1
EXHIBIT 99.12
TCR HOLDING CORPORATION,
A DELAWARE CORPORATION
SECURITY AND PLEDGE AGREEMENT
BY
TCR HOLDING CORPORATION,
A DELAWARE CORPORATION
IN FAVOR OF
TRANSAMERICAN ENERGY CORPORATION,
A DELAWARE CORPORATION
DATED AS OF DECEMBER ___, 1998
2
TCR HOLDING CORPORATION
(A DELAWARE CORPORATION)
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (this "Agreement") is made and
entered into as of December ___, 1998, by TCR Holding Corporation, a Delaware
corporation (the "Company"), in favor of TransAmerican Energy Corporation, a
Delaware corporation (the "Lender").
RECITALS
WHEREAS, TransAmerican Refining Corporation, a Texas corporation
("TARC") has executed and delivered to the Lender its Promissory Note dated
October 1, 1998, payable to the order of the Lender in the stated principal
amount of $50,000,000 (the "TARC Working Capital Note"), to evidence advances
made from time to time by the Lender to TARC as provided in the TARC Working
Capital Note; and
WHEREAS, the outstanding principal balance of the TARC Working Capital
Note on the date hereof is $_________________________, and accrued but unpaid
interest on the TARC Working Capital Note on the date hereof is
$_________________________; and
WHEREAS, as part of the consideration for the transfer of certain assets
of TARC by TARC to the Company, and pursuant to an Assignment and Assumption
Agreement (TARC Working Capital Note) of even date herewith, TARC assigned all
of its rights, titles, and interests in the TARC Working Capital Note to the
Company, and the Company assumed the payment and performance of all of the
indebtedness and obligations of the "Maker" under the TARC Working Capital Note
(the "Assignment and Assumption"); and
WHEREAS, in order to induce the Lender to consent to the Assignment and
Assumption and to secure the payment and performance in full of the obligations
of the Company under the TARC Working Capital Note by reason of the Assignment
and Assumption, the parties hereto desire to set forth their mutual
understanding and certain agreements regarding the terms and conditions of the
grant of a security interest in the Pledged Collateral (as defined below);
NOW, THEREFORE, in consideration of, and for the purposes set forth in,
the premises and for the good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Lender hereby
agree as follows:
Section 1. Definitions.
(a) As used in this Agreement, capitalized terms not otherwise
defined herein have the meanings set forth in the TARC Working Capital
Note or, if not defined therein, the meanings set forth in the TEC
Indenture (hereinafter defined), and the following terms shall have the
respective meanings set forth below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Default" and "Event of Default" shall have the meanings assigned
to those terms in Section 7(a) of this Agreement.
3
"GAAP" means generally accepted accounting principles of the
United States of America, consistently applied.
"Indebtedness" means the following indebtedness and liabilities
of the Company (and any extensions, renewals, refunding, increases,
substitutions, replacements, consolidations, modifications or
rearrangements of such indebtedness and liabilities, regardless of
whether the Company executes any extension agreement or renewal
instrument):
(i) all amounts advanced or expended by the Lender under
the TARC Working Capital Note and/or under or in connection with
this Agreement, all reasonable costs and out-of-pocket expenses
(excluding expenses representing administrative overhead) at any
time and from time to time incurred by the Lender in connection
with the administration and/or enforcement of this Agreement
(including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel employed by the Lender in
connection therewith), and all indemnities at any time and from
time to time payable hereunder to the Lender, and
(ii) all principal, premium and accrued interest owing on the
TARC Working Capital Note, and
(iii) all other amounts payable by the Company under the TARC
Working Capital Note.
"Obligations" shall have the meaning assigned to that term in
Section 2 of this Agreement.
"Offering Circular" means the offering circular dated December
___, 1998, pursuant to which $150,000,000 in aggregate principal amount
of the 15% Senior Secured Notes due 2003 of TransAmerican Refining
Corporation, a Texas corporation, were issued.
"Pledged Collateral" shall have the meaning assigned to that term
in Section 2 of this Agreement.
"Perfection Certificate" means the certificate delivered to the
Lenders substantially in the form of EXHIBIT A hereto.
"TEC Indenture" means the Indenture dated as of June 13, 1997
between TEC and the TEC Indenture Trustee, pursuant to which TEC's 11.5% Senior
Secured Notes due 2002 and 13% Senior Secured Discount Notes due 2002 were
issued, as supplemented by First Supplemental Indenture dated as of December 30,
1997, by Second Supplemental Indenture dated as of November 13, 1998, and by
Third Supplemental Indenture dated as of December ___, 1998.
