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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 8, 1994
TEXACO INC.
(Exact name of registrant as specified in its charter)
Delaware 1-27 74-1383447
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)
2000 Westchester Avenue, 10650
White Plains, New York (Zip Code)
(Address of principal
executive offices)
(914) 253-4000
(Registrant's telephone number, including area code)
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Item 5. Other Events
- - --------------------
On June 8, 1994, the Registrant announced that its wholly owned finance
subsidiary, Texaco Capital LLC, a limited life company organized under the
laws of the Turks and Caicos Islands, British West Indies, was issuing $112.5
million of $25 per share Cumulative Adjustable Rate Monthly Income Preferred
Shares, Series B ("Series B MIPS"),in a public offering. The Series B MIPS
will pay a variable dividend rate which will be reset quarterly and are
callable at par after five years. The dividend rate will be equal to 88
percent of the highest of three U.S. Treasury maturities, three-month, ten-year
and thirty-year. The dividend rate for the period from June 15, 1994 to
September 30, 1994 will be 6.4 percent per annum. The payment of dividends
and payments on liquidation or redemption with respect to the Series B MIPS
are guaranteed by Texaco Inc. Dividends on the Series B MIPS will be paid
monthly commencing June 30, 1994. The Series B MIPS are issued under a shelf
registration statement filed with the U.S. Securities and Exchange Commission
in October, 1993. Proceeds from the issuance will be loaned to Texaco Inc.
to be used for working capital, for retirement of debt and for other general
corporate purposes. The Series B MIPS will be listed on the New York Stock
Exchange (symbol TXCPrB).
The description of the Series B MIPS set forth above is qualified in its
entirety by reference to the Certification of Designation of Rights and
Preferences of Texaco Capital LLC's Cumulative Adjustable Rate Monthly Income
Preferred Shares, Series B, a copy of which is attached hereto as Exhibit 4.1
and made a part hereof.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
- - -------------------------------------------------------------------------
(c) Exhibits
3.1 Memorandum of Association of Texaco Capital LLC as amended
to June 10, 1994.
3.2 Articles of Association of Texaco Capital LLC as amended to
June 10, 1994.
4.1 A copy of the Certification of Designation of Rights and Preferences
of Texaco Capital LLC's Cumulative Adjustable Rate Monthly Income
Preferred Shares, Series B.
4.2 A copy of the Payment and Guarantee Agreement of Texaco Inc. dated
June 8, 1994.
12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Misick & Stanbrook, Turks and Caicos Islands counsel to
Texaco Inc. and Texaco Capital LLC.
23.3 Consent of Arthur G. Taylor, Associate General Counsel of
Texaco Inc.
23.4 Consent of Sullivan & Cromwell, special United States tax counsel.
99.1 A copy of the Preferred Stock Loan Agreement between Texaco Inc. and
Texaco Capital LLC dated June 8, 1994.
99.2 A copy of the Common Stock Loan Agreement between Texaco Inc. and
Texaco Capital LLC dated June 8, 1994.
99.3 A copy of the Agreement As To Liabilities between Texaco Inc. and
Texaco Capital LLC dated June 8, 1994.
99.4 A copy of Press Release issued by Texaco Inc. dated June 8, 1994,
entitled "Texaco Announces Public Issuance of $112.5 Million in
Preferred Shares."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TEXACO INC.
---------------------
(Registrant)
By: R. E. KOCH
---------------------
(Assistant Secretary)
Date: June 10, 1994
EXHIBIT 3.1
MEMORANDUM OF ASSOCIATION
OF
TEXACO CAPITAL LLC
1. The name of the Company is TEXACO CAPITAL LLC.
2. The registered office of the Company will be situated at MacLaw House
P.O. Box 103 Duke Street Grand Turk Turks and Caicos Islands British West
Indies.
3. The life of the Company shall be for a period of 150 years from the
date of its incorporation.
4. The Company shall at all times have at least two members.
5. The objects for which the Company is established are:
5.1. To issue redeemable preference shares to members of the public
and to use the proceeds thereof for lending to Texaco Inc. (the parent of
the Company) and to any subsidiary or affiliated company of Texaco Inc.
5.2. The business of the Company shall be restricted to the
furtherance of objects specified in clause 5.1 of this clause.
6. THE LIABILITY of the Members is limited.
7. THE CAPITAL of the Company is $5,005 divided into 5,005 shares of
$1.00 each.
Provided always that the Company shall have power to increase or reduce
such capital, and to issue any part of its capital, original or increased with
or without any preference, priority or special privilege, or subject to any
postponement of rights, or to any conditions or restrictions; and so that,
unless the conditions of issue shall otherwise expressly declare, every issue
of shares, whether declared to be preference or otherwise, shall be subject to
the power hereinbefore contained.
EXHIBIT 3.2
THE COMPANIES ORDINANCE 1981
ARTICLES OF ASSOCIATION
OF
TEXACO CAPITAL LLC
INTERPRETATION.
(1) In these Regulations the following words and expressions shall, where
not inconsistent with the context, have the following meanings respectively:
"Auditor" includes any individual or partnership;
"Common Shares" means ordinary shares of US$1.00 each in the capital
of the company;
"Common Shareholder" means the holder of a Common Share;
"Former Member" means a person who was a member but who has ceased to
be a member by virtue of Regulation 15;
"Manager" means Texaco Inc., a corporation organized under the State
of Delaware, having its principal place of business at 2000 Westchester
Avenue, White Plains, New York 10650, USA, any acquiror of the Manager,
orsuch other person, body corporate or partnership for the time being
charged with the management of the affairs of the Company by the Manager
pursuant to Regulation 28;
"Member" means the person, body corporate or partnership registered in
the Register of Members as the holder of shares in the Company, and when
two or more persons are so registered as joint holders of shares, means the
person whose name stands first in the Register of Members as one of such
joint holders;
"Notice" means written notice unless otherwise specifically stated;
"Preferred Shares" means shares issued pursuant to Regulation 10;
"Preferred Shareholder" means the holder of a Preferred Share;
"Register of Members" means the Register of Members kept in accordance
with Regulation 14;
"the Ordinance" means the Companies Ordinance 1981 and any statutory
modification thereof for the time being in force;
"the Company" means the Company for which these Articles are approved
and confirmed;
"Secretary" means the person appointed to perform the duties of
Secretary of the Company and includes any Assistant or Acting Secretary;
"Transfer" means with respect of any Common Shares, the transfer,
sale, assignment, mortgage, creation or permission to subsist of any
pledge, lien charge or encumbrance over, grant of any option, interest or
other rights in, or other disposition of any such shares, any part thereof
or any interest therein, whether by agreement, operation of law or
otherwise.
(2) In these Regulations, unless there be something in the subject or
context inconsistent with such construction, words importing the plural number
shall be deemed to include the singular number.
(3) Expressions referring to writing shall, unless the contrary intention
appears, be construed as including printing, lithography, photography and other
modes of representing words in a visible form.
(4) Unless the context otherwise requires, words or expressions contained
in these Regulations shall bear the same meaning as in the Ordinance or any
statutory modification thereof in force for the time being.
SHARES.
(5) Subject to the provisions of these Regulations the unissued shares of
the Company (whether forming part of the original or any increased authorised
capital) shall be at the disposal of the Manager who may offer, allot, grant
options over or otherwise dispose of them to such persons at such times and for
such consideration and upon such terms and conditions as the Manager may
determine consistent with these Regulations.
(6) No share shall be issued except as fully paid up.
(7) The name and address of every person being the holder of registered
nominative shares, their class or series and the date when they became or ceased
to become a Member shall be entered in the Register of Members.
(8) Every person whose name is entered as a Member in the Register of
Members being the holder of registered nominative shares, may request, and the
Company shall issue thereto, a certificate specifying the share or shares held
and the par value thereof, provided that in respect of a registered nominative
share, or shares, held jointly by several persons the Company shall not be bound
to issue more than one certificate, and delivery of a certificate for a share to
one of several joint holders shall be sufficient delivery to all.
(9) Any Member receiving a share certificate shall indemnify and hold the
Company and the Manager harmless from any loss or liability which it or they may
incur by reason of wrongful or fraudulent use or representation made by any
person by virtue of the possession of such certificate. If a certificate is
worn-out or lost it may be renewed on production of the worn-out certificate,
or on satisfactory proof of its loss together with such indemnity as the Manager
may require.
SHARE CAPITAL AND VARIATION OF RIGHTS.
(10) Without prejudice to any special rights previously conferred on the
holders of any existing shares or class of shares, any share in the Company may
be issued with such preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of capital or
otherwise as the Manager may from time to time determine.
(10A) The Company may from time to time, by Special Resolution, increase
the share capital by such sum to be divided into shares of such amount as the
Special Resolution shall prescribe.
(11) Subject to the provisions of Section 198 of the Ordinance, shares may
be issued on terms that they are liable to be redeemed on such terms as the
Manager before the issue of the shares may determine. The Manager may but is not
obliged to require the passing of a special resolution to make such alterations
to these Regulations as may be necessary to specify the terms on which and the
manner in which such shares shall be redeemed and the rights and restrictions
attaching thereto.
(12) If at any time the authorised share capital is divided into different
classes or series of shares other than those provided for in the Memorandum of
Association as initially executed, the rights attached to any existing class or
series (unless otherwise provided by the terms of issue of the shares of that
class or series) may only be varied or abrogated with the consent in writing of
the Members holding interests aggregating to two thirds of the issued shares or
series of shares which may be affected by such variation or with the sanction of
a separate general meeting of the holders of shares so affected. To every such
general meeting the provisions of these Regulations relating to General Meetings
shall apply but so that the necessary quorum shall be two persons holding or
representing by proxy two thirds of the issued shares or series of shares so
affected.
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(13) The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.
The holders of the shares of any class shall not have any preemptive right to
purchase or subscribe for any shares of the Company unless expressly provided by
the terms of the issue of the shares of that class.
REGISTRATION OF MEMBERS.
(14) The Company shall keep in one or more books a Register of its Members
and shall enter therein the following particulars, that is to say:
(a) the name and address of each Member, the number of shares held by
him and the amount paid or agreed to be considered to be paid on such
shares;
(b) the date on which each person was entered in the Register of
Members; and
(c) the date on which any person ceased to be a Member.
CESSATION OF MEMBERSHIP OF COMMON SHAREHOLDERS.
(15) A Common Shareholder ceases to be a Member of the Company upon the
happening of any one or more of the following events:
(a) the death, bankruptcy, insanity, retirement, resignation,
withdrawal, expulsion, termination, cessation or dissolution of such Common
Shareholder;
(b) if such Common Shareholder makes any assignment for the benefit of
his creditors or files a petition voluntarily for bankruptcy under the laws
of any country or files a petition seeking for himself any arrangement,
re-organisation, amalgamation, composition, re-adjustment, liquidation,
dissolution or similar relief under any law or regulation;
(c) if such Common Shareholder files an answer or other pleading
admitting or failing to contest the material allegation of a petition filed
against him in any proceedings of a nature described in the immediately
preceding paragraph of this Regulation;
(d) if such Common Shareholder seeks, consents to, or acquiesces in
the appointment of a trustee, receiver or liquidator of himself or all or
a substantial part of his properties;
(e) any proceedings of a nature mentioned in the foregoing paragraphs
of this Regulation occurs without the consent of such Common Shareholder
and is not dismissed or vacated within 120 days;
(f) if such Common Shareholder attempts to make a Transfer of his
share in breach of the provisions of these Regulations.
TRANSFER AND TRANSMISSION OF SHARES.
(16) The Transfer of any Common Shares in the Company is prohibited
absolutely.
(17) Any Transfer of any Common Shares or other interest in the Company
shall not, save as is mentioned in Regulation 51 be effective to transfer to any
transferee thereof any rights conferred on a Member including but not limited to
rights to receive Notice of or attend meetings of the Company to vote on any
matter, to receive dividends, or to receive a share of the net assets of the
Company upon its dissolution and winding up.
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GENERAL MEETINGS.
(18) The Manager may convene a general meeting of the Company for the
purpose of considering and if thought fit passing of a Special Resolution to:
(a) alter the Memorandum and Articles of Association of the Company;
or
(b) require the Company to be dissolved and wound up.
(19) Fourteen days Notice in writing of a general meeting shall be given to
each of the Members entitled to vote at such meeting and mailed to each Member
entitled to vote at his address as registered in the Register of Members by air
mail (if appropriate) and such Notice shall state the time, place and as far as
practicable the objects of the Meeting.
(20) The accidental omission to give Notice of a meeting to or the
non-receipt of Notice of a meeting by any person entitled to receive Notice
shall not invalidate the proceedings at that meeting.
(21) A meeting of the Company shall, notwithstanding that it is called by
shorter Notice than that specified in these Regulations, be deemed to have been
properly called if it is so agreed by all the Members entitled to attend and
vote thereat.
PROCEEDINGS AT GENERAL MEETINGS.
(22) (a) The Manager shall preside at any general meeting of the Company.
(b) At any general meeting of the Company one or more Members entitled
to vote present in person or representing in person or by proxy in
excess of 50% of the outstanding voting shares of the capital stock of
the Company shall form a quorum for the transaction of business; if
within half an hour from the time appointed for the meeting a quorum
is not present, the meeting shall stand adjourned to the following day
at the same time as the Manager may determine.
(c) The Manager may, with the consent of any meeting at which a quorum
is present (and shall if so directed by the meeting), adjourn the
meeting from time to time and from place to place, and only the
business left unfinished at the meeting from which the Members present
in person or represented by proxy have adjourned shall be dealt with.
It shall not be necessary to give any notice of the adjourned meeting
or of the business to be transacted at the adjourned meeting; save and
except for a meeting adjourned sine die, when Notice of the adjourned
meeting shall be given as in the case of an original meeting.
(23) (a) Subject to any rights or restrictions lawfully attached to any
class of shares, at any Meeting of the Company each Member shall be
entitled to one vote for each share held by him and such vote may be
given in person or by proxy.
(b) At any meeting of the Company any question proposed for the
consideration of the Members shall be decided on a simple majority of
the votes of Members entitled to vote and such majority shall be
ascertained in accordance with the provisions of these Regulations.
(c) At any meeting of the Company a declaration by the Manager that a
question proposed for consideration has, on a show of hands, been
carried, or carried unanimously or by a particular majority or lost
and an entry to that effect in a book containing the minutes of the
proceedings of the Company shall be conclusive evidence of that fact
without proof of the number or proportion of the votes recorded in
favour of or against such question.
(24) When a vote is taken by ballot each Member entitled to vote shall be
furnished with a ballot paper on which he shall record his vote in such manner
as shall be determined at the meeting having regard to the nature of the
question on which the vote is taken; and each ballot paper shall be signed or
initialled or otherwise marked so as to identify the voter. At the conclusion of
the ballot the ballot paper
4
shall be examined by the Manager with assistance of a Member appointed for the
purpose, and the result of the ballot shall be declared by the Manager.
