust
companies in the City of New York, the City of London or Luxembourg are
authorized or obligated by law or executive order to close;
(b) the term "Closing Price" means, with respect to any
security on any date, the closing sale price or last reported sale
price for the security on the principal securities exchange or national
market system on which such security is listed for trading or quoted on
such date or, if such security is not so listed or quoted on such date,
the fair market value of
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such security on such date, as determined by the Calculation Agent,
in each case subject to adjustment as described below;
(c) the term "Conversion Amount" means, (i) if the relevant
Conversion Notice is delivered prior to notice of redemption having
been given by the Company, an amount in cash determined by the
Calculation Agent to be the Closing Price of the Texaco Common Stock on
the related Conversion Date (or, if the Conversion Date is not a
Trading Day, on the first following day that is a Trading Day)
multiplied by the Conversion Ratio, or (ii) if the relevant Conversion
Notice is delivered after the giving of a notice of redemption by the
Company or within eight Business Days prior to July 22, 2004, an amount
in cash determined by the Calculation Agent to be the average of the
Closing Prices of the Texaco Common Stock on the five consecutive
Trading Days commencing on the applicable Conversion Date multiplied by
the Conversion Ratio;
(d) the term "Conversion Date" means, with respect to any
Note surrendered for conversion, the second Business Day immediately
following the date of delivery of the related Conversion Notice to the
relevant Conversion Agent;
(e) the term "Conversion Period" means the period commencing
on September 15, 1997 and ending at 5:00 P.M., London time, on July 22,
2004 or, if this Note shall have been called for redemption prior to
August 5, 2004, ending at 5:00 P.M., London time, on the date eight
Business Days prior to the date fixed for redemption thereof; provided
that if the Company defaults in making payment in full in respect of
this Note or prior to the date fixed for redemption hereof, the
Conversion Period will continue until 5:00 P.M., London time, on the
date upon which the full amount of the moneys payable in respect of
this Note has been duly received by the Trustee and notice of such
receipt has been duly given to the Holders of the Notes by the Trustee;
(f) the term "Conversion Ratio" means 71.35 shares of Texaco
Common Stock per U.S. $10,000 principal amount of Notes;
(g) the term "Settlement Date" means the day as soon as
reasonably practicable after the Conversion Date determined by the
Calculation Agent and the Principal Conversion Agent to be the day for
payment of the Conversion Amount;
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(h) the term "Texaco Common Stock" means the common stock
of Texaco Inc.; and
(i) "Trading Day" means, with respect to any security, any
day that is a trading day on the principal securities exchange or
national market system on which such security is then listed other than
a day on which (i) trading on such exchange or national market system
is scheduled to close prior to its regular weekday closing time or (ii)
there occurs any suspension of or limitation imposed on trading of such
security on such exchange during the one-half hour period that ends at
its regular weekday closing time that is, in the determination of the
Calculation Agent, material.
The Closing Price of the Texaco Common Stock on any of the Trading Days
used to calculate the Conversion Amount will be subject to adjustment by the
Calculation Agent as described below to the extent that any of the events
requiring such adjustment occurs during the period commencing on the date of
this Note and ending on such Trading Day.
Texaco Common Stock Dividends and Extraordinary Dividends and Distributions
In the event that a dividend or other distribution is declared (i) on
any class of Texaco capital stock, payable in shares of Texaco Common Stock,
(ii) on the Texaco Common Stock payable in cash in an amount greater than 10% of
the Closing Price of the Texaco Common Stock on the date fixed for the
determination of the shareholders of Texaco entitled to receive such cash
dividend (an "Extraordinary Cash Dividend"), or (iii) on the Texaco Common Stock
of evidences of indebtedness or assets (including securities, but excluding any
dividend or distribution covered by clause (i) or any Texaco Spin-off described
under "-Dissolution of Texaco; Mergers, Consolidations or Sales of Assets;
Spin-offs" below) (an "Extraordinary Distribution"), any Closing Price of the
Texaco Common Stock used to calculate the Conversion Amount on any Trading Day
that follows the date (the "Texaco Record Date") fixed for the determination of
the shareholders of Texaco entitled to receive such dividend or other
distribution shall be increased by multiplying such Closing Price by a fraction,
the numerator of which shall be the number of shares of Texaco Common Stock
outstanding on the Texaco Record Date plus the number of shares constituting
such distribution or, in the case of any Extraordinary Cash Dividend or
Extraordinary Distribution, plus the number of shares of Texaco Common Stock
that could be purchased with the amount of such Extraordinary Cash Dividend or
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the fair market value (as determined by the Calculation Agent, whose
determination shall be conclusive and binding) of the evidences of indebtedness
or assets constituting such Extraordinary Distribution at the Closing Price on
the Trading Day immediately subsequent to such Texaco Record Date, and the
denominator of which shall be the number of shares of Texaco Common Stock
outstanding on the Texaco Record Date.