"TEC Indenture Trustee" means Firstar Bank of Minnesota, N.A., as
Trustee under the TEC Indenture, and its successors and assigns in such
capacity.
"TransContinental" means TransContinental Refining Corporation, a
Delaware corporation.
2
4
"TransContinental Common Stock" means the common stock, par value
$.01 per share, of TransContinental.
"TransContinental Preferred Stock" shall have the meaning
assigned to that term in the Offering Circular.
"TransContinental Stockholders Agreement" means the Stockholders
Agreement (TransContinental) dated as of December ___, 1998, among
TransContinental, the Company, and the holders of the TransContinental
Preferred Stock..
"UCC" means the Uniform Commercial Code as in effect in the State
of New York.
(b) All terms used in this Agreement which are defined in the
UCC, other than those which are defined in the TEC Indenture or
specifically defined in Section 1(a) above, shall have the same meaning
herein as in the UCC.
Section 2. Grant of Security Interest.
(a) The Company hereby pledges to the Lender, and grants to the
Lender a security interest in all of the Company's right, title and
interest in, to and under any and all of the following described
property, rights and interests, in each case, wherever located, whether
now owned or hereafter acquired or arising, all accessions and additions
thereto, all substitutions and replacements therefor, and all proceeds
and products thereof (collectively, the "Pledged Collateral"):
(i) all of the issued and outstanding shares of the
TransContinental Common Stock identified on Schedule 2(a)
attached hereto; and
(ii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
(b) The inclusion of proceeds in this Agreement does not
authorize the Company to sell, dispose of or otherwise use the Pledged
Collateral in any manner not specifically authorized hereby or under the
TEC Indenture.
(c) This Agreement secures the prompt and complete (i) payment of
all obligations of the Company to the Lender under the TARC Working
Capital Note, whether such obligations are now existing or hereafter
arising, and all renewals, extensions, amendments, supplements and
rearrangements thereof and (ii) payment and performance and all
representations, covenants and conditions by the Company contained or
incorporated herein, in each case whether for principal, interest,
prepayment premium, taxes, costs, losses, compensation, reimbursements,
fees, expenses or any other amount payable to the Lender under the terms
of this Agreement (all such obligations, covenants and conditions
described in the foregoing clauses (i) and (ii) being hereinafter
collectively referred to as the "Obligations").
3
5
Section 3. Representations and Warranties. The Company represents and
warrants, as of the date hereof, to the Lender as follows:
(a) The chief executive office and principal place of business of
the Company is located at 0000 X. Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000. Any and all Pledged Collateral not
delivered to the Lender or its designated agent is and will continue to
be located only in the States of Texas and Louisiana.
(b) The Company is the legal and beneficial owner of all of the
Pledged Collateral free and clear of any lien, security interest, charge
or encumbrance of any kind or nature, except for the lien and security
interest created hereby and for Permitted Liens, and has not made any
other pledge, assignment, mortgage, hypothecation or transfer of the
Pledged Collateral except as permitted hereunder. Except for the lien
and security interest created hereby, all of the Pledged Collateral is
free from any material credit, deduction, allowance, defense, dispute,
setoff or counterclaim, and there is no material extension or indulgence
with respect thereto. The Pledged Collateral is not subject to any put,
call, option or other right in favor of any other person whatsoever.
(c) The Pledged Collateral is accurately described in Schedule
2(a) hereto.
(d) This Agreement has been duly executed and delivered by the
Company and creates a valid security interest in, and lien on, the
Pledged Collateral securing the payment of the Obligations. Upon the
physical delivery of the certificates evidencing the Pledged Collateral
to the Lender or its designated agent and the making of the filing of a
financing statement in the Office of the Secretary of State of Texas and
the taking of all other actions necessary to perfect the security
interests created hereby, including, without limitation, those actions
specified in Section 2(a) and Section 4, the security interests created
by this Agreement will be duly perfected security interests subject to
no equal or prior lien, security interest or encumbrance of any kind or
nature other than Permitted Liens.
(e) The Company has the requisite corporate power and authority
to pledge the Pledged Collateral in the manner hereby done or
contemplated and to defend its title thereto against the lawful claims
of all persons whomsoever.
(f) Neither the execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder,
nor the transactions herein contemplated will (i) violate the Company's
charter or bylaws, (ii) violate the terms of any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document
to which the Company is a party, (iii) violate any law, order, rule or
regulation applicable to the Company of any court or any government,
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or its properties, or (iv) result
in or require the creation or imposition of any lien (other than the
lien contemplated hereby), upon or with respect to any of the property
now owned or hereafter acquired by the Company, which violation or
conflict would have a material adverse effect on the financial
condition, business, assets or liabilities of the Company or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder.