(25) An instrument appointing a proxy shall be in writing under the hand of
a Member or his attorney duly authorised in writing or, if the Member is a
corporation either under seal or under the hand of an officer or attorney of the
corporation duly authorised, and shall be in the Form B hereunder or such other
form as the Members may from time to time approve:
"FORM B
__________________________________________________________________________ LLC
PROXY
I/WE _________________________________________________________
of _________________________________________________________ the holder of
shares in the above
named Company
hereby appoint _________________________________________________________ of
or failing him
of
or
failing him _________________________________________________________ of
as my/our
proxy to vote on my/our behalf at the
_________________________________________________________ general
meeting of the Company to be held on the ________ day of
______________________________19________, and at any adjournment thereof.
Dated this ________ day of
_____________________________________________
19________
Signed by the above named
_________________________________________________________
in the presence of
_________________________________________________________
Witness
_______________________________________________________"
5
(26) Any corporation which is a Member of the Company may by resolution of
its Directors authorise such persons as it thinks fit to act as its
representative at any meeting of the Members of the Company and the person so
authorised shall be entitled to exercise the same powers on behalf of the
corporation which he represents as that corporation could exercise if it were an
individual Member of the Company.
MINUTES.
(27) The Manager shall cause minutes to be duly entered in books provided
for the purpose of all resolutions and proceedings of each meeting of the
Company, provided that any minute of such meeting, if purporting to be signed by
the Manager shall be sufficient evidence of the proceedings without any further
proof of the facts therein stated, and further provided that when all the
Members entitled to vote in person or by proxy sign the minutes of meeting, the
same shall be deemed to have been duly held, notwithstanding that the Members
have not actually come together or that there may have been technical defects in
the proceedings, and a resolution in writing in one or more parts signed by all
the Members entitled to vote shall be as valid and effectual as if it has been
passed at a meeting duly called and constituted.
MANAGER.
(28) There shall be no directors of the Company. The business of the
Company shall be managed and conducted by the Manager who shall have the
following powers and duties:
(a) to pay commissions conferred or permitted by the Ordinance on the
sale and allotment of shares;
(b) to call meetings;
(c) to issue and allot shares;
(d) to pay all expenses occurred in forming and registering the
Company;
(e) to manage and supervise the affairs of the Company;
(f) to borrow money on behalf of the Company and to mortgage or charge
all or any part of its undertaking property and assets both present and
future including uncalled capital and to issue debenture, debenture stock
and other securities whether outright or as collateral security for any
debt liability or obligation of the Company;
(g) to declare and pay dividends on shares;
(h) to set aside out of profits any amount which shall in the
discretion of the Manager be required as a reserve or reserves;
(i) to redeem or repurchase on behalf of the Company shares which may
be redeemed or repurchased on behalf of the Company;
(j) to appoint officers, attorneys and agents on behalf of the
Company;
(k) to act as liquidator or appoint a liquidator if the Company is
dissolved pursuant to Regulation 52;
(l) to execute all documents on behalf of and in the name of the
company;
(m) to institute, bring, prosecute and defend proceedings in the name
of the Company;
6
(n) to perform such other duties and to exercise such powers as are
not by Regulation 18 required to be performed by the Company in general
meetings or by Regulation 55 required to be performed by former Common
Shareholders.
(29) A Manager of the Company may hold other office or place of profit with
the Company and may be paid such extra remuneration therefor whether by way of
salary commission participation of profits or otherwise.
(30) Any contract or arrangement between the Manager and the Company may
contain provisions giving security and indemnity to the Manager for money lent
or obligations undertaken for the benefit of the Company and may contain terms
customarily found in agreements with beneficial (as opposed to fiduciary) owners
of property and the Manager shall not be liable for breach of fiduciary duties
by virtue of such provisions if in all the circumstances a prudent man of
business would accept such a provision.
(31) A Manager may be party to or otherwise interested in any transaction
or arrangement with the Company or in which the Company is otherwise interested
and shall not by reason of occupying the office of Manager be accountable to the
Company for any benefit which he derives from any such office or from any such
transaction or arrangement and no such transaction or arrangement shall be
avoidable on the grounds of such interest or benefit.
(32) The Manager may delegate any of the Manager's powers and duties to
other persons and any such delegation may be made subject to any conditions the
Manager may impose and either collaterally with or to the exclusion of the
powers of the Manager and any such delegation be revoked or altered.
(33) The Company will be treated as a partnership for U.S. federal income
tax purposes, and the Manager will serve as the "Tax Matters Partner" as that
term is defined in the U.S. Internal Revenue Code. The Company will adopt a
convention for U.S. federal income tax purposes under which all of the income
accrued by the Company in any calendar month will be allocated and distributed
to shareholders of record, including Preferred Shareholders, on the last day of
the month.
(34) The Manager will at all times retain common shares of the Company
representing, in its judgment, at least twenty one percent (21%) of the total
value of the Company.
(35) The Manager may be paid for all travelling, hotel and other expenses
in connection with attendances at any meeting of the Company or otherwise in
connection with the discharge of the Manager's duties.
OFFICERS.
(36) The Manager will be entitled to appoint any of its officers and
directors to perform any of the rights or duties of the Manager set out in these
Regulations;
(37) The Manager will appoint such officers of the Company as is required
pursuant to the rights of Preferred Shareholders, or other shareholders, under
the terms of shares issued by the Company.
CUSTODIAN.
(38) The Manager may appoint a custodian or trustee for the safe keeping of
all moneys, assets and securities of the Company with such powers and duties in
respect thereof as may be specified in such appointment and such custodian or
trustee shall be subject to audit by the Auditors of the Company.
7
DIVIDENDS.
(39) The Manager may declare dividends to be paid to the Members, in
proportion to their shares, out of the surplus or profits including unrealised
profits of the Company.
(40) The Manager may from time to time before declaring a dividend set
aside out of the surplus or profits of the Company such sums as they think
proper as a reserve fund to be used to meet contingencies or for equalising
dividends or for any other special purpose.
(41) To the extent that there are profits available for distribution in any
accounting period, preferential dividends, (including preferential dividends
which may have fallen in arrears), shall be paid to the Preferred Shareholders
in accordance with the terms of the issue of the Preferred Shares.
(42) The surplus or profits of the Company which the Manager shall from
time to time declare to be distributable in respect of any accounting period
shall be applied first in payment to the Preferred Shareholders of preferential
dividends payable on the Preferred Shares.
(43) For the purpose of determining the amount of profit available for
distribution, all expenses of the Company shall be allocated to, and reduce the
amounts distributable to, Common Shareholders. To the extent that such profits
are available for distribution to Members of the Company, the portion of such
amounts distributable to Preferred Shareholders shall be determined without
regard to any expenses of the Company.
(44) The Manager is authorised and empowered to lend to any officer or
Member of the Company any sum or sums of money without restriction as to amount
upon such terms and conditions as the Manager in its absolute discretion may
determine.
ACCOUNTS AND FINANCIAL STATEMENTS.
(45) The Manager shall cause true accounts to be kept of all transactions
of the Company in such manner as to show the assets and liabilities of the
Company for the time being.
(46) The financial year end of the company shall be determined by the
Manager and failing such determination the financial year end shall be 31st
December.
(47) Each Member may demand and shall receive from the Manager true and
full information regarding the state of the business and financial condition of
the Company.
(48) An independent representative of the Members may be appointed by the
Manager as Auditor of the Accounts of the Company and such Auditor shall hold
office until the Manager shall appoint another Auditor. Such Auditor may be a
Member but the Manager of the Company shall not during his continuance in office
be eligible as an Auditor of the Company.
(49) The duties and remuneration of the Auditor shall be fixed by the
Manager or in such manner as the Manager may determine.
FORMER MEMBERS.
(50) A Common Shareholder who ceases to be a Member by virtue of Regulation
15:
(a) if the event causes the Company to be in dissolution shall have
the rights of a Former Member upon winding up of the Company;
(b) if the event does not cause the Company to be in dissolution shall
have the rights set out in Regulation 51.
(51) The rights of a Common Shareholder such as is mentioned in Regulation
17 or Regulation 50 shall be an entitlement solely, to receive an amount equal
to the book value of the relevant Common
8
Shareholder's, share or other interest in the Company as determined in good
faith by the Manager and if such payment is not made within 90 days then the
Company shall be deemed be in dissolution under Regulation 52.
DISSOLUTION AND WINDING UP.
(52) The Company shall be considered to have commenced voluntary winding up
and dissolution automatically and without the requirement of any other act:
(a) when the period fixed for the duration of the Company expires; or
(b) if the Common Shareholders of the Company pass a special
resolution requiring the Company to be wound up and dissolved; or
(c) upon the bankruptcy, death, insanity, retirement, resignation,
withdrawal, expulsion, termination, cessation, or dissolution of the
Manager under U.S. law.
(53) On dissolution and winding up of the Company, the balance of the
assets available for distribution and subject to any special rights or restric-
tions attaching to any class of shares shall be applied in paying to the Former
Members who were Members immediately preceding the commencement of dissolution
and winding up of the Company the amounts paid up on the shares held by them and
the surplus shall belong to such Former Members according to the respective
number of shares held by them.
(54) As between the Common Shareholders and the Preferred Shareholders, the
expenses incurred in the establishment and maintenance of the Company and in
conducting the Company's business shall not be deducted in determining what
assets are available for distribution.
CONTINUANCE.
(55) If the Company is in dissolution solely by virtue of Regulation 52(a),
then the dissolution and winding up may be discontinued by the unanimous
resolution of all the Common Shareholders who were Members immediately preceding
the commencement of dissolution and winding up passed within 30 days of the
occurrence of the event or the first event if more than one which resulted in
the dissolution and on the passing of such resolution the Company shall continue
to exist as if the dissolution and winding up had never occurred.
LIQUIDATOR.
(56) When the Company is in dissolution solely by virtue of Regulation 52,
the Manager, if there is one, shall act as liquidator unless and until the
majority of the Common Shareholders who were Members immediately preceding the
commencement of dissolution and winding up by majority vote appoint a liquid-
ator to replace the Manager.
NOTICES.
(57) Unless otherwise herein or by law expressly provided, a Notice may be
served by the Company on any Member either personally or by telex or cable to
his registered address or by sending it using air mail (if appropriate) through
the post prepaid in an envelope addressed to such Member at his address as
registered in the Register of Members.
(58) Any Notice required to be given to the Members shall with respect to
any shares held jointly by two or more persons be given to all such persons.
9
(59) Any Notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission, and in proving
such service it shall be sufficient to prove that the Notice was properly
addressed and prepaid, if posted, and the time when it was posted or transmitted
by telex or to the cable Company as the case may be.
SEAL OF THE COMPANY.
(60) The Seal of the Company shall not be affixed to any instrument except
over the signature of the Manager and the Secretary or by some person appointed
by the Manager, provided that the Secretary may affix the Seal of the Company
over his signature only to any authenticated copies of these Regulations, the
Memorandum and Articles of Association, the minutes of any meetings or any other
document required to be authenticated by him and to any instrument which the
Manager have specifically approved beforehand.
ALTERATION OF REGULATIONS.
(61) No Regulation shall be rescinded, altered or amended, and no new
Regulation shall be made until the same has been proposed and passed as a
Special Resolution at a general meeting duly convened.
10
EXHIBIT 4.1
CERTIFICATION OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
TEXACO CAPITAL LLC
CUMULATIVE ADJUSTABLE RATE MONTHLY INCOME PREFERRED SHARES,
SERIES B
June 8, 1994
CERTIFICATION OF DESIGNATION OF RIGHTS AND PREFERENCES
OF TEXACO CAPITAL LLC CUMULATIVE ADJUSTABLE RATE
MONTHLY INCOME PREFERRED SHARES, SERIES B
The undersigned, Shelly Faber, the Assistant
Treasurer and R.E. Koch, the Assistant Secretary, of Texaco
Inc. which acts as Manager of Texaco Capital LLC, a limited
life company organized under the laws of the Turks and
Caicos Islands (the "Company"), DO HEREBY CERTIFY:
1. That by duly adopted resolutions of the
holders of Common Stock of the Company dated October 21,
1993, the Company authorized the issuance of up to
24,000,000 shares of Cumulative Adjustable Rate Monthly
Income Preferred Shares (the "Preferred Shares"), and
pursuant to authority conferred upon the Manager as herein
below set forth; and
2. That by duly adopted resolutions of the
Manager dated June 8, 1994, the Manager, pursuant to
authority granted to it in the Articles of Association of
the Company (the "Articles of Association"), authorized the
creation, sale and issuance of a series of shares of
preferred stock having such designations, stated value,
rights, privileges, restrictions, preferences and other
terms and provisions as the Manager may authorize or approve
as herein below set forth:
RESOLVED, that pursuant to the Articles of
Association of the Company, the Manager hereby authorizes
the issuance of a series of Preferred Shares, $25 par value,
of the Company and hereby fixes the number, voting powers,
designation, preferences, and relative, participating,
optional or other special rights and the qualifications,
limitations or restrictions of, and other matters relating
to, said series as follows:
Cumulative Adjustable Rate Monthly Income
Preferred Shares, Series B
1. Designation. Up to 5,175,000 shares of the
Preferred Shares of the Company are hereby constituted as a
series of Preferred Stock, $25 par value, designated as
"Cumulative Adjustable Rate Monthly Income Preferred Shares,
Series B" (hereinafter called the "Series B Preferred
Shares").
2. Ranking. The Series B Preferred Shares shall,
with respect to dividend rights and rights on liquidation,
dissolution or winding up, rank (i) pari passu with any
other series of Preferred Shares issued by the Company and
(ii) prior to any other equity securities of the Company,
including the common stock, par value $1.00 per share
("Common Stock").
3. Dividends. (a) The holders of the Series B
Preferred Shares shall be entitled to receive, when and as
declared by the Company out of funds held by the Company and
legally available therefor, cumulative cash dividends at the
rate of 6.40% of the liquidation preference of $25 per share
per annum for the initial period from the date of original
issuance to September 30, 1994, and thereafter at the
"Applicable Rate" (as defined below), which will be adjusted
quarterly and calculated on the basis of a 360 day year
composed of 12 months of 30 days each, and for any period
shorter than a full monthly dividend period, dividends will
be computed on the basis of the actual number of days
elapsed in such period, and payable monthly in arrears on
the last day of each calendar month of each year, commencing
June 30, 1994. Such dividends will accrue and be cumulative
whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Company
legally available for the payment of dividends. Dividends
on the Series B Preferred Shares shall be cumulative from
the date of original issue, and the cumulative portion from
such date to June 30, 1994 shall be payable on June 30,
1994. In the event that any date on which dividends are
payable on the Series B Preferred Shares is not a day on
which banks in The City of New York are open for business
and on which foreign exchange dealings may be conducted in
The City of New York (a "Business Day"), then payment of the
dividend payable on such date will be made on the next
succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date.
(b) Dividends on the Series B Preferred Shares
will be declared by the Company in any calendar year or
portion thereof to the extent that the Company reasonably
anticipates that at the time of payment it will have, and
will be paid by the Company to the extent that at the time
of proposed payment it has, (x) earnings legally available
for the payment of such dividends and (y) cash in hand
sufficient to permit such payments (excluding any cash
received as a payment or prepayment of, or of interest on,
the Loans made by the Company to Texaco Inc. pursuant to
Loan Agreements dated October 27, 1993 (the "Prior Loans").