Subdivisions and Combinations of the Texaco Common Stock
In the event that the outstanding shares of Texaco Common Stock are
subdivided into a greater number of shares, the Closing Price of the Texaco
Common Stock used to calculate the Conversion Amount on any Trading Day that
follows the date on which such subdivision becomes effective will be
proportionately increased and, conversely, in the event that the outstanding
shares of Texaco Common Stock are combined into a smaller number of shares, such
Closing Price of the Texaco Common Stock will be proportionately reduced.
Reclassifications of the Texaco Common Stock
In the event that the Texaco Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification or otherwise (except to the extent otherwise
provided under "-Texaco Common Stock Dividends and Extraordinary Dividends and
Distributions" and "-Subdivisions and Combinations of Texaco Common Stock" above
or pursuant to a Reorganization Event described under "-Dissolution of Texaco;
Mergers, Consolidations or Sales of Assets; Spin-offs" below), the Conversion
Amount will be calculated by using the aggregate Closing Prices of the shares of
stock into which a share of Texaco Common Stock was changed on any Trading Day
that follows the effectiveness of such change.
As a result of the foregoing provisions, in the case of a
reorganization or reclassification of the Texaco Common Stock, the Closing
Prices of one or more securities in addition to or in substitution for the
Texaco Common Stock may be used to calculate the Conversion Amount. For example,
if the Texaco Common Stock were reclassified into one share of Texaco Class A
Common Stock and one share of Texaco Class B Common Stock, the Conversion Amount
would be calculated by reference to the Closing Prices of the Texaco Class A
Common Stock and the Texaco Class B Common Stock.
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Other Dilution Events
In the event that the Company (with the prior written approval of the
Calculation Agent) or the Calculation Agent determines that an adjustment should
be made to the Closing Price of the Texaco Common Stock on any of the Trading
Days used to calculate the Conversion Amount as a result of one or more events
or circumstances not otherwise described above (even if such event or
circumstance is specifically excluded from the operation of the provisions
described above), the Company shall at its own expense and acting reasonably
request the Calculation Agent to determine as soon as practicable what
adjustment (if any) is fair and reasonable to take account thereof.
Dissolution of Texaco; Mergers, Consolidations or Sales of Assets;
Spin-offs
In the event of any (i) consolidation or merger of Texaco with or into
another entity (other than a consolidation or merger that does not result in a
reclassification, conversion, exchange or cancellation of outstanding Texaco
Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of Texaco, (iii) liquidation, dissolution or winding up of
Texaco or (iv) declaration of a distribution on the Texaco Common Stock of the
common stock of any subsidiary of Texaco (a "Texaco Spin-off") (any of the
events described in (i), (ii), (iii) or (iv), a "Reorganization Event"), for
purposes of determining the Conversion Amount, the Closing Price of the Texaco
Common Stock on any Trading Day subsequent to, in the case of a Reorganization
Event other than a Texaco Spin-off, the effective time of such Reorganization
Event or, in the case of a Texaco Spin-off, the record date fixed for the
determination of the shareholders of Texaco entitled to receive the securities
distributed in such Texaco Spin-off (the "Spin-off Record Date") will be deemed
to be the amount equal to (1) the value of the cash and other property
(including securities) received by a holder of a share of Texaco Common Stock
(assuming such holder of Texaco Common Stock failed to exercise any rights of
election and received per share the kind and amount received by a plurality of
non-electing shares) in any such Reorganization Event (plus, in the case of a
Texaco Spin-off, the value of a share of Texaco Common Stock), and (2) to the
extent that such holder obtains securities in any Reorganization Event, the
value of the cash and other property received by the holder of such securities
in any subsequent event with respect to the issuer of such securities that
would, if such issuer were Texaco, be a Reorganization Event. For purposes of
determining any such Closing Prices, the value of (i) any cash and other
property (other than securities) received in any such Reorganization Event will
be an amount equal to the value of such cash and other property at the effective
time of such Reorganization Event (as determined
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by the Calculation Agent, whose determination shall be conclusive and binding),
and (ii) any property consisting of securities received in any such
Reorganization Event will be an amount equal to the Closing Prices of such
securities on any Trading Day following, in the case of a Reorganization Event
other than a Texaco Spin-off, the effective time of such Reorganization Event
or, in the case of a Texaco Spin-off, the Spin-off Record Date.