4
6
(g) The Pledged Collateral includes all of the issued and
outstanding shares of TransContinental Common Stock owned by the Company
on the date hereof, which shares are described in Schedule 2(a) attached
hereto.
(h) No consent or approval which has not been obtained on or
prior to the date hereof of any other person or entity and no
authorization, approval or other action (other than delivery of physical
certificates evidencing the Pledged Collateral) by, and no notice to or
filing with any governmental body (other than UCC filings), regulatory
authority or securities exchange, was or is necessary as a condition to
the validity of the pledge hereunder of the Pledged Collateral, and such
pledge is effective to vest in the Lender the rights of the Lender in
the Pledged Collateral as set forth herein. Except for the limitations
and restrictions imposed by the TransContinental Stockholders Agreement,
there are no restrictions on the transferability of any of the Pledged
Collateral transferred or delivered by the Company hereunder or, except
for the limitations and restrictions imposed by the TCR Holding
Stockholders Agreement and restrictions related to federal and state
securities laws governing the sale of "restricted stock" or "control
stock," with respect to the foreclosure, transfer or disposition thereof
by the Lender.
Section 4. Covenants. During the term of this Agreement and until all of
the Obligations with respect to the Indebtedness have been fully and finally
paid and discharged in full, the Company covenants and agreed with the Lender
that:
(a) Except in the ordinary course of business, the Company will
not make any compromise or settlement with respect to the Pledged
Collateral without notice to or consent of the Lender.
(b) The Company shall deliver to the Lender or its designated
agent concurrently with the execution of this Agreement or, to the
extent acquired subsequent to the date of execution hereof, immediately
upon the Company's acquisition thereof: (i) all certificates and
instruments representing the Pledged Collateral and a revised Schedule
2(a), and (ii) all certificates, instruments and notes representing any
proceeds of the Pledged Collateral. Any and all Pledged Collateral
delivered to the Lender or its designated agent in the form of
certificates, securities, instruments, or documents shall be accompanied
by undated duly executed powers in blank and by such other instruments
of transfer or documents as the Lender may reasonably request. The
Lender may hold the certificates representing the Pledged Collateral
delivered to it in its own name or in the name of its nominee, all in
form and substance satisfactory to the Lender.
(c) From time to time, the Company shall, at its own expense,
promptly give, execute, deliver, file and/or otherwise formalize any
such notice, statement, instrument, document, agreement or other papers,
and do all such other acts and things, as may be necessary or desirable,
or and as the Lender may reasonably request, in order to create,
evidence, preserve, perfect, validate or continue any lien or security
interest created pursuant to this Agreement or to enable the Lender to
exercise or enforce its rights hereunder with respect to such lien or
security interest, or otherwise further to effect the purposes of this
Agreement. Without limiting the generality of the foregoing, the Company
shall, at any time or from time to time upon the request of the Lender
and at the Company's own expense, execute, acknowledge, witness,
deliver, file and/or record such financing and continuation statements,
notices, additional assignments and other documents or instruments (all
of which shall be in form and substance reasonably satisfactory to the
Lender
5
7
and its counsel) as the Lender may from time to time reasonably request
for the perfection of the liens and security interests created hereby.
(d) The Company shall promptly notify the Lender (i) of any
material changes in any fact or circumstance represented or warranted by
the Company with respect to any material portion of the Pledged
Collateral, (ii) of any material impairment of the Pledged Collateral
and (iii) of any claim, action or proceeding affecting title to all or
any material portion of the Pledged Collateral.
(e) Except for the liens and security interests created by this
Agreement and the Permitted Liens in the Pledged Collateral, the Company
shall at its own expense defend the Pledged Collateral against any and
all liens, claims, security interests and other encumbrances or
interest, howsoever arising and shall maintain and preserve the security
interest granted hereunder with respect to the Pledged Collateral as
long as this Agreement shall remain in full force and effect. The
Company shall not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral except as permitted
hereunder.
(f) The Company shall at all times keep accurate and complete
records with respect to the Pledged Collateral, including, without
limitation, records of all payments made, credit granted and proceeds
received in connection therewith.
(g) The Company shall not relocate its principal place of
business or chief executive office to a county or state other than that
specified in Section 3(a) of this Agreement unless the Company gives 30
days' prior written notice to the Lender, which notice shall specify the
county and state into which such relocation is to be made. The Pledged