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For purposes of the Series B Preferred Shares, the
undertaking by the Company to pay dividends if it has "cash
in hand sufficient to permit such payments" shall be
applicable only to the extent it has cash in hand, other
than any cash received as a payment or prepayment of, or of
interest on, the Prior Loans, sufficient to make dividend
payments on the Series B Preferred Shares. If dividends can
be paid only in part on the Series B Preferred Shares in any
calendar year or portion thereof as a result of the lack of
sufficient funds legally available for the payment of
dividends, then such partial dividends shall be paid on the
respective dividend payment dates on a pro rata basis to
holders of such Series B Preferred Shares. If at any time
dividends on Series B Preferred Shares are in arrears for
any monthly dividend period, any dividend payments in
respect thereof must be applied in respect of all dividend
periods in arrears, pro rata in accordance with the
respective amounts in arrears for each such period in equal
amounts for each such period.
(c) Except as provided below in this paragraph,
the "Applicable Rate" for any quarter (other than the
initial period) will be equal to 88% of the Effective Rate
(as defined below), but not less than 4.50% per annum nor
more than 10.50% per annum. The "Effective Rate" for any
quarter will be equal to the highest of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate (each as defined below) for such
quarter. The Applicable Rate will be rounded to the nearest
five hundredth of a percent. In the event that the Company
determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate cannot be determined for any quarter,
then the Effective Rate for such quarter will be equal
to the higher of whichever two of such rates can be so
determined;
(ii) only one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for such quarter will be equal to
whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for the preceding quarter will be
continued for such quarter.
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Except as described below in this paragraph, the
"Treasury Bill Rate" for each quarter will be the arithmetic
average of the two most recent weekly per annum secondary
market discount rates (or the one weekly per annum secondary
market discount rate, if only one such rate is published
during the relevant Calendar Period (as defined below)) for
three-month U.S. Treasury bills, as published weekly by the
Federal Reserve Board (as defined below) during the Calendar
Period immediately preceding the last ten calendar days
preceding the quarter for which the dividend rate on the
Series B Preferred Shares is being determined. In the event
that the Federal Reserve Board does not publish such a
weekly per annum secondary market discount rate during any
such Calendar Period, then the Treasury Bill Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum secondary market discount rates (or
the one weekly per annum secondary market discount rate, if
only one such rate is published during the relevant Calendar
Period) for three-month U.S. Treasury bills, as published
weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected
by the Company. In the event that a per annum secondary
market discount rate for three-month U.S. Treasury bills is
not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate for
such quarter will be the arithmetic average of the two most
recent weekly per annum secondary market discount rates (or
the one weekly per annum secondary market discount rate, if
only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having
remaining maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the
Federal Reserve Board, or if the Federal Reserve Board does
not publish such rates, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the
Company. In the event that the Company determines in good
faith that for any reason no such U.S. Treasury bill rates
are published as provided above during such Calendar Period,
then the Treasury Bill Rate for such quarter will be the
arithmetic average of the per annum secondary market
discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-
interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if
daily quotations are not generally available) to the Company
by at least three recognized dealers in U.S. Government
securities selected by the Company. In the event that the
Company determines in good faith that for any reason the
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Company cannot determine the Treasury Bill Rate for any
quarter as provided above in this paragraph, the Treasury
Bill Rate for such quarter will be the arithmetic average of
the per annum secondary market discount rates based upon the
closing bids during such Calendar Period for each of the
issues of marketable interest-bearing U.S. Treasury
securities with a remaining maturity of not less than 80 nor
more than 100 days, as chosen and quoted daily for each
business day in New York City (or less frequently if daily
quotations are not generally available) to the Company by at
least three recognized dealers in U.S. Government securities
selected by the Company.
Except as described below in this paragraph, the
"Ten Year Constant Maturity Rate" for each quarter will be
the arithmetic average of the two most recent weekly per
annum Ten Year Average Yields (as defined below) (or the one
weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the
Calendar Period immediately preceding the last ten calendar
days preceding the quarter for which the dividend rate on
the Series B Preferred Shares is being determined. In the
event that the Federal Reserve Board does not publish such a
weekly per annum Ten Year Average Yield during such Calendar
Period, then the Ten Year Constant Maturity Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum Ten Year Average Yields (or the one
weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as
published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Company. In the event that a per annum Ten
Year Average Yield is not published by any Federal Reserve
Bank or by any U.S. Government department or agency during
such Calendar Period, then the Ten Year Constant Maturity
Rate for such quarter will be the arithmetic average of the
two most recent weekly per annum average yields to maturity
(or the one weekly per annum average yield to maturity, if
only on such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special
Securities (as defined below) then having remaining
maturities of not less than eight nor more than twelve
years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board does
not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the
Company. In the event that the Company determines in good
faith that for any reason the Company cannot determine the
Ten Year Constant Maturity Rate for any quarter as provided
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above in this paragraph, then the Ten Year Constant Maturity
Rate for such quarter will be the arithmetic average of the
per annum average yields to maturity based upon the closing
bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date not less than eight or more than twelve years
from the date of each such quotation, as chosen and quoted
daily for each business day in New York City (or less
frequently if daily quotations are not generally available)
to the Company by at least three recognized dealers in U.S.
Government securities selected by the Company.
Except as described below in this paragraph, the
"Thirty Year Constant Maturity Rate" for each quarter will
be the arithmetic average of the two most recent weekly per
annum Thirty Year Average Yields (as defined below) (or the
one weekly per annum Thirty Year Average Yield, if only one
such yield is published during the relevant Calendar
Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the last
ten calendar days preceding the quarter for which the
dividend rate on the Series B Preferred Shares is being
determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum Thirty Year Average
Yield during such Calendar Period, then the Thirty Year
Constant Maturity Rate for such quarter will be the
arithmetic average of the two most recent weekly per annum
Thirty Year Average Yields (or the one weekly per annum
Thirty Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published
weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected
by the Company. In the event that a per annum Thirty year
Average Yield is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government
department or agency during such Calendar Period, then the
Thirty Year Constant Maturity Rate for such quarter will be
the arithmetic average of the two most recent weekly per
annum average yields to maturity (or the one weekly per
annum average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of
the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) then having
remaining maturities of not less than twenty-eight nor more
than thirty-two years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Company. In the event that the Company
determines in good faith that for any reason the Company
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cannot determine the Thirty Year Constant Maturity Rate for
any quarter as provided above in this paragraph, then the
Thirty Year Constant Maturity Rate for such quarter will be
the arithmetic average of the per annum average yields to
maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than
twenty-eight nor more than thirty-two years from the date of
each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily
quotations are not generally available) to the Company by at
least three recognized dealers in U.S. Government securities
selected by the Company.
The Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate
will each be rounded to the nearest one hundredth of a
percent.
The Applicable Rate with respect to each quarter
(other than the initial period) will be calculated as
promptly as practicable by the Company according to the
appropriate method described above. The Company will cause
each Applicable Rate to be published in a newspaper of
general circulation in New York City before the commencement
of the quarter to which it applies and will cause notice of
such Applicable Rate to be given to The Depository Trust
Company ("DTC"), New York, NY, the securities depository for
the Series B Preferred Shares.
As used above, the term "Calendar Period" means a
period of fourteen calendar days; the term "Federal Reserve
Board" means the Board of Governors of the Federal Reserve
System; the term "Special Securities" means securities which
can, at the option of the holder, be surrendered at face
value in payment of any Federal estate tax or which provide
tax benefits to the holder and are priced to reflect such
tax benefits or which were originally issued at a deep or
substantial discount; the term "Ten Year Average Yield"
means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years); and the term
"Thirty Year Average Yield" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of
thirty years).
(d) If dividends have not been paid in full on
the Series B Preferred Shares, the Company shall not:
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(i) pay, or declare and set aside for payment,
any dividends on any other preferred or preference
stock of the Company ranking pari passu with the Series
B Preferred Shares as regards participation in profits
of the Company ("Company Dividend Parity Shares"),
unless the amount of any dividends declared on any
Company Dividend Parity Shares is paid on the Company
Dividend Parity Shares and the Series B Preferred
Shares on a pro rata basis on the date such dividends
are paid on such Company Dividend Parity Shares, so
that
(x) (A) the aggregate amount of dividends
paid on the Series B Preferred Shares bears to (B)
the aggregate amount of dividends paid on such
Company Dividend Parity Shares the same ratio as
(y) (A) the aggregate of all accumulated
arrears of unpaid dividends in respect of the
Series B Preferred Shares bears to (B) the
aggregate of all accumulated arrears of unpaid
dividends in respect of such Company Dividend
Parity Shares;
(ii) pay, or declare and set aside for payment,
any dividends on any shares of the Company ranking
junior to the Series B Preferred Shares as to dividends
("Company Dividend Junior Shares"); or
(iii) redeem, purchase or otherwise acquire any
Company Dividend Parity Shares or Company Dividend
Junior Shares;
until, in each case, such time as all accumulated arrears of
unpaid dividends on the Series B Preferred Shares shall have
been paid in full for all dividend periods terminating on or
prior to, in the case of clauses (i) and (ii), such payment,
and in the case of clause (iii), the date of such
redemption, purchase or acquisition.
4. Mandatory Redemption. Upon any prepayment or
repayment of principal on the loans, made pursuant to the
Preferred Stock Loan Agreement dated June 8, 1994 and the
Common Stock Loan Agreement dated June 8, 1994, to Texaco
Inc. of the proceeds from the issuance of Series B Preferred
Shares and from the sale of the Common Stock (the "Loans"),
or upon any prepayment or repayment of any reloan of any
such proceeds as described below, such proceeds shall be
applied to redeem the Series B Preferred Shares at the
redemption price of $25 per share, plus accrued and unpaid
dividends; provided that any amounts may be lent or relent
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to Texaco Inc., and not used for redemption, if at the time
of each such new loan, and as determined in the judgment of
the Manager and its financial advisor, (a) Texaco Inc. is
not in bankruptcy, (b) Texaco Inc. is not in default on any
loan pertaining to Preferred Shares of any series ranking
pari passu with the Series B Preferred Shares, (c) Texaco
Inc. has timely made monthly payments on the repaid loan or
prepaid loan for the immediately prior 18 months, (d) the
Company is not in arrearage on payments of dividends on the
Series B Preferred Shares, (e) Texaco Inc. is expected to be
able to make timely payment of principal and interest on the
loan, (f) such loan is being made on terms, and under
circumstances, that are consistent with those which a lender
would require for a loan to an unrelated party, (g) such
loan is being made at a rate sufficient to provide payments
equal to or greater than the amount of dividend payments
required under the Series B Preferred Shares, (h) the senior
unsecured long-term debt of Texaco Inc. is rated among the
four highest categories by a nationally recognized rating
organization or, in the event of changes in those
categories, such subsequent categories as shall then be
applicable, (i) such loan is being made for a term that is
consistent with market circumstances and Texaco Inc.'s
financial condition, and that is in no event more than 30
years, and (j) in any event, the final maturity of such loan
shall not be later than the fiftieth anniversary of the
issuance of the Series B Preferred Shares. No new loan
shall be permissible on or after the fiftieth anniversary of
the issuance of the Series B Preferred Shares.
5. Optional Redemption. (a) The Series B
Preferred Shares are redeemable, at the option of the
Company subject to the prior consent of Texaco Inc., in
whole or in part from time to time, on or after June 30,
1999, upon not less than 30 nor more than 60 days' notice,
at the redemption price of $25, plus accrued and unpaid
dividends to the date fixed for redemption.
(b) Notwithstanding subparagraph 5(a) above, if
at any time after the issuance of the Series B Preferred
Shares the Company or Texaco Inc. is or would be required to
pay Additional Amounts or would be required to withhold or
deduct certain amounts as described under paragraph 9 or
under the Payment and Guarantee Agreement by Texaco Inc. for
the benefit of holders of the Series B Preferred Shares (the
"Guarantee"), then, subject to the prior consent of Texaco
Inc., the Company may, at its option, upon not less than 30
nor more than 60 days' notice to the holders of the Series B
Preferred Shares (which notice shall be irrevocable), redeem
the Series B Preferred Shares in whole (or, if such
requirement relates to only certain of the Series B
9
Preferred Shares, the Series B Preferred Shares subject to
such requirement) at the liquidation preference of $25 per
share plus accrued and unpaid dividends to the date fixed
for redemption, whether or not declared.
6. Redemption Procedure. (a) Notice of any
redemption (a "Notice of Redemption") of the Series B
Preferred Shares will be given by the Company by mail to
each record holder to be redeemed not fewer than 30 nor more
than 60 days prior to the date fixed for redemption thereof.
For purposes of the calculation of the date of redemption
and the dates on which notices are given pursuant to this
paragraph 6(a), a Notice of Redemption shall be deemed to be
given on the day such notice is first mailed by first class
mail, postage prepaid, to holders of record of the Series B
Preferred Shares. Each Notice of Redemption shall be
addressed to the holder of record at the address of the
holder appearing in the stock register of the Company. No
defect in the Notice of Redemption or in the mailing thereof
or publication of its contents shall affect the validity of
the redemption proceedings.
(b) In the event that fewer than all the
outstanding Series B Preferred Shares are to be redeemed,
the Series B Preferred Shares to be redeemed (i) in the case
of an optional redemption pursuant to paragraph 5(a), will
be selected in accordance with paragraph 10 and (ii) in the
case of an optional redemption pursuant to paragraph 5(b),
will be such Series B Preferred Shares as were subject to
the requirement that Additional Amounts be paid, or that
amounts be withheld or deducted, in respect thereof. The
Company will not redeem fewer than all the outstanding
Series B Preferred Shares unless all accumulated arrears of
unpaid dividends have been paid on all Series B Preferred
Shares for all monthly dividend periods terminating on or
prior to the date of redemption.
(c) If the Company gives a notice of redemption
in respect of Series B Preferred Shares, then, by 12:00
noon, New York time, on the redemption date, the Company
will irrevocably deposit with The Depository Trust Company
funds sufficient to pay the applicable redemption price,
including an amount equal to accumulated arrears and
accruals of unpaid dividends (whether or not declared) to
the date fixed for redemption, and will give The Depository
Trust Company irrevocable instructions and authority to pay
the redemption price to the holders thereof. If notice of
redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of
holders of such Series B Preferred Shares so called for
redemption will cease, except the right of the holders of
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such shares to receive the redemption price, plus
accumulated arrears and accruals of unpaid dividends, if
any, but without interest, and such shares will cease to be
outstanding. In the event that any date on which any
payment in respect of the redemption of the Series B
Preferred Shares is not a Business Day, then payment of the
redemption price payable on such date will be made on the
next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day. In the event that payment of the redemption
price in respect of Series B Preferred Shares is improperly
withheld or refused and not paid either by the Company or by
Texaco Inc. pursuant to the Guarantee, dividends on such
shares will continue to accrue, at the then Applicable Rate,
from the redemption date to the date of payment of such
redemption price.
7. Liquidation Distribution. In the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of the Series B Preferred
Shares at the time outstanding will be entitled to receive
out of the assets of the Company available for distribution
to stockholders, before any distribution of assets is made
to holders of common shares or any other class of shares of
the Company ranking junior to the Series B Preferred Shares
as regards participation in assets of the Company, but
together with the holders of every other series of preferred
or preference stock of the Company outstanding, if any,
ranking pari passu with the Series B Preferred Shares as
regards participation in the assets of the Company ("Company
Liquidation Parity Shares"), an amount equal, in the case of
the holders of the Series B Preferred Shares, to the
aggregate of the liquidation preference of $25 per Series B
Preferred Share and all accumulated arrears and accruals of
unpaid dividends (whether or not declared) to the date of
payment (the "Liquidation Distribution"). If, upon any such
liquidation, the Liquidation Distributions can be paid only
in part because the Company has insufficient assets
available to pay in full the aggregate Liquidation
Distributions and the aggregate maximum Liquidation
Distributions on the Company Liquidation Parity Shares, then
the amounts payable directly by the Company on the Series B
Preferred Shares and on such Company Liquidation Parity
Shares shall be paid on a pro rata basis, so that
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Series B Preferred Shares bears to
(y) the aggregate amount paid as Liquidation
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Distributions on the Company Liquidation Parity Shares
the same ratio as
(ii) (x) the aggregate Liquidation Distributions
bears to (y) the aggregate maximum Liquidation
Distributions on the Company Liquidation Parity Shares.