If any action would require adjustment of the Closing Price pursuant to
more than one of the foregoing provisions, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the highest absolute
value to the Holder of this Note. No adjustment in the Closing Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% of the Closing Price, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
The Calculation Agent will promptly notify the Company and the
Principal Conversion Agent, which will in turn notify the Holders, of any event
requiring an adjustment and of the method of calculation to be used to make any
dilution adjustment as described above.
All determinations made by the Calculation Agent shall be at the sole
discretion of the Calculation Agent and, in the absence of manifest error, shall
be conclusive for all purposes and binding on the Company and the Holders, and
the Calculation Agent shall have no liability therefor. All results of any
calculation of the Conversion Amount will be rounded, if necessary, to the
nearest one-one-hundred-thousandth of a percent (with five one-millionths of a
percentage point being rounded downward).
7. Redemption.
The Notes are redeemable, at the option of the Company, in whole but
not in part, at any time on or after August 5, 1999, at the principal amount
thereof upon not less than 15 days' nor more than 30 days' notice to Holders.
8. Tax Redemption.
The Notes may be redeemed as a whole, at the option of the Company at
any time prior to maturity, upon the giving of a notice of redemption in the
manner provided in the Indenture, at the principal amount thereof, together with
accrued interest to the date fixed for redemption, if the Company determines
that,
A-3-10
as a result of any change in or amendment to the laws (or any regulations or
rulings promulgated thereunder) of the United States or of any political
subdivision or taxing authority thereof or therein affecting taxation, or any
change in official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment becomes effective on or
after the date of this Note, the Company or Texaco Inc., as the case may be, has
or will become obligated to pay Additional Amounts (as defined below) with
respect to the Notes as described below under paragraph 9 hereof. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Company shall
deliver to the Trustee (i) a certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company to so redeem have occurred (the
date on which such certificate is delivered to the Trustee being the "Redemption
Determination Date"), and (ii) an opinion of counsel reasonably acceptable to
the Trustee to such effect based on such statement of facts; provided that no
such notice of redemption shall be given earlier than 60 days prior to the
earliest date on which the Company or Texaco Inc., as the case may be, would be
obligated to pay such Additional Amounts if a payment in respect of any Note
were then due.
If the Company shall determine that any payment made outside the United
States by the Company or Texaco Inc., as the case may be, by any Paying Agent of
principal or interest due in respect of any Note or Coupon would, under any
present or future laws or regulations of the United States, be subject to any
certification, identification or other information reporting requirement of any
kind, the effect of which is the disclosure to the Company, Texaco Inc., any
Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Note or Coupon who is a United States
Alien (as defined below under ", Payment of Additional Amounts") (other than
such a requirement (a) that would not be applicable to a payment made by the
Company or Texaco Inc., as the case may be, or any Paying Agent (i) directly to
the beneficial owner or (ii) to a custodian, nominee or other agent of the
beneficial owner, or (b) that can be satisfied by such custodian, nominee or
other agent certifying to the effect that such beneficial owner is a United
States Alien; provided that in each case referred to in clauses (a)(ii) and (b)
payment by such custodian, nominee or agent to such beneficial owner would not
otherwise be subject to any such requirement), the Company shall redeem the
Notes, as a whole, at the principal amount thereof, together with accrued
interest to the date fixed for redemption or, at the election of the Company or
Texaco Inc., as the case may be, if the conditions of the next paragraph are
satisfied, pay the additional amounts specified in such paragraph. The Company
shall make such determination and election as soon as practicable and publish
prompt notice
A-3-11
thereof (the "Determination Notice") stating the effective date of such
certification, identification or other information reporting requirements,
whether the Company will redeem the Notes or has elected to pay the additional
amounts specified in the next paragraph, and (if applicable) the last date by
which the redemption of the Notes must take place, as provided in the next
sentence. If the Company redeems the Notes, such redemption shall take place on
such date, not later than one year after the publication of the Determination
Notice, as the Company shall elect by notice to the Trustee. Notwithstanding the
foregoing, the Company shall not so redeem the Notes if the Company or Texaco
Inc., as the case may be, shall subsequently determine, not less than 30 days
prior to the date fixed for redemption, that subsequent payments would not be
subject to any such certification, identification or other information reporting
requirement, in which case the Company shall publish prompt notice of such
determination and any earlier redemption notice shall be revoked and of no
further effect.