8. Voting Rights. If (i) the Company fails to
pay dividends in full on the Series B Preferred Shares for
18 consecutive monthly dividend periods or (ii) Texaco Inc.
breaches any of its obligations under the Loans or Texaco
Inc. breaches any of its obligations under the Guarantee,
then the holders of outstanding Series B Preferred Shares,
together with the holders of any other shares of preferred
or preference stock of the Company having the right to vote
for the appointment of a trustee in such event, acting as a
single class, will be entitled, by ordinary resolution
passed by the holders of a majority in liquidation
preference (plus all accumulated arrears and accruals of
dividends per share) of such shares present in person or by
proxy at a separate general meeting of such holders convened
for such purpose, to appoint and authorize a trustee to
enforce the Company's creditor rights under the Loans
against Texaco Inc., enforce the obligations undertaken by
Texaco Inc. under the Guarantee and declare and pay
dividends. Not later than 30 days after such entitlement
arises, the Manager will convene a separate general meeting
for the above purpose. If the Manager fails to convene such
meeting within such 30-day period, the holders of 10% in
liquidation preference (plus all accumulated arrears and
accruals of dividends per share) of the outstanding Series B
Preferred Shares and such other preferred or preference
stock will be entitled to convene such separate general
meeting. The provisions of the Articles of Association
relating to the convening and conduct of the general
meetings of shareholders will apply with respect to any such
separate general meeting. Any trustee so appointed shall
vacate office, subject to the terms of such other preferred
or preference stock, if the Company (or Texaco Inc. pursuant
to the Guarantee) shall have paid in full all accumulated
arrears and accruals of unpaid dividends on the Series B
Preferred Shares (if the event that gave rise to such
appointment was clause (i) of this paragraph) or such breach
by Texaco shall have been cured (if the event that gave rise
to such appointment was clause (ii) of this paragraph).
If any resolution is proposed for adoption by the
shareholders of the Company providing for, or the Manager
proposes to take any action which will effect, (x) any
variation or abrogation of the rights, preferences and
privileges of the Series B Preferred Shares by way of
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amendment of the Company's Articles of Association or
otherwise (including, without limitation, the authorization
or issuance of any shares of the Company ranking, as to
participation in the profits or assets of the Company,
senior to the Series B Preferred Shares), (y) the
liquidation, dissolution or winding up of the Company or
(z) the modification of Regulation 16 of the Articles of
Association, which absolutely prohibits transfers of shares
of Common Stock, then the holders of outstanding Preferred
Shares of all series (and, in the case of a resolution
described in clause (x) above which would equally adversely
affect the rights, preferences or privileges of any Company
Dividend Parity Shares or any Company Liquidation Parity
Shares, such Company Dividend Parity Shares or such Company
Liquidation Parity Shares, as the case may be, or, in the
case of any resolution described in clause (y) or (z) above,
all Company Liquidation Parity Shares) will be entitled to
vote together as a class on such resolution (but not on any
other resolution) (i) at a separate meeting of such holders,
(ii) at the general meeting of shareholders of the Company
called for the purpose of adopting such resolution or
(iii) without a meeting but in writing, and such resolution
shall not be effective except with the approval, in the case
of clauses (i) and (ii), of the holders of 66-2/3% in
liquidation preference (plus all accumulated arrears and
accruals of dividends) of such outstanding shares present in
person or by proxy at a meeting at which 66-2/3% in
liquidation preference (plus all accumulated arrears and
accruals of dividends) of such shares are so present or, in
the case of clause (iii), by the holders of 66-2/3% in
liquidation preference (plus all accumulated arrears and
accruals of dividends) of such shares; provided, however,
that no such approval shall be required under clauses (x)
and (y) if the liquidation, dissolution and winding up of
the Company is proposed or initiated upon the initiation of
proceedings, or after proceedings have been initiated, for
the liquidation, dissolution, or winding up of Texaco Inc.
The rights attached to the Series B Preferred
Shares will be deemed not to be varied by the creation or
issue of, and no vote will be required for the creation of,
any further series of preference shares or any further
shares of the Company ranking as regards participation in
the profits or assets of the Company pari passu with or
junior to the Series B Preferred Shares.
The Company will cause a notice of any meeting at
which holders of the Series B Preferred Shares are entitled
to vote to be mailed to each holder of record of the
Series B Preferred Shares. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a
13
description of any resolution proposed for adoption at such
meeting on which such holders are entitled to vote and
(iii) instructions for the delivery of proxies.
No vote of the holders of the Series B Preferred
Shares will be required for the Company to redeem and cancel
Series B Preferred Shares in accordance with the Articles of
Association.
Notwithstanding that holders of Series B Preferred
Shares are entitled to vote under any of the circumstances
described above, any of the Series B Preferred Shares and
such other preference shares entitled to vote with such
Series B Preferred Shares as a single class outstanding at
such time that are owned by Texaco Inc. or any entity owned
20% or more by Texaco, either directly or indirectly, shall
not be entitled to vote and shall, for the purposes of such
vote, be treated as if they were not outstanding.
9. Additional Amounts. All payments in respect
of the Series B Preferred Shares by the Company will be made
without withholding or deduction for or on account of any
present or future taxes, duties, assessments or governmental
charges of whatever nature imposed or levied upon or as a
result of such payment by or on behalf of the Turks and
Caicos Islands or any authority therein or thereof having
power to tax, unless the withholding or deduction of such
taxes, duties, assessments or governmental charges is
required by law. In that event, the Company will pay as a
dividend such additional amounts as may be necessary in
order that the net amounts received by the holders of the
Series B Preferred Shares after such withholding or
deduction will equal the amount which would have been
receivable in respect of such Series B Preferred Shares in
the absence of such withholding or deduction, except that no
such additional amounts will be payable to a holder of
Series B Preferred Shares (or a third party on such holder's
behalf) with respect to Series B Preferred Shares:
(a) if such holder is liable for such taxes,
duties, assessments or governmental charges in
respect of such Series B Preferred Shares by
reason of such holder's having some connection
with the Turks and Caicos Islands other than being
a holder of such Series B Preferred Shares, or
(b) if such holder has been notified of the
obligation to withhold taxes and has been
requested but has not provided a declaration of
non-residence or other claim for exemption, and
such withholding or deduction would not have been
14
required had such declaration or claim been
received.
10. Book-Entry-Only Issuance; The Depository
Trust Company. The Depository Trust Company ("DTC"), New
York, NY, will act as securities depository for the Series B
Preferred Shares. The Series B Preferred Shares will be
issued as fully-registered securities registered in the name
of Cede & Co (DTC's partnership nominee). One fully-
registered Series B Preferred Share certificate will be
issued for the Series B Preferred Shares, in the aggregate
liquidation preference of such Series B Preferred Shares,
and will be deposited with DTC.
Purchases of Series B Preferred Shares under the
DTC system must be made by or through participants in the
DTC system (the "Participants"), which will receive a credit
for the Series B Preferred Shares on DTC's records. The
ownership interest of each actual purchaser of each Series B
Preferred Share ("Beneficial Owner") is in turn recorded on
the Participant's records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well
as periodic statements of their holdings, from the
Participant through which such Beneficial Owner entered into
the transaction. Transfers of ownership interests in the
Series B Preferred Shares are to be accomplished by entries
made on the books of Participants acting on behalf of such
Beneficial Owner. Beneficial Owners will not receive
certificates representing their ownership interests in
Series B Preferred Shares, except in the event that use of
the book-entry system for the Series B Preferred Shares is
discontinued.
To facilitate subsequent transfers, all Series B
Preferred Shares deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede &
Co. The deposit of Series B Preferred Shares with DTC and
their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series B Preferred Shares;
DTC's records reflect only the identity of the Participants
to whose accounts such Series B Preferred Shares are
credited, which may or may not be the Beneficial Owners.
The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by
DTC to Participants, among Participants, and by Participants
to Beneficial Owners will be governed by arrangements among
15
them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If
less than all of the Series B Preferred Shares are being
redeemed, DTC's practice is to determine by lot the amount
of the interest of each Participant in such series to be
redeemed.
Although voting with respect to the Series B
Preferred Shares is limited, in those cases where a vote is
required, neither DTC nor Cede & Co. will consent or vote
with respect to the Series B Preferred Shares. Under its
usual procedures, DTC mails an Omnibus Proxy to the Company
as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to
those Participants to whose accounts the Series B Preferred
Shares are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Dividend payments on the Series B Preferred Shares
will be made to DTC. DTC's practice is to credit
Participants' accounts on the relevant payable date in
accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not
receive payments on such payable date. Payments by
Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be
the responsibility of such Participant and not of DTC,
Texaco Inc. or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to
time. Payment of dividends to DTC is the responsibility of
the Company, disbursement of such payments to Participants
shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the
responsibility of Participants.
DTC may discontinue providing its services as
securities depository with respect to the Series B Preferred
Shares at any time by giving reasonable notice to the
Company. Under such circumstances, in the event that a
successor securities depository is not obtained, Series B
Preferred Share certificates would be required to be printed
and delivered.
11. Guarantee of Liabilities. It shall be a
condition precedent to the issuance of the Series B
Preferred Shares that Texaco Inc. execute a guarantee of
payment of all liabilities of the Company to the extent not
paid by the Company (other than any obligations to holders
16
of Preferred Shares) for the benefit of, and enforceable by,
third parties to whom the Company owes such obligations.
12. Financial Information. Holders of Series B
Preferred Shares are entitled to true and full information
regarding the state of the business and financial condition
of the Company, and upon request will receive copies of the
Company's unaudited annual financial statements for the
latest fiscal year within a reasonable time after the
preparation thereof.
IN WITNESS WHEREOF, TEXACO CAPITAL LLC has caused
this Certificate to be signed by one of the officers of its
Manager, and to be attested to by the Secretary of the
Manager, as of the 8th day of June, 1994.
TEXACO CAPITAL LLC
By Shelby Faber
_________________________
Assistant Treasurer of
Texaco Inc., as Manager
of Texaco Capital LLC
Attest: R.E. Koch
___________________
Assistant Secretary
of Texaco Inc.
17
EXHIBIT 4.2
PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT (the "Guarantee"),
dated as of June 8, 1994, is executed and delivered by
Texaco Inc., a corporation organized under the laws of the
State of Delaware (the "Guarantor") for the benefit of the
Holders (as defined below) from time to time of the
Preferred Shares (as defined below) of Texaco Capital LLC, a
Turks and Caicos Islands limited life company (the
"Issuer").
WHEREAS, the Issuer is issuing on the date hereof up to
5,175,000 shares of its Cumulative Adjustable Rate Monthly
Income Preferred Shares, Series B (the "Preferred Shares"),
and the Guarantor desires to issue this Guarantee for the
benefit of the Holders, as provided herein; and
WHEREAS, the Guarantor desires hereby irrevocably and
unconditionally to agree to the extent set forth herein to
pay to the Holders the Guarantee Payments (as defined below)
and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder of the Preferred Shares and the Guarantee, which
purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
As used in this Guarantee, the following terms shall,
unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the
Articles of Association of the Issuer adopted as of
October 7, 1993 and as amended (the "Articles of
Association").
"Guarantee Payments" shall mean the following payments,
without duplication, to the extent not paid by the Issuer:
(i) any accumulated arrears and accruals of unpaid dividends
which have been theretofore declared on the Preferred Shares
from moneys legally available for the payment thereof,
(ii) the redemption price (including all accumulated arrears
and accruals of unpaid dividends) payable with respect to
any Preferred Shares called for redemption by the Issuer as
an optional redemption or otherwise out of funds available
to the Issuer, (iii) the lesser of (a) the aggregate of the
liquidation preference and all accumulated arrears and
accruals of unpaid dividends (whether or not declared) to
the date of payment and (b) the amount of remaining assets
of the Issuer and (iv) any Additional Amounts (as described
in Section 2.01(b) herein) payable by the Issuer.
"Holder" shall mean any holder from time to time of any
Preferred Shares of the Issuer; provided, however, that in
determining whether the Holders of the requisite percentage
of Preferred Shares have given any request, notice, consent
or waiver hereunder, "Holder" shall not include the
Guarantor or any entity owned 20% or more by the Guarantor,
either directly or indirectly.
"Paying Agent" shall mean Texaco Inc., as registrar,
transfer agent and paying agent.
ARTICLE II
SECTION 2.01. (a) The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the
Guarantee Payments, as and when due (except to the extent
paid by the Issuer), regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert.
This Guarantee is continuing, irrevocable, unconditional and
absolute. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to the Holders.
(b) All Guarantee Payments shall be made without
withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied upon or as a result of
such payment by or on behalf of the United States, any State
thereof or any other jurisdiction through which or from
which such payment is made, or any authority therein or
thereof having power to tax, unless the withholding or
deduction of such taxes, duties, assessments or governmental
charges is required by law. In that event, the Guarantor
shall pay such additional amounts as may be necessary in
order that the net amounts received by the Holders after
such withholding or deduction will equal the amount which
would have been receivable in respect of the Preferred
Shares in the absence of such withholding or deduction,
except that no such additional amounts will be payable to
any Holder (or a third party on such Holder's behalf):
2
(i) if such Holder is liable for such taxes,
duties, assessments or governmental charges in respect
of the Preferred Shares by reason of such Holder's
having some connection with the United States, any
State thereof or any other jurisdiction through which
or from which such payment is made, other than being a
Holder, or
(ii) if such Holder has been notified of the
obligation to withhold taxes and has been requested but
has not provided a declaration of non-residence or
other claim for exemption, and such withholding or
deduction would not have been required had such
declaration or claim been received.
SECTION 2.02. The Guarantor hereby waives notice of
acceptance of this Guarantee and of any liability to which
it applies or may apply, presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 2.03. The obligations, covenants, agreements
and duties of the Guarantor under this Guarantee shall in no
way be affected or impaired by reason of the happening from
time to time of any of the following:
(a) the release or waiver by operation of law or
otherwise, of the performance or observance by the
Issuer of any express or implied agreement, covenant,
term or condition relating to the Preferred Shares to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the dividends,
redemption price, liquidation distributions or any
other sums payable under the terms of the Preferred
Shares or the extension of time for the performance of
any other obligation under, arising out of, or in
connection with, the Preferred Shares;
(c) any failure, omission, delay or lack of
diligence on the part of the Holders to enforce, assert
or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the
Preferred Shares, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
3
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency
in, any of the Preferred Shares; or
(f) the settlement or compromise of any
obligation guaranteed hereby or hereby incurred.
There shall be no obligation of the Holders to give notice
to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 2.04. This is a guarantee of payment and not
of collection. A Holder may enforce this Guarantee directly
against the Guarantor, and the Guarantor waives any right or
remedy to require that any action be brought against the
Issuer or any other person or entity before proceeding
against the Guarantor. Subject to Section 2.05, all waivers
herein contained shall be without prejudice to the Holders'
right at the Holders' option to proceed against the Issuer,
whether by separate action or by joinder. The Guarantor
agrees that this Guarantee shall not be discharged except by
payment of the Guarantee Payments in full and by complete
performance of all obligations of the Guarantor contained in
this Guarantee.
SECTION 2.05. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect
of any amounts paid to the Holders by the Guarantor under
this Guarantee and shall have the right to waive payment of
any amount of dividends in respect of which payment has been
made to the Holders by the Guarantor pursuant to Section
2.01; provided however, that the Guarantor shall not (except
to the extent required by mandatory provisions of law)
exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of a payment under this
Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to pay over such amount to
the Holders.
SECTION 2.06. The Guarantor acknowledges that its
obligations hereunder are several and independent of the
obligations of the Issuer with respect to its Preferred
Shares and that the Guarantor shall be liable as principal
and sole debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the
4
occurrence of any event referred to in subsections (a)
through (f), inclusive, of Section 2.03 hereof.
SECTION 2.07. The Guarantor represents and warrants
that its obligations hereunder rank, and covenants that such
obligations will at all times rank, (a) junior to all
liabilities of the Guarantor, (b) pari passu with the most
senior preferred or preference stock issued by the
Guarantor, if any, and with any guarantee entered into by
the Guarantor in respect of any preferred or preference
stock of any affiliate of the Guarantor and (c) senior to
the ordinary shares of the Guarantor.
ARTICLE III
SECTION 3.01. If the Guarantor issues, following the
date of the issuance of the Preferred Shares, any preferred
or preference stock ranking senior to its obligations under
this Guarantee or enters into any guarantee in respect of
any preferred or preference stock of any affiliate of the
Guarantor, which guarantee would rank junior to all
liabilities of the Guarantor but senior to this Guarantee as
regards rights in respect of dividends, liquidation
preference and distributions, and rights upon redemption,
then this Guarantee will be deemed to give the Holders such
rights and entitlements as are contained in or attached to
such other preferred or preference stock or guarantee such
that this Guarantee ranks pari passu as to such rights and
entitlements with any such preferred or preference stock or
other guarantee.
SECTION 3.02. If, at any time when the Guarantor fails
to comply with its obligations under this Guarantee or under
the Articles of Association of the Issuer, any proposal by
the Board of Directors of the Guarantor or by any
shareholder of the Guarantor or by any other person legally
entitled to do so is made to declare dividends on any shares
of the Guarantor ranking junior to the Guarantor's
obligations under this Guarantee as to participation in
profits, the Guarantor shall, or shall cause the Issuer to,
set aside for payment in a segregated account at the office
of the Paying Agent an amount equal to all accumulated
arrears of dividends payable on the Preferred Shares out of
moneys legally available therefor and irrevocably instruct
the Paying Agent to pay such amounts as dividends on the
Preferred Shares on the day following the date on which such
proposal is voted on by the Guarantor's shareholders. The
Paying Agent will make such payment on such day unless it
shall have received, prior to 10:00 a.m., New York time, on
such day, a certificate from the Chief Financial Officer of
5
the Guarantor certifying that such proposal has not been
adopted by the Guarantor's shareholders. In such case, the
amounts deposited in such account shall be remitted
forthwith to the Guarantor or the Issuer, as the case may
be. In all cases, any interest accrued on the amounts
deposited in such account shall be remitted by the Paying
Agent to the Guarantor or the Issuer, as the case may be.
SECTION 3.03. If, at any time when the Guarantor fails
to comply with its obligations under this Guarantee or under
the Articles of Association of the Issuer, the Guarantor, or
any subsidiary of the Guarantor using funds provided by the
Guarantor, redeems or purchases or otherwise acquires any
shares of the Guarantor ranking junior to the Guarantor's
obligations under this Guarantee as to participation in
assets of the Guarantor upon liquidation, all accumulated
arrears of dividends payable on the Preferred Shares out of
moneys legally available therefor shall immediately become
due and payable under this Guarantee; provided, however,
that no such payment shall be required if any such shares of
the Guarantor are redeemed, purchased or otherwise acquired
pursuant to any employee stock option plan of the Guarantor.
SECTION 3.04. The Guarantor shall not, and the
Guarantor shall not permit or cause any subsidiary of the
Guarantor using funds provided by the Guarantor to, redeem,
purchase or otherwise acquire, or pay a liquidation
preference with respect to, any preferred or preference
stock of the Guarantor ranking pari passu with this
Guarantee, any preferred or preferred stock of affiliates of
the Guarantor (including the Issuer) entitled to the
benefits of a guarantee ranking pari passu with this
Guarantee or any preferred or preference stock of affiliates
of the Guarantor (including the Issuer) entitled to the
benefits of a guarantee ranking pari passu with this
Guarantee or any preferred or preference stock of affiliates
of the Guarantor (including the Issuer) entitled to the
benefits of a guarantee ranking junior to this Guarantee as
to participation in assets of the Guarantor upon liquidation
if at such time the Guarantor shall be in default with
respect to its obligations under this Guarantee.
SECTION 3.05. The Guarantor shall not, and the
Guarantor shall not permit or cause any subsidiary of the
Guarantor using funds provided by the Guarantor to, pay
dividends, or make Guarantee Payments with respect to
dividends, on any preferred or preference stock of any
affiliates of the Guarantor entitled to the benefits of a
guarantee ranking junior to this Guarantee as to
participation in profits of the Guarantor if at such time
6
the Guarantor shall be in default with respect to its
obligations under this Guarantee.
SECTION 3.06. The Guarantor agrees to maintain,
directly or indirectly, ownership of 100% of the common
shares of the Issuer and not to voluntarily dissolve, wind-
up or liquidate the Issuer for so long as any Preferred
Shares shall remain outstanding.
SECTION 3.07. The Guarantor shall take all actions
necessary to ensure the compliance of its subsidiaries with
this Article III, which may include causing such
subsidiaries to incorporate appropriate restrictions in
their Articles of Association or similar constitutional
documents.
ARTICLE IV
This Guarantee shall terminate and be of no further
force and effect upon full payment of the redemption price
(including all accumulated arrears and accruals of unpaid
dividends) of all Preferred Shares or upon full payment of
the amounts payable to the Holders upon liquidation of the
Issuer, provided, however, that this Guarantee shall
continue to be effective or shall be reinstated, as the case
may be, if at any time payment of any sums payable under the
Preferred Shares or this Guarantee must be restored by a
Holder for any reason whatsoever. The Guarantor agrees to
indemnify each Holder and hold it harmless against any loss
it may suffer in such circumstances.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained
in this Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the Holders. The Guarantor
shall not assign its obligations hereunder without the prior
approval of the Holders of not less than 66-2/3% in
liquidation preference of all Preferred Shares voting as a
single class, which consent shall be obtained in accordance
with procedures identical to the procedures contained in the
Articles of Association and the applicable law of the Turks
and Caicos Islands.
SECTION 5.02. Except for those changes required by
Section 3.01 hereof or which do not adversely affect the
rights of Holders (in any of which cases no agreement will
be required), this Guarantee shall be changed only by
7
agreement in writing signed by the Guarantor with the prior
approval of the Holders of not less than 66-2/3% in
liquidation preference of all Preferred Shares voting as a
single class, which approval shall be obtained in writing or
by a vote at a separate general meeting at which such
Holders shall be present in person or by proxy, in
accordance with procedures identical to the procedures
contained in the Articles of Association and the applicable
law of the Turks and Caicos Islands.
SECTION 5.03. Any notice, request or other
communication required or permitted to be given hereunder to
the Guarantor shall be given in writing by delivering the
same against receipt therefor by facsimile transmission
(confirmed by mail) or telex, addressed to the Guarantor, as
follows (and if so given, shall be deemed given when mailed
or upon receipt of an answer-back, if sent by telex), to
wit:
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
The address of the Guarantor may be changed at any time
and from time to time and shall be the most recent such
address furnished in writing by the Guarantor to the Paying
Agent. Any notice, request or other communication required
or permitted to be given hereunder to the Holders shall be
given by the Guarantor in the same manner as notices sent by
the Issuer to the Holders.
SECTION 5.04. The masculine and neuter genders used
herein shall include the masculine, feminine and neuter
genders.
SECTION 5.05. This Guarantee is solely for the benefit
of the Holders and is not separately transferable from the
Preferred Shares.
SECTION 5.06 This Guarantee shall be governed by and
construed and interpreted in accordance with the laws of the
State of New York.
8
THIS GUARANTEE is executed as of the day and year first
above written.
TEXACO INC.
By: Peter M. Wissel
--------------------
Assistant Treasurer
9
EXHIBIT 12.1
EXHIBIT 23.1
ARTHUR
ANDERSEN
ARTHUR ANDERSEN & CO. SC
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form
S-3 (Nos. 33-50553 and 33-50553-01) of our reports dated February
24, 1994 included or incorporated by reference in Texaco Inc.'s
Form 10-K for the year ended December 31, 1993 and to all
references to our Firm included in the Registration Statement on
Form S-3 (Nos. 33-50553 and 33-50553-01).
ARTHUR ANDERSEN & CO.
New York, N.Y.
June 8, 1994
FDeb:dc
8/2
EXHIBIT 23.2
MISICK & STANBROOK
P.O. Box 127
Town Center Mall
Providencioles
Turks & Caicos Islands
British West Indies
June 8, 1994
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Gentlemen:
We hereby consent to the use of our name, including under the
captions "TAXATION" and "VALIDITY OF SECURITIES", in the Prospectus
Supplement dated June 8, 1994 to the Prospectus dated October 21,
1993 filed with the Securities and Exchange Commission (the "SEC")
pursuant to Rule 424(b)(2) of the Securities Act of 1933, as
amended, relating to the offering of preferred shares of Texaco
Capital LLC guaranteed by Texaco Inc. to the extent set forth in
such Prospectus Supplement and such Prospectus, and to the filing
of this consent with the SEC.
MISICK & STANBROOK
FDeB:dc
8/2
EXHIBIT 23.3
Arthur G. Taylor
Associate General Counsel
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
June 8, 1994
Texaco Inc.
20000 Westchester Avenue
White Plains, NY 10650
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Gentlemen:
I hereby consent to the use of my name, including under the
caption "VALIDITY OF SECURITIES", in the Prospectus Supplement
dated June 8, 1994 to the Prospectus dated October 21, 1993 filed
with the Securities and Exchange Commission (the "SEC") pursuant to
Rule 424(b)(2) of the Securities Act of 1933, as amended, relating
to the offering of preferred shares of Texaco Capital LLC
guaranteed by Texaco Inc. to the extent set forth in such
Prospectus Supplement and such Prospectus, and to the filing of
this consent with the SEC.
Arthur G. Taylor
FDeB:dc
8/2
Exhibit 23.4
SULLIVAN & CROMWELL
125 Broad Street, New York 10004-2498
(212) 558-4000
June 8, 1994
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Gentlemen:
We hereby consent to the use of our name, including under the
captions "TAXATION" and "VALIDITY OF SECURITIES", in the Prospectus
Supplement dated June 8, 1994 to the Prospectus dated October 21,
1993 filed with the Securities and Exchange Commission (the "SEC")
pursuant to Rule 424(b)(2)of the Securities Act of 1933, as
amended, relating to the offering of preferred shares of Texaco
Capital LLC guaranteed by Texaco Inc. to the extent set forth in
such Prospectus Supplement and such Prospectus, and to the filing
of this consent with the SEC.
Sullivan & Cromwell
FDeB:dc
8/2
EXHIBIT 99.1
PREFERRED STOCK LOAN AGREEMENT
LOAN AGREEMENT, dated as of June 8, 1994, between
Texaco Inc. ("Texaco"), a corporation organized under the
laws of the State of Delaware, United States of America, and
Texaco Capital LLC, a limited life company organized under
the laws of the Turks and Caicos Islands ("Capital").
WHEREAS, Capital has issued and sold 14,000,000
6-7/8% Cumulative Guaranteed Monthly Income Preferred
Shares, Series A with a liquidation preference of $25 per
share;
WHEREAS, Capital intends to issue and sell up to
5,175,000 Cumulative Adjustable Rate Monthly Income
Preferred Shares, Series B (the "Preferred Shares") with a
liquidation preference (the "Liquidation Preference") of $25
per share;
WHEREAS, Texaco is guaranteeing the payment on
liquidation or redemption of the Preferred Shares as well as
the payment of dividends, if and to the extent declared out
of moneys held by Capital and legally available therefor,
all to the extent set forth in the related Payment and
Guarantee Agreement, dated June 8, 1994 (the "Guarantee");
WHEREAS, Texaco has asked Capital to make a loan
to Texaco in an aggregate principal amount equal to the
aggregate Liquidation Preference of the Preferred Shares
issued and sold by Capital;
WHEREAS, Capital is willing to make such loan to
Texaco, on the terms and conditions hereinafter stated;
NOW THEREFORE, Texaco and Capital hereby agree as
follows:
ARTICLE I
THE LOAN
Section 1.01. The Loan. Subject to the terms and
conditions hereof, on June 15, 1994 Capital agrees to make
to Texaco a loan in an aggregate principal amount equal to
$112,500,000. Such loan, in the amount as may be from time
to time outstanding, shall be referred to herein as the
"Loan".
Section 1.02. Term of the Loan; Mandatory
Prepayment. (a) If Capital redeems Preferred Shares in
accordance with the terms thereof, the Loan shall become due
and payable in a principal amount equal to the aggregate
Liquidation Preference of the Preferred Shares so redeemed.
Any payment pursuant to this Section 1.02(a) shall be made
prior to 12:00 noon, New York time, on the date of such
redemption or at such other time on such earlier date as
Capital and Texaco shall agree.
(b) The entire principal amount of the Loan shall
become due and payable (together with any accrued and unpaid
interest thereon, including Additional Interest (as defined
in Section 2.06), if any) on the earliest of May 31, 2024 or
the date upon which Texaco shall be dissolved or liquidated
or the date upon which Capital shall be dissolved or
liquidated.
Section 1.03. Optional Prepayment. Texaco shall
have the right to prepay the Loan, without premium or
penalty,
(i) in whole or in part (together with any
accrued but unpaid interest, including Additional
Interest, if any, on the portion being prepaid) at any
time following June 30, 1999; and
(ii) in whole (together with all accrued and
unpaid interest, including Additional Interest, if any,
thereon) at any time after June 15, 1994 if Texaco is
or would be required to pay any Additional Interest
pursuant to the terms of Section 2.06 or, if such
requirement shall relate only to a portion of the Loan,
the portion of the Loan affected by such requirement.
In no event, however, shall Texaco have the right to
prepay the Loan, or a portion thereof, under this
clause (ii) based on a technical obligation to pay
Additional Interest in the absence of any actual
liability for withholding taxes, duties, assessments or
governmental charges, as the case may be.
ARTICLE II
INTEREST
Section 2.01. Interest on the Loan. The Loan
shall bear interest at a variable rate from June 15, 1994
until maturity. The rate for the initial period from the
date the Loan is made to September 30, 1994 will be 6.40%
per annum. Thereafter, interest on the Loan will be payable
2
at the "Applicable Rate" (as defined below) from time to
time in effect, which will be adjusted quarterly and
calculated on the basis of a 360 day year composed of
12 months of 30 days each, and for any period shorter than a
full monthly interest period, interest will be computed on
the basis of the actual number of days elapsed in such
period. Such interest shall be payable on the last day of
each calendar month of each year, commencing on June 30,
1994. In the event that any date on which interest is
payable on the Loan is not a day on which banks in The City
of New York are open for business and on which foreign
exchange dealings may be conducted in The City of New York
(a "Business Day"), then payment of the interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such
date.