If and so long as the certification, identification or other
information reporting requirements referred to in the preceding paragraph would
be fully satisfied by payment of a backup withholding tax or similar charge, the
Company or Texaco Inc., as the case may be, may elect to pay as additional
amounts such amounts as may be necessary so that every net payment made outside
the United States following the effective date of such requirements by the
Company or Texaco Inc., as the case may be, or any Paying Agent of principal or
interest due in respect of any Note or any Coupon of which the beneficial owner
is a United States Alien (but without any requirement that the nationality,
residence or identity of such beneficial owner be disclosed to the Company,
Texaco Inc., any Paying Agent or any governmental authority, with respect to the
payment of such additional amounts), after deduction or withholding for or on
account of such backup withholding tax or similar charge (other than a backup
withholding tax or similar charge that (i) would not be applicable in the
circumstances referred to in the second parenthetical clause of the first
sentence of the preceding paragraph, or (ii) is imposed as a result of
presentation of such Note or Coupon for payment more than 15 days after the date
on which such payment becomes due and payable or on which payment thereof is
duly provided for, whichever occurs later), will not be less than the amount
provided for in such Note or Coupon to be then due and payable. In the event the
Company or Texaco Inc., as the case may be, elects to pay any additional amounts
pursuant to the applicable provisions of this paragraph, the Company shall have
the right to redeem the Notes as a whole at any time pursuant to the provisions
of the preceding paragraph and the redemption price of such Notes will not be
reduced for applicable withholding taxes. If the Company or Texaco Inc., as the
case may be, elects to pay additional amounts pursuant to this paragraph and the
condition specified in the first sentence of this
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paragraph should no longer be satisfied, then the Company will redeem the Notes
as a whole, pursuant to the applicable provisions of the preceding paragraph.
9. Payment of Additional Amounts.
The Company will, subject to certain exceptions and limitations set
forth below, pay such additional amounts (the "Additional Amounts") to the
Holder of this Note or of any Coupon appertaining hereto who is a United States
Alien as may be necessary in order that every net payment of the principal of
and interest on this Note and any other amounts payable on such Note, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in this Note or such Coupon to be
then due and payable. The Company will not, however, be required to make any
payment of Additional Amounts to any such Holder for or on account of:
(a) any such tax, assessment or other governmental charge that
would not have been so imposed but for (i) the existence of any
present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of such Holder,
if such Holder is an estate, a trust, a partnership or a corporation)
and the United States and its possessions, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member or shareholder) being or having been a citizen or resident
thereof or being or having been engaged in a trade or business or
present therein or having or having had a permanent establishment
therein or (ii) the presentation by the Holder of this Note or any
such Coupon for payment on a date more than 15 days after the date on
which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation that accumulates earnings to avoid
United States federal income tax or as a private foundation or other
tax-exempt organization;
A-3-13
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from payments on or in respect
of this Note;
(e) any tax, assessment or other governmental charge required to
be withheld by any Paying Agent from any payment of principal of or
interest on this Note, if such payment can be made without such
withholding by any other Paying Agent in a city in Western Europe; (f)
any tax, assessment or other governmental charge that would not have
been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the
nationality, residence or identity of the owner or beneficial owner of
this Note, if such compliance is required by statute or by regulation
of the United States or of any political subdivision or taxing
authority thereof or therein as a precondition to relief or exemption
from such tax, assessment or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as the actual or
constructive owner of 10% or more of the total combined voting power
of all classes of stock entitled to vote of the Company or as a direct
or indirect subsidiary of the Company; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall Additional Amounts be paid with respect to any payment on this Note to
a United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this Note.