Section 2.02. The Applicable Rate. Except as
provided below in this Section, the "Applicable Rate" for
any quarter (other than the initial period) will be equal to
88% of the Effective Rate (as defined below), but not less
than 4.50% per annum nor more than 10.50% per annum. The
Applicable Rate with respect to each quarter (other than the
initial period) will be calculated as promptly as
practicable by Capital according to the appropriate method
described below. Capital will cause notice of each
Applicable Rate to be given to Texaco before the
commencement of the quarter to which it applies. The
"Effective Rate" for any quarter will be equal to the
highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate
(each as defined below) for such quarter. The Treasury Bill
Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate will each be rounded to the
nearest one hundredth of a percent. The Applicable Rate
will be rounded to the nearest five hundredth of a percent.
In the event that Capital determines in good faith that for
any reason:
(i) any one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate cannot be determined for any quarter,
then the Effective Rate for such quarter will be equal
to the higher of whichever two of such rates can be so
determined;
3
(ii) only one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for such quarter will be equal to
whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for the preceding quarter will be
continued for such quarter.
Section 2.03. The Treasury Bill Rate. Except as
described below in this Section, the "Treasury Bill Rate"
for each quarter will be the arithmetic average of the two
most recent weekly per annum secondary market discount rates
(or the one weekly per annum secondary market discount rate,
if only one such rate is published during the relevant
Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve
Board (as defined below) during the Calendar Period
immediately preceding the last ten calendar days preceding
the quarter for which the Applicable Rate on the Loan is
being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum secondary
market discount rate during any such Calendar Period, then
the Treasury Bill Rate for such quarter will be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate is
published during the relevant Calendar Period) for three-
month U.S. Treasury bills, as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by Capital. In the
event that a per annum secondary market discount rate for
three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by
any U.S. Government department or agency during such
Calendar Period, then the Treasury Bill Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum secondary market discount rates (or
the one weekly per annum secondary market discount rate, if
only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having
remaining maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the
Federal Reserve Board, or if the Federal Reserve Board does
not publish such rates, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by
Capital. In the event that Capital determines in good faith
that for any reason no such U.S. Treasury bill rates are
4
published as provided above during such Calendar Period,
then the Treasury Bill Rate for such quarter will be the
arithmetic average of the per annum secondary market
discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-
interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if
daily quotations are not generally available) to Capital by
at least three recognized dealers in U.S. Government
securities selected by Capital. In the event that Capital
determines in good faith that for any reason Capital cannot
determine the Treasury Bill Rate for any quarter as provided
above in this Section, the Treasury Bill Rate for such
quarter will be the arithmetic average of the per annum
secondary market discount rates based upon the closing bids
during such Calendar Period for each of the issues of
marketable interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 nor more than 100
days, as chosen and quoted daily for each business day in
New York City (or less frequently if daily quotations are
not generally available) to Capital by at least three
recognized dealers in U.S. Government securities selected by
Capital. As used in Sections 2.03-2.05 hereof, the term
"Calendar Period" means a period of fourteen calendar days,
and the term "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System.
Section 2.04. The Ten Year Constant Maturity
Rate. Except as described below in this Section, the "Ten
Year Constant Maturity Rate" for each quarter will be the
arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (as defined below) (or the one
weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the
Calendar Period immediately preceding the last ten calendar
days preceding the quarter for which the Applicable Rate on
the Loan is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten
Year Average Yield during such Calendar Period, then the Ten
Year Constant Maturity Rate for such quarter will be the
arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such yield is published
during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by
Capital. In the event that a per annum Ten Year Average
Yield is not published by any Federal Reserve Bank or by any
5
U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the
one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period)
for all of the actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special
Securities (as defined below)) then having remaining
maturities of not less than eight nor more than twelve
years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board does
not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by
Capital. In the event that Capital determines in good faith
that for any reason Capital cannot determine the Ten Year
Constant Maturity Rate for any quarter as provided above in
this Section, then the Ten Year Constant Maturity Rate for
such quarter will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date not less than eight or more than twelve years
from the date of each such quotation, as chosen and quoted
daily for each business day in New York City (or less
frequently if daily quotations are not generally available)
to Capital by at least three recognized dealers in U.S.
Government securities selected by Capital. As used in
Sections 2.04-2.05 hereof, the term "Special Securities"
means securities which can, at the option of the holder, be
surrendered at face value in payment of any Federal estate
tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount. As used in this
Section, the term "Ten Year Average Yield" means the average
yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to
constant maturities of ten years).
Section 2.05. The Thirty Year Constant Maturity
Rate. Except as described below in this Section, the
"Thirty Year Constant Maturity Rate" for each quarter will
be the arithmetic average of the two most recent weekly per
annum Thirty Year Average Yields (as defined below) (or the
one weekly per annum Thirty Year Average Yield, if only one
such yield is published during the relevant Calendar
Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the last
ten calendar days preceding the quarter for which the
Applicable Rate on the Loan is being determined. In the
6
event that the Federal Reserve Board does not publish such a
weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate
for such quarter will be the arithmetic average of the two
most recent weekly per annum Thirty Year Average Yields (or
the one weekly per annum Thirty Year Average Yield, if only
one such yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government
department or agency selected by Capital. In the event that
a per annum Thirty Year Average Yield is not published by
the Federal Reserve Board or by any Federal Reserve Bank or
by any U.S. Government department or agency during such
Calendar Period, then the Thirty Year Constant Maturity Rate
for such quarter will be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or
the one weekly per annum average yield to maturity, if only
one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special
Securities) then having remaining maturities of not less
than twenty-eight nor more than thirty-two years, as
published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board does not publish such
yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by Capital. In the
event that Capital determines in good faith that for any
reason Capital cannot determine the Thirty Year Constant
Maturity Rate for any quarter as provided above in this
Section, then the Thirty Year Constant Maturity Rate for
such quarter will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date not less than twenty-eight nor more than
thirty-two years from the date of each such quotation, as
chosen and quoted daily for each business day in New York
City (or less frequently if daily quotations are not
generally available) to Capital by at least three recognized
dealers in U.S. Government securities selected by Capital.
As used in this Section, the term "Thirty Year Average
Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of thirty
years).
Section 2.06. Additional Interest. In addition,
if at any time following June 15, 1994 (a) Capital shall be
obligated to pay any Additional Amounts in respect of the
Preferred Shares pursuant to the terms thereof, (b) Texaco
7
shall be required to withhold or deduct any amounts, for or
on account of any taxes, duties or governmental charges of
whatever nature imposed by the United States of America (or
any political subdivision thereof or therein), from the
interest payments to be made by Texaco on the Loan or
(c) Capital shall be required to pay, with respect to its
income derived from the interest payments on the Loan, any
amounts, for or on account of any taxes, duties or
governmental charges of whatever nature imposed by the Turks
and Caicos Islands (or any political subdivision thereof or
therein), or any other taxing authority, then, in any such
case, Texaco will pay as interest such additional amounts
("Additional Interest") as may be necessary in order that
the net amounts received and retained by Capital after
paying such Additional Amounts, or after such withholding or
deduction or the payment of such taxes, duties, assessments
or governmental charges, as the case may be, shall result in
Capital's having such funds as it would have had in the
absence of the obligation to pay such Additional Amounts, or
such withholding or deduction or the payment of such taxes,
duties, assessments or governmental charges, as the case may
be. The obligation to pay Additional Interest under (b)
above shall be reduced proportionately to the extent that
(x) holders of Preferred Shares have been notified of the
obligation to withhold taxes and have been requested but
have not provided declarations of non-residence or other
claim for exemption and (y) such withholding or deduction
would not have been required had such declaration or claim
been received.
Section 2.07. Extension of Interest Period.
Notwithstanding the provisions of Section 2.01, Texaco shall
have the right at any time during the term of the Loan, so
long as Texaco is not in default in the payment of interest
on the Loan, to extend the interest payment period to 60
months; provided that at the end of such period Texaco shall
pay all interest then accrued and unpaid together with
interest thereon at the weighted average rate applicable to
the Loan to the extent permitted by applicable law;
provided, further, that, during any such extended interest
period or at any time during which there is an uncured Event
of Default under the Loan, Texaco shall not pay dividends on
any of its shares of equity stock. Notwithstanding anything
else contained herein, the time within which all payments of
the principal of and interest on the Loan (or any
replacement loans) shall be made shall not be later than the
fiftieth anniversary of the issuance of the Preferred
Shares. Texaco covenants (x) not to exercise the right to
extend the interest period with respect to the Loan made
pursuant to the Preferred Stock Loan Agreement dated
October 27, 1993 or pursuant to the Common Stock Loan
8
Agreement dated October 27, 1993 (the "Prior Loans") unless
it exercises or has exercised the right to extend the
interest period with respect to the Loan in a way which will
insure that, during the entire time when an interest period
with respect to the Prior Loans has been extended under
their terms, the interest period with respect to the Loan
shall also be extended as provided herein, and (y) not to
exercise the right to extend the interest period with
respect to the Prior Loans if the specified maturity date on
the Loan would occur during such interest extension period.
Texaco shall give Capital such prior notice of its selection
of such longer interest payment period with respect to the
Loan as shall enable Capital to give at least eleven
Business Days prior notice to the holders of the Preferred
Shares, and Texaco shall cause Capital to give notice to the
holders of the Preferred Shares.
ARTICLE III
PAYMENTS
Section 3.01. Method and Date of Payment. Each
payment by Texaco of principal and interest (including
Additional Interest, if any) on the Loan shall be made to
Capital in lawful money of the United States at such place
and to such account as may be designated in writing by
Capital.
Section 3.02. Set-off. Notwithstanding anything
to the contrary herein, Texaco shall have the right to set-
off any payment it is otherwise required to make hereunder
with and to the extent Texaco has theretofore made, or is
concurrently on the date of such payment making, a payment
under the Guarantee.
ARTICLE IV
SUBORDINATION
Section 4.01. Subordination. Texaco and Capital
covenant and agree that the Loan is subordinate and junior
in right of payment to all Senior Indebtedness as provided
herein. The term "Senior Indebtedness" shall mean the
principal, premium, if any, and interest on (i) all
indebtedness of Texaco (excluding the Prior Loans, with
which the Loan shall rank on a pari passu basis), whether
outstanding on June 8, 1994 or hereafter created, incurred
or assumed, which is for money borrowed, or evidenced by a
note or similar instrument given in connection with the
9
acquisition of any business, properties or assets, including
securities, (ii) any indebtedness of others of the kinds
described in the preceding clause (i) for the payment of
which Texaco is responsible or liable as guarantor or
otherwise and (iii) amendments, renewals, extensions and
refundings of any such indebtedness, unless in any
instrument or instruments evidencing or securing such
indebtedness or pursuant to which the same is outstanding,
or in any such amendment, renewal, extension or refunding,
it is expressly provided that such indebtedness is not
superior in right of payment to the Loan. Obligations to
other creditors, including trade creditors, do not
constitute Senior Indebtedness. The Loan will rank pari
passu with, and will not be superior in right of payment to,
the Prior Loans. The Senior Indebtedness shall continue to
be Senior Indebtedness and entitled to the benefits of these
subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior
Indebtedness or extension or renewal of the Senior
Indebtedness.
In the event that (i) Texaco shall default in the
payment of any principal, or premium, if any, or interest on
any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for
prepayment or declaration or otherwise or (ii) an event of
default occurs with respect to any Senior Indebtedness
permitting the holders thereof to accelerate the maturity
thereof and written notice of such event of default is given
to Texaco by the holders of Senior Indebtedness, then unless
and until such default in payment and event of default shall
have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities,
by set-off or otherwise) shall be made or agreed to be made
on account of the Loan or interest thereon or in respect of
any repayment, redemption, retirement, purchase or other
acquisition of the Loan.
In the event of (i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment,
composition or other similar proceeding relating to Texaco,
its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of Texaco,
voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings, (iii) any assignment
by Texaco for the benefit of creditors, or (iv) any other
marshalling of the assets of Texaco, all Senior Indebtedness
shall first be paid in full before any payment or
distribution, whether in cash, securities or other property,
shall be made to Texaco on account of the Loan. Any payment
or distribution, whether in cash, securities or other
10
property (other than securities of Texaco or any other
corporation provided for by a plan of reorganization or a
readjustment, the payment of which is subordinate, at least
to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Loan, to
the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment),
which would otherwise (but for these subordination
provisions) be payable or deliverable in respect to the Loan
shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness shall have
been paid in full. No present or future holder of any
Senior Indebtedness shall be prejudiced in the right to
enforce subordination of the indebtedness constituting the
Loan by any act or failure to act on the part of Texaco.
Senior Indebtedness shall not be deemed to have
been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the
amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, Capital
shall be subrogated to all the rights of any holders of
Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until
the Loan shall have been paid in full, and such payments or
distributions received by Capital, by reason of such
subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of
Senior Indebtedness, shall, as between Texaco and its
creditors other than the holders of Senior Indebtedness, on
the one hand, and Capital, on the other, be deemed to be a
payment by Texaco on account of Senior Indebtedness, and not
on account of the Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties.
Texaco represents and warrants to Capital that:
(a) Good Standing. Texaco is a corporation duly
established and validly existing under the laws of the
State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its
business as now being conducted.
11
(b) Power and Authority. Texaco has full power
and authority to enter into this Agreement and to incur
and perform the obligations provided for herein, all of
which have been duly authorized by all proper and
necessary action.
(c) Binding Agreement. This Agreement
constitutes the valid and legally binding obligation of
Texaco enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles.
ARTICLE VI
COVENANTS
Section 6.01. Covenants. Texaco agrees (i) to
use the proceeds of the Loan for working capital, for
retirement of debt and for other general corporate purposes,
(ii) to maintain direct or indirect 100% ownership of the
common shares of Capital, (iii) not to voluntarily dissolve,
wind-up or liquidate Capital so long as any Preferred Shares
are outstanding, (iv) to timely perform all of its duties as
Manager of Capital, (v) not to exercise the right pursuant
to Section 2.07 to extend the interest period with respect
to the Prior Loans unless it exercises or has exercised the
right to extend the interest period with respect to the Loan
in a way which will insure that, during the entire time when
an interest period with respect to the Prior Loans has been
extended under its terms, the interest period with respect
to the Loan shall also be extended, and (vi) not to exercise
the right to extend the interest period with respect to the
Prior Loans if the specified maturity date on the Loan would
occur during such interest extension period.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. If one or more
of the following events (each an "Event of Default") shall
occur and be continuing:
(a) default in the payment of interest on
this Loan, including any Additional Interest in
respect thereof, when due for 10 days; provided
that a valid extension of the interest payment
12
period by Texaco pursuant to Section 2.07 shall
not constitute a default in the payment of
interest for this purpose;
(b) default in the payment of principal on
this Loan;
(c) dissolution or winding-up or liquidation
of Capital;
(d) the bankruptcy, insolvency or liquida-
tion of Texaco; or
(e) the breach by Texaco of any of its
covenants under the Loan;
then, in every such event, and at any time thereafter during
the continuance of such event, Capital will have the right
to declare the principal of and the interest on the Loan and
all other amounts payable hereunder to be forthwith due and
payable and to enforce its other rights as a defaulted
creditor with respect to the Loan, whereupon the same shall
become and be forthwith due and payable, without
presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything in this
Agreement to the contrary notwithstanding. If an Event of
Default specified in subparagraph (c) or (d) above shall
have occurred, the principal of and interest on the Loan and
all other amounts payable hereunder shall thereupon and
concurrently become due and payable without presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement to
the contrary notwithstanding.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. All notices hereunder
shall be deemed given by a party hereto if in writing and
delivered personally or by telegram or facsimile
transmission or by registered or certified mail (return
receipt requested) to the other party at the following
address for such party (or at such other address as shall be
specified by like notice):
13
If to Capital, to:
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue,
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
If to Texaco, to:
Texaco Inc.
2000 Westchester Avenue,
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
Any notice given by mail or telegram or facsimile
transmission shall be effective when received.
Section 8.02. Binding Effect. Texaco shall have
the right at all times to assign any of its rights or
obligations under this Agreement to a direct or indirect
wholly owned subsidiary of Texaco; provided that, in the
event of any such assignment, Texaco shall remain jointly
and severally liable for all such obligations. Capital may
not assign any of its rights hereunder without the prior
written consent of Texaco. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of
Texaco and Capital and their respective successors and
assigns. Any assignment by Texaco or Capital in
contravention of this Section 8.02 shall be null and void.
Section 8.03. Governing Law. EXCEPT AS TO
MATTERS RELATING TO THE AUTHORIZATION, EXECUTION AND
DELIVERY OF THIS AGREEMENT, WHICH SHALL BE GOVERNED BY THE
LAWS OF THE TURKS AND CAICOS ISLANDS IN THE CASE OF CAPITAL,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 8.04. Counterparts. This Agreement may
be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall
constitute one and the same instrument.
Section 8.05. Amendments. This Agreement may be
amended by mutual consent of the parties in the manner the
14
parties shall agree; provided that, so long as any of the
Preferred Shares shall remain outstanding, no such amendment
shall be made, and no termination of this Agreement shall
occur, without the prior consent of at least 66-2/3% of the
holders of the Preferred Shares, in writing or at a duly
constituted meeting of such holders, unless and until the
Loan and all accrued and unpaid interest thereon (including
Additional Interest, if any) shall have been paid in full.
15
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
TEXACO INC.
By: Peter M. Wissel
-----------------------------
Title: Assistant Treasurer
TEXACO CAPITAL LLC
By Texaco Inc., as Manager
By: Shelby Faber
-----------------------------
Title: Assistant Treasurer
16
EXHIBIT 99.2
COMMON STOCK LOAN AGREEMENT
LOAN AGREEMENT, dated as of June 8, 1994, between
Texaco Inc. ("Texaco"), a corporation organized under the
laws of the State of Delaware, United States of America, and
Texaco Capital LLC, a limited life company organized under
the laws of the Turks and Caicos Islands ("Capital").
WHEREAS, Capital has issued its common equity to
Texaco and one of its subsidiaries, and has received related
capital contributions, in an aggregate amount of
$93,038,000, and has issued and sold 14,000,000 6-7/8%
Cumulative Guaranteed Monthly Income Preferred Shares,
Series A with a liquidation preference of $25 per share;
WHEREAS, Capital intends to issue its common
equity to Texaco, and receive related capital contributions,
in an aggregate amount of $29,900,000 (the "Common Share
Payments"), and intends to issue and sell up to 5,175,000
Cumulative Adjustable Rate Monthly Income Preferred Shares,
Series B (the "Preferred Shares") with a liquidation
preference of $25 per share;
WHEREAS, Texaco has asked Capital to make a loan
to Texaco in an aggregate principal amount equal to the
aggregate Common Share Payments;
WHEREAS, Capital is willing to make such loan to
Texaco, on the terms and conditions hereinafter stated;
NOW THEREFORE, Texaco and Capital hereby agree as
follows:
ARTICLE I
THE LOAN
Section 1.01. The Loan. Subject to the terms and
conditions hereof, on June 15, 1994 Capital agrees to make
to Texaco a loan in an aggregate principal amount equal to
$29,900,000. Such loan, in the amount as may be from time
to time outstanding, shall be referred to herein as the
"Loan".
Section 1.02. Term of the Loan. The entire
principal amount of the Loan shall become due and payable
(together with any accrued and unpaid interest thereon,
including Additional Interest, (as defined in Section 2.06
hereof) if any) on the earliest of May 31, 2024 or the date
upon which Texaco shall be dissolved or liquidated or the
date upon which Capital shall be dissolved or liquidated.
Section 1.03. Optional Prepayment. Texaco shall
have the right to prepay the Loan, without premium or
penalty,
(i) in whole or in part (together with any
accrued but unpaid interest, including Additional
Interest (as defined in Section 2.06 hereof), if any,
on the portion being prepaid) at any time following
June 30, 1999; and
(ii) in whole (together with all accrued and
unpaid interest, including Additional Interest, if any,
thereon) at any time after the date hereof if Texaco is
or would be required to pay any Additional Interest
pursuant to the terms of Section 2.06 or, if such
requirement shall relate only to a portion of the Loan,
the portion of the Loan affected by such requirement.
In no event, however, shall Texaco have the right to
prepay the Loan, or a portion thereof, under this
clause (ii) based on a technical obligation to pay
Additional Interest in the absence of any actual
liability for withholding taxes, duties, assessments or
governmental charges, as the case may be.
ARTICLE II
INTEREST
Section 2.01. Interest on the Loan. The Loan
shall bear interest at a variable rate from June 15, 1994
until maturity. The rate for the initial period from the
date the Loan is made to September 30, 1994 will be 6.40%
per annum. Thereafter, interest on the Loan will be payable
at the "Applicable Rate" (as defined below) from time to
time in effect, which will be adjusted quarterly and
calculated on the basis of a 360 day year composed of 12
months of 30 days each, and for any period shorter than a
full monthly interest period, interest will be computed on
the basis of the actual number of days elapsed in such
period. Such interest shall be payable on the last day of
each calendar month of each year, commencing on June 30,
1994. In the event that any date on which interest is
payable on the Loan is not a day on which banks in The City
of New York are open for business and on which foreign
exchange dealings may be conducted in The City of New York
2
(a "Business Day"), then payment of the interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such
date.
Section 2.02. The Applicable Rate. Except as
provided below in this Section, the "Applicable Rate" for
any quarter (other than the initial period) will be equal to
88% of the Effective Rate (as defined below), but not less
than 4.50% per annum nor more than 10.50% per annum. The
Applicable Rate with respect to each quarter (other than the
initial period) will be calculated as promptly as
practicable by Capital according to the appropriate method
described below. Capital will cause notice of each
Applicable Rate to be given to Texaco before the
commencement of the quarter to which it applies. The
"Effective Rate" for any quarter will be equal to the
highest of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate and the Thirty Year Constant Maturity Rate
(each as defined below) for such quarter. The Treasury Bill
Rate, the Ten Year Constant Maturity Rate and the Thirty
Year Constant Maturity Rate will each be rounded to the
nearest one hundredth of a percent. The Applicable Rate
will be rounded to the nearest five hundredth of a percent.
In the event that Capital determines in good faith that for
any reason:
(i) any one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate cannot be determined for any quarter,
then the Effective Rate for such quarter will be equal
to the higher of whichever two of such rates can be so
determined;
(ii) only one of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for such quarter will be equal to
whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate or the Thirty Year Constant
Maturity Rate can be determined for any quarter, then
the Effective Rate for the preceding quarter will be
continued for such quarter.
3
Section 2.03. The Treasury Bill Rate. Except as
described below in this Section, the "Treasury Bill Rate"
for each quarter will be the arithmetic average of the two
most recent weekly per annum secondary market discount rates
(or the one weekly per annum secondary market discount rate,
if only one such rate is published during the relevant
Calendar Period (as defined below)) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve
Board (as defined below) during the Calendar Period
immediately preceding the last ten calendar days preceding
the quarter for which the Applicable Rate on the Loan is
being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum secondary
market discount rate during any such Calendar Period, then
the Treasury Bill Rate for such quarter will be the
arithmetic average of the two most recent weekly per annum
secondary market discount rates (or the one weekly per annum
secondary market discount rate, if only one such rate is
published during the relevant Calendar Period) for three-
month U.S. Treasury bills, as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S.
Government department or agency selected by Capital. In the
event that a per annum secondary market discount rate for
three-month U.S. Treasury bills is not published by the
Federal Reserve Board or by any Federal Reserve Bank or by
any U.S. Government department or agency during such
Calendar Period, then the Treasury Bill Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum secondary market discount rates (or
the one weekly per annum secondary market discount rate, if
only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having
remaining maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the
Federal Reserve Board, or if the Federal Reserve Board does
not publish such rates, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by
Capital. In the event that Capital determines in good faith
that for any reason no such U.S. Treasury bill rates are
published as provided above during such Calendar Period,
then the Treasury Bill Rate for such quarter will be the
arithmetic average of the per annum secondary market
discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable non-
interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if
daily quotations are not generally available) to Capital by
at least three recognized dealers in U.S. Government
securities selected by Capital. In the event that Capital
4
determines in good faith that for any reason Capital cannot
determine the Treasury Bill Rate for any quarter as provided
above in this Section, the Treasury Bill Rate for such
quarter will be the arithmetic average of the per annum
secondary market discount rates based upon the closing bids
during such Calendar Period for each of the issues of
marketable interest-bearing U.S. Treasury securities with a
remaining maturity of not less than 80 nor more than 100
days, as chosen and quoted daily for each business day in
New York City (or less frequently if daily quotations are
not generally available) to Capital by at least three
recognized dealers in U.S. Government securities selected by
Capital. As used in Sections 2.03-2.05 hereof, the term
"Calendar Period" means a period of fourteen calendar days,
and the term "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System.
Section 2.04. The Ten Year Constant Maturity
Rate. Except as described below in this Section, the "Ten
Year Constant Maturity Rate" for each quarter will be the
arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (as defined below) (or the one
weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the
Calendar Period immediately preceding the last ten calendar
days preceding the quarter for which the Applicable Rate on
the Loan is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Ten
Year Average Yield during such Calendar Period, then the Ten
Year Constant Maturity Rate for such quarter will be the
arithmetic average of the two most recent weekly per annum
Ten Year Average Yields (or the one weekly per annum Ten
Year Average Yield, if only one such yield is published
during the relevant Calendar Period), as published weekly
during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by
Capital. In the event that a per annum Ten Year Average
Yield is not published by any Federal Reserve Bank or by any
U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such
quarter will be the arithmetic average of the two most
recent weekly per annum average yields to maturity (or the
one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period)
for all of the actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special
Securities (as defined below)) then having remaining
maturities of not less than eight nor more than twelve
years, as published during such Calendar Period by the
Federal Reserve Board or, if the Federal Reserve Board does
5
not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by
Capital. In the event that Capital determines in good faith
that for any reason Capital cannot determine the Ten Year
Constant Maturity Rate for any quarter as provided above in
this Section, then the Ten Year Constant Maturity Rate for
such quarter will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date not less than eight or more than twelve years
from the date of each such quotation, as chosen and quoted
daily for each business day in New York City (or less
frequently if daily quotations are not generally available)
to Capital by at least three recognized dealers in U.S.
Government securities selected by Capital. As used in
Sections 2.04-2.05 hereof, the term "Special Securities"
means securities which can, at the option of the holder, be
surrendered at face value in payment of any Federal estate
tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount. As used in this
Section, the term "Ten Year Average Yield" means the average
yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to
constant maturities of ten years).
Section 2.05. The Thirty Year Constant Maturity
Rate. Except as described below in this Section, the
"Thirty Year Constant Maturity Rate" for each quarter will
be the arithmetic average of the two most recent weekly per
annum Thirty Year Average Yields (as defined below) (or the
one weekly per annum Thirty Year Average Yield, if only one
such yield is published during the relevant Calendar
Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the last
ten calendar days preceding the quarter for which the
Applicable Rate on the Loan is being determined. In the
event that the Federal Reserve Board does not publish such a
weekly per annum Thirty Year Average Yield during such
Calendar Period, then the Thirty Year Constant Maturity Rate
for such quarter will be the arithmetic average of the two
most recent weekly per annum Thirty Year Average Yields (or
the one weekly per annum Thirty Year Average Yield, if only
one such yield is published during the relevant Calendar
Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government
department or agency selected by Capital. In the event that
a per annum Thirty Year Average Yield is not published by
the Federal Reserve Board or by any Federal Reserve Bank or
6
by any U.S. Government department or agency during such
Calendar Period, then the Thirty Year Constant Maturity Rate
for such quarter will be the arithmetic average of the two
most recent weekly per annum average yields to maturity (or
the one weekly per annum average yield to maturity, if only
one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special
Securities) then having remaining maturities of not less
than twenty-eight nor more than thirty-two years, as
published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board does not publish such
yields, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by Capital. In the
event that Capital determines in good faith that for any
reason Capital cannot determine the Thirty Year Constant
Maturity Rate for any quarter as provided above in this
Section, then the Thirty Year Constant Maturity Rate for
such quarter will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date not less than twenty-eight nor more than
thirty-two years from the date of each such quotation, as
chosen and quoted daily for each business day in New York
City (or less frequently if daily quotations are not
generally available) to Capital by at least three recognized
dealers in U.S. Government securities selected by Capital.
As used in this Section, the term "Thirty Year Average
Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of thirty
years).
Section 2.06. Additional Interest. In addition,
if at any time following the date hereof (a) Texaco shall be
required to withhold or deduct any amounts, for or on
account of any taxes, duties or governmental charges of
whatever nature imposed by the United States of America (or
any political subdivision thereof or therein), from the
interest payments to be made by Texaco on the Loan, or
(b) Capital shall be required to pay, with respect to its
income derived from the interest payments on the Loan, any
amounts, for or on account of any taxes, duties or
governmental charges of whatever nature imposed by the Turks
and Caicos Islands (or any political subdivision thereof or
therein), or any other taxing authority, then, in any such
case, Texaco will pay as interest such additional amounts
("Additional Interest") as may be necessary in order that
the net amounts received and retained by Capital after
7
paying such Additional Interest, or after such withholding
or deduction or the payment of such taxes, duties,
assessments or governmental charges, as the case may be,
shall result in Capital's having such funds as it would have
had in the absence of the obligation to pay such Additional
Interest, or such withholding or deduction or the payment of
such taxes, duties, assessments or governmental charges, as
the case may be.
Section 2.07. Extension of Interest Period.