As used herein, the term "United States Alien" means any person who,
for United States federal income tax purposes, is a foreign corporation, a
nonresident alien individual, a nonresident alien fiduciary of a foreign estate
or trust, or a foreign partnership one or more of the members of which is a
foreign corporation, a nonresident alien individual or a nonresident alien
fiduciary of a foreign estate or trust.
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10. Transfer.
The Holder of this Note may transfer this Note in accordance with the
Indenture. The Company may require the Holder of this Note, 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.
11. Persons Deemed Owners.
The bearer of this Note may be treated as the owner of it for all
purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Notes or the Indenture with respect
to the Notes may be amended with the consent of the Holders of at least 50.1% in
principal amount of the 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 Notes outstanding. Without the consent of any
Holder, the Indenture or the Notes may be amended to cure any ambiguity, defect
or inconsistency; to provide for assumption of the Company's obligations to
Holders; or to make any change that does not adversely affect the rights of any
Holder.
13. Restrictive Covenants.
The Notes are unsecured general obligation of the Company limited to
$200,000,000 in aggregate principal amount. 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.
When a successor corporation assumes all the obligations of the Company
under the Notes and the Indenture with respect to the Notes, the Company will be
released from those obligations.
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14. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of interest on
the Notes; default in payment of principal on the Notes; failure by the Company
or by Texaco Inc., as the case may be, for 90 days after notice to the Company
to comply with any of its other agreements in the Notes or the Indenture; 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 Notes may declare all the Notes to be due and payable immediately. Holders
may not enforce the Notes or the Indenture except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Notes or the Indenture with respect to the Notes. Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests.
15. 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 affiliates of either, as
if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or Texaco Inc. shall not have any liability for any obligations of the Company
or Texaco Inc. under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder 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.
17. Authentication.
This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.
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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 interest 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 until the principal of and interest on all Notes shall have been paid in
full or for which payment has been provided.
TEXACO INC.
By: ______________________
[Title]
A-3-17
[FORM OF FACE OF COUPON]
ISIN:
Serial No.: No.:
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
TEXACO CAPITAL INC.
3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Guaranteed by
TEXACO INC.
Coupon for U.S. $350, due on August 5, [1998, 1999, 2000, 2001, 2002,
2003, 2004].
This Coupon is separately negotiable, payable to bearer, subject to the terms of
the Notes.
A-3-18
[FORM OF REVERSE OF COUPON]
TRUSTEE
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
PRINCIPAL PAYING AND CONVERSION AGENT
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E19YT
England
Attention: Global Trust Services
LUXEMBOURG PAYING AND CONVERSION AGENT
Chase Manhattan Bank Luxembourg S.A.
5 rue Plaetis
L-2338 Luxembourg
Luxembourg
and such other or further Non-U.S. Paying Agents or Conversion Agents or
specified offices as may from time to time be duly appointed by the Company.
A-3-19
EXHIBIT B
[FORM OF CONVERSION NOTICE]
TEXACO CAPITAL INC.
3.50% Guaranteed Cash-Settled Convertible Notes Due 2004
Guaranteed by
TEXACO INC.
Delivery of Conversion Notice
Holders and beneficial owners wishing to convert Notes into the cash Conversion
Amount should complete two original copies of this notice and deliver one (in
person or by pre-paid mail) to Texaco Capital Inc. and the other in person, by
pre-paid mail or by tested telex confirmed in writing, to:
If the Notes to be converted are represented by the Permanent Global Note or
Definitive Notes held in a clearing system
The Euroclear Operator or Cedel Bank at the offices specified below or such
other clearing system, as the case may be, with copies to the Principal
Conversion Agent and the Trustee, each at its office specified below. A copy may
also be sent to the Luxembourg Conversion Agent at its office specified below.
If the Notes to be converted are Definitive Notes not held in a clearing system
The Principal Conversion Agent or the Luxembourg Conversion Agent at its office
specified below, together with the definitive individual certificate(s)
representing the Notes to be converted, with copies of the Conversion Notice to
the Trustee and, if the original Conversion Notice is delivered to the
Luxembourg Conversion Agent, the Principal Conversion Agent, each at its office
specified below.
Address for delivery of Conversion Notice:
Cedel Bank: Cedel Bank, societe anonyme
67 Boulevard Grande-Duchesse Charlotte
Luxembourg-Ville
L-1010 Luxembourg
Attention: OCE Department
Telex: 2791
Euroclear Operator: Morgan Guaranty Trust Company of New York
(as operator of the Euroclear System)
Brussels office
Boulevard Emile Jacqmain 151
B-1210 Brussels
Belgium
Attention: Custody Processing Department
Telex: 61025 MGTEC B
Principal Conversion
Agent: The Chase Manhattan Bank
Trinity Tower
Thomas More Street
London E19YT
England
Attention: Manager, Global Trust Operations
Fax: 44 1202 34 7945
Telex: 8954681 CMBG
Luxembourg
Conversion Agent: Chase Manhattan Bank Luxembourg S.A.
5 rue Plaetis
L-2338 Luxembourg
Luxembourg
Attention: Manager, Global Trust Operations
Fax: 352 4626 85380
Telex: 1233 CHASLU
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Texaco Capital Inc.: c/o Texaco Inc.
2000 Westchester Avenue
White Plains, New York 10650
United States
Attention:
Fax:
Trustee: The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
United States
Attention:
Fax:
Failure to properly complete and deliver this Notice (in the determination of
the Principal Conversion Agent (in consultation with the Euroclear Operator or
Cedel Bank, as the case may be, if the Notes to be converted are represented by
the Permanent Global Note or Definitive Notes held by the Euroclear Operator or
Cedel Bank)) may result in this Notice being treated as null and void.
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Terms defined in the Notes shall have the same meanings herein.
I, the Holder or beneficial owner specified in paragraph 1 below, being the
Holder or beneficial owner of the Notes referred to above, acknowledge that such
Notes are convertible into the cash Conversion Amount in accordance with the
terms of the Notes and hereby irrevocably authorize Texaco Capital Inc. (the
"Company") to convert such Notes as are specified in paragraph 2 below for the
cash Conversion Amount to which I am entitled with respect to such Notes.
1. Name and address of Holder or beneficial owner:
______________________________________________
______________________________________________
______________________________________________
2. Aggregate principal amount of Notes to be converted:
U.S.$________________
Certificate numbers of Notes (if relevant):1 __________________________
Details (including in respect of any missing unmatured Coupon):2
_______________________________________________________________________
3. Instructions to the Euroclear Operator/Cedel Bank3
I hereby irrevocably authorize and instruct the Euroclear
Operator/Cedel Bank to debit the principal amount of Notes referred to
above from the account referred to below on the Conversion Date.
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1 Not required for Notes represented by the Permanent Global Note or
those held in a clearing system.
2 An indemnity may be required in respect of missing unmatured
Coupons.
3 Not required where Definitive Notes are held outside clearing
systems.
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Account No: ____________________________________________
Name of Account: _______________________________________
I confirm that the Account referred to above is outside the United
States and is the account to be credited with the Conversion Amount.
4. Bank Account Details for Holders of Notes held outside clearing systems
Details of my bank account (which is outside the United States) to
which the Conversion Amount shall be paid are as follows:
Receiving Bank: ________________________________________
Account Number: ________________________________________
Name of Account: ________________________________________
5. Representations
I hereby represent and warrant that the Notes referred to above (and
any Coupons appertaining thereto) are free from all liens, charges,
encumbrances and all other third party rights.
6. Authorization of production in proceedings
I hereby authorize the production of this Notice in any administrative
or legal proceedings instituted in connection with the Notes to which
this Notice relates or otherwise in connection with establishing
compliance with applicable laws.
Signed: ________________________ Date: __________________
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________________________________________________________________________________
For Agent's use only:
1. (A) Conversion Date:
2. (A) Aggregate principal amount of Notes surrendered for conversion:
(B) Conversion Amount deliverable:
3. Details of any indemnity obtained in respect of missing unmatured
Coupons:
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