Notwithstanding the provisions of Section 2.01, Texaco shall
have the right at any time during the term of the Loan, so
long as Texaco is not in default in the payment of interest
on the Loan, to extend the interest payment period to 60
months; provided that at the end of such period Texaco shall
pay all interest then accrued and unpaid together with
interest thereon at the weighted average rate applicable to
the Loan to the extent permitted by applicable law;
provided, further, that, during any such extended interest
period or at any time during which there is an uncured Event
of Default under the Loan, Texaco shall not pay dividends on
any of its shares of equity stock. Notwithstanding anything
else contained herein, the time within which all payments of
the principal of and interest on the Loan (or any
replacement loans) shall be made shall not be later than the
fiftieth anniversary of the issuance of the Preferred
Shares. Texaco covenants (x) not to exercise the right to
extend the interest period with respect to the Loan made
pursuant to the Preferred Stock Loan Agreement dated
October 27, 1993 or pursuant to the Common Stock Loan
Agreement dated October 27, 1993 (the "Prior Loans") unless
it exercises or has exercised the right to extend the
interest period with respect to the Loan in a way which will
insure that, during the entire time when an interest period
with respect to the Prior Loans has been extended under
their terms, the interest period with respect to the Loan
shall also be extended as provided herein, and (y) not to
exercise the right to extend the interest period with
respect to the Prior Loans if the specified maturity date on
the Loan would occur during such interest extension period.
Texaco shall give Capital such prior notice of its selection
of such interest payment period with respect to the Loan as
shall enable Capital to give at least eleven Business Days
prior notice to the holders of the Preferred Shares, and
Texaco shall cause Capital to give such notice to the
holders of the Preferred Shares.
8
ARTICLE III
PAYMENTS
Section 3.01. Method and Date of Payment. Each
payment by Texaco of principal and interest (including
Additional Interest, if any) on the Loan shall be made to
Capital in lawful money of the United States at such place
and to such account as may be designated in writing by
Capital.
ARTICLE IV
SUBORDINATION
Section 4.01. Subordination. Texaco and Capital
covenant and agree that the Loan is subordinate and junior
in right of payment to all Senior Indebtedness as provided
herein, but not to the obligations of other creditors such
as trade creditors. The term "Senior Indebtedness" shall
mean the principal, premium, if any, and interest on (i) all
indebtedness of Texaco (excluding the Prior Loans, with
which the Loan shall rank on a pari passu basis), whether
outstanding on the date hereof or hereafter created,
incurred or assumed, which is for money borrowed, or
evidenced by a note or similar instrument given in
connection with the acquisition of any business, properties
or assets, including securities, (ii) any indebtedness of
others of the kinds described in the preceding clause (i)
for the payment of which Texaco is responsible or liable as
guarantor or otherwise and (iii) amendments, renewals,
extensions and refundings of any such indebtedness, unless
in any instrument or instruments evidencing or securing such
indebtedness or pursuant to which the same is outstanding,
or in any such amendment, renewal, extension or refunding,
it is expressly provided that such indebtedness is not
superior in right of payment to the Loan. Obligations to
other creditors, including trade creditors, do not
constitute Senior Indebtedness. The Loan will rank pari
passu with, and will not be superior in right of payment to,
the Prior Loans. The Senior Indebtedness shall continue to
be Senior Indebtedness and entitled to the benefits of these
subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior
Indebtedness or extension or renewal of the Senior
Indebtedness.
In the event that (i) Texaco shall default in the
payment of any principal, or premium, if any, or interest on
any Senior Indebtedness when the same becomes due and
9
payable, whether at maturity or at a date fixed for
prepayment or declaration or otherwise or (ii) an event of
default occurs with respect to any Senior Indebtedness
permitting the holders thereof to accelerate the maturity
thereof and written notice of such event of default is given
to Texaco by the holders of Senior Indebtedness, then unless
and until such default in payment and event of default shall
have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities,
by set-off or otherwise) shall be made or agreed to be made
on account of the Loan or interest thereon or in respect of
any repayment, redemption, retirement, purchase or other
acquisition of the Loan.
In the event of (i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment,
composition or other similar proceeding relating to Texaco,
its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of Texaco,
voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings, (iii) any assignment
by Texaco for the benefit of creditors, or (iv) any other
marshalling of the assets of Texaco, all Senior Indebtedness
shall first be paid in full before any payment or
distribution, whether in cash, securities or other property,
shall be made to Texaco on account of the Loan. Any payment
or distribution, whether in cash, securities or other
property (other than securities of Texaco or any other
corporation provided for by a plan of reorganization or a
readjustment, the payment of which is subordinate, at least
to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Loan, to
the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment),
which would otherwise (but for these subordination
provisions) be payable or deliverable in respect to the Loan
shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness shall have
been paid in full. No present or future holder of any
Senior Indebtedness shall be prejudiced in the right to
enforce subordination of the indebtedness constituting the
Loan by any act or failure to act on the part of Texaco.
Senior Indebtedness shall not be deemed to have
been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the
amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, Capital
shall be subrogated to all the rights of any holders of
10
Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until
the Loan shall have been paid in full, and such payments or
distributions received by Capital, by reason of such
subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of
Senior Indebtedness, shall, as between Texaco and its
creditors other than the holders of Senior Indebtedness, on
the one hand, and Capital, on the other, be deemed to be a
payment by Texaco on account of Senior Indebtedness, and not
on account of the Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties.
Texaco represents and warrants to Capital that:
(a) Good Standing. Texaco is a corporation duly
established and validly existing under the laws of the
State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its
business as now being conducted.
(b) Power and Authority. Texaco has full power
and authority to enter into this Agreement and to incur
and perform the obligations provided for herein, all of
which have been duly authorized by all proper and
necessary action.
(c) Binding Agreement. This Agreement
constitutes the valid and legally binding obligation of
Texaco enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles.
ARTICLE VI
COVENANTS
Section 6.01. Covenants. Texaco agrees (i) to
use the proceeds of the Loan for working capital, for
retirement of debt and for other general corporate purposes,
(ii) to maintain direct or indirect 100% ownership of the
common shares of Capital, (iii) not to voluntarily dissolve,
wind-up or liquidate Capital so long as any Preferred Shares
11
are outstanding, (iv) to timely perform all of its duties as
Manager of Capital, (v) not to exercise the right pursuant
to Section 2.07 to extend the interest period with respect
to the Prior Loans unless it exercises or has exercised the
right to extend the interest period with respect to the Loan
in a way which will insure that, during the entire time when
an interest period with respect to the Prior Loans has been
extended under its terms, the interest period with respect
to the Loan shall also be extended and (vi) not to exercise
the right to extend the interest period with respect to the
Prior Loans if the specified maturity date on the Loan would
occur during such interest extension period.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. If one or more
of the following events (each an "Event of Default") shall
occur and be continuing:
(a) default in the payment of interest on the
Loan, including any Additional Interest in respect thereof,
when due for 10 days; provided that a valid extension of the
interest payment period by Texaco pursuant to Section 2.07
shall not constitute a default in the payment of interest
for this purpose;
(b) default in the payment of principal on the
Loan;
(c) dissolution or winding-up or liquidation of
Capital;
(d) the bankruptcy, insolvency or liquidation of
Texaco; or
(e) the breach by Texaco of any of its covenants
under the Loan;
then, in every such event, and at any time thereafter during
the continuance of such event, Capital will have the right
to declare the principal of and the interest on the Loan and
all other amounts payable hereunder to be forthwith due and
payable and to enforce its other rights as a defaulted
creditor with respect to the Loan, whereupon the same shall
become and be forthwith due and payable, without
presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything in this
Agreement to the contrary notwithstanding. If an Event of
12
Default specified in subparagraph (c) or (d) above shall
have occurred, the principal of and interest on the Loan and
all other amounts payable hereunder shall thereupon and
concurrently become due and payable without presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement to
the contrary notwithstanding.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. All notices hereunder
shall be deemed given by a party hereto if in writing and
delivered personally or by telegram or facsimile
transmission or by registered or certified mail (return
receipt requested) to the other party at the following
address for such party (or at such other address as shall be
specified by like notice):
If to Capital, to:
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue,
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
If to Texaco, to:
Texaco Inc.
2000 Westchester Avenue,
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
Any notice given by mail or telegram or facsimile
transmission shall be effective when received.
Section 8.02. Binding Effect. Texaco shall have
the right at all times to assign any of its rights or
obligations under this Agreement to a direct or indirect
wholly owned subsidiary of Texaco; provided that, in the
event of any such assignment, Texaco shall remain jointly
and severally liable for all such obligations. Capital may
13
not assign any of its rights hereunder without the prior
written consent of Texaco. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of
Texaco and Capital and their respective successors and
assigns. Any assignment by Texaco or Capital in
contravention of this Section 8.02 shall be null and void.
Section 8.03. Governing Law. EXCEPT AS TO
MATTERS RELATING TO THE AUTHORIZATION, EXECUTION AND
DELIVERY OF THIS AGREEMENT, WHICH SHALL BE GOVERNED BY THE
LAWS OF THE TURKS AND CAICOS ISLANDS IN THE CASE OF CAPITAL,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 8.04. Counterparts. This Agreement may
be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall
constitute one and the same instrument.
Section 8.05. Amendments. This Agreement may be
amended by mutual consent of the parties in the manner the
parties shall agree; provided that, so long as any of the
Preferred Shares shall remain outstanding, no such amendment
shall be made, and no termination of this Agreement shall
occur, without the prior consent of at least 66-2/3% of the
holders of the Preferred Shares, in writing or at a duly
constituted meeting of such holders, unless and until the
Loan and all accrued and unpaid interest thereon (including
Additional Interest, if any) shall have been paid in full.
14
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
TEXACO INC.
By: Peter M. Wissel
_____________________________
Title: Assistant Treasurer
TEXACO CAPITAL LLC
By Texaco Inc., as Manager
By: Shelby Faber
_____________________________
Title: Assistant Treasurer
15
EXHIBIT 99.3
AGREEMENT AS TO LIABILITIES
AGREEMENT, dated as of June 8, 1994, between
Texaco Inc. ("Texaco"), a corporation organized under the
laws of the State of Delaware, United States of America, and
Texaco Capital LLC, a limited life company organized under
the laws of the Turks and Caicos Islands ("Capital").
WHEREAS, Capital has issued and sold
14,000,000 6-7/8% Cumulative Guaranteed Monthly Income
Preferred Shares, Series A (the "Series A Preferred Stock");
WHEREAS, Capital intends to issue and sell up to
5,175,000 Cumulative Adjustable Rate Monthly Income
Preferred Shares, Series B (the "Series B Preferred Stock,
the Series A Preferred Stock and the Series B Preferred
Stock being collectively called the "Preferred Stock") with
a liquidation preference (the "Liquidation Preference") of
$25 per share;
WHEREAS, it is a condition precedent to the
issuance of the Series B Preferred Stock that Texaco enter
into this Agreement;
NOW THEREFORE, Texaco and Capital hereby agree as
follows:
Section 1.01. Guarantee by Texaco. Subject to
the terms and conditions hereof, Texaco hereby irrevocably
and unconditionally guarantees to each person or entity to
whom Capital is now or hereafter becomes indebted or liable
(other than any holder of the Preferred Stock in such
holder's capacity as such a holder) (the "Beneficiaries")
the full payment, when and as due, regardless of any
defense, right of set-off or counterclaim which Capital may
have or assert, of any and all indebtedness and liabilities
of Capital to such Beneficiaries (collectively, the
"Obligations") to the extent that the aggregate Obligations
of Capital are at any time in excess of its income and
assets. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice
hereof. The Holders of the Series B Preferred Stock shall
not constitute beneficiaries under the Agreement As To
Liabilities dated as of October 27, 1993 amongst Texaco and
Capital. The holders of the Series A Preferred Stock shall
not constitute beneficiaries under this Agreement.
Section 1.02. Term of Agreement. This Agreement
will remain in effect until such time as all of the Series B
Preferred Stock shall have been redeemed in accordance with
their terms or the Series B Preferred Stock and the shares
of Capital's common stock shall have been purchased and
canceled by Capital or Texaco, as the case may be. This
Agreement is continuing, irrevocable, unconditional and
absolute.
Section 1.03. Waiver of Notice. Texaco hereby
waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, presentment,
demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and
demands.
Section 1.04. Releases, Waivers, Etc. The
obligations, covenants, agreements and duties of Texaco
under this Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by
Capital of any express or implied agreement,
covenant, term or condition relating to the
Obligations to be performed or observed by
Capital;
(b) the extension of time for the payment by Capital
of all or any portion of the Obligations or for
the performance of any other obligation under,
arising out of, or in connection with, the
Obligations;
(c) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce,
assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of
Capital granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other
similar proceedings affecting, Capital or any of
the assets of Capital; or
2
(e) the settlement or compromise of any Obligation
guaranteed hereby or any obligation hereby
incurred.
There shall be no obligation of the Beneficiaries to give
notice to, or obtain consent of, Texaco with respect to the
happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may
enforce this Agreement directly against Texaco, and Texaco
waives any right or remedy to require that any action be
brought against Capital or any other person or entity before
proceeding against Texaco.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives
of Texaco and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Notices. Any notice, request or
other communication required or permitted to be given
hereunder shall be given in writing by delivering the same
against receipt therefor by facsimile transmission
(confirmed by mail) or telex, addressed as follows (and if
so given, shall be deemed given when mailed or upon receipt
of an answer-back, if sent by telex), to wit:
Texaco Capital LLC
c/o Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
Texaco Inc.
2000 Westchester Avenue
White Plains, NY 10650
Facsimile no.: (914) 253-7753
Attention: Treasurer
Section 2.03. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
3
THIS AGREEMENT is executed as of the day and year
first above written.
TEXACO INC.
By: Peter M. Wissel
____________________________
Title: Assistant Treasurer
TEXACO CAPITAL LLC
By: Texaco Inc., as Manager
By: Shelby Faber
____________________________
Title: Assistant Treasurer
4
EXHIBIT 99.4
TEXACO ANNOUNCES PUBLIC ISSUANCE
--------------------------------
OF $112.5 MILLION IN PREFERRED SHARES
-------------------------------------
FOR IMMEDIATE RELEASE: WEDNESDAY, JUNE 8, 1994.
- - ------------------------------------------------
WHITE PLAINS, N.Y., June 8 - Texaco Inc. announced today that its wholly
owned finance subsidiary, Texaco Capital LLC, a company organized under the
laws of the Turks and Caicos Islands, British West Indies, is issuing $112.5
million of Cumulative Adjustable Rate Monthly Income Preferred Shares ("MIPS"),
Series B, in a public offering.
The preferred shares are being offered at $25 per share, callable at par
after five years, with a variable dividend rate which is reset quarterly. The
dividend rate will be equal to 88 percent of the highest of three U.S. Treasury
Department maturities (three-month, ten-year and 30-year). The dividend rate
for the period from June 15, 1994, to September 30, 1994, will be 6.4 percent
per annum. The payments of dividends and payments on liquidation or redemption
with respect to the Preferred Shares are guaranteed by Texaco Inc. Dividends
on the Preferred Shares will be paid monthly commencing June 30, 1994.
Proceeds from the sale will be loaned to Texaco Inc. to be used for
working capital, retirement of debt and other general corporate purposes.
The sale is being led by Goldman, Sachs & Co. with Dean Witter Reynolds
Inc.; A. G. Edwards & Sons, Inc.; Kidder, Peabody & Co. Incorporated; Lehman
Brothers; Morgan Stanley & Co. Incorporated; PaineWebber Incorporated;
Prudential Securities Incorporated; and Smith Barney Inc.
The Preferred Shares are issued under a shelf registration statement that
was filed with the Securities and Exchange Commission in October 1993. The
Preferred Shares will be listed on the New York Stock Exchange (Symbol TXCPrB).
- xxx -
CONTACTS: Dave Dickson (914) 253-4128
Jim Swords (914) 253-4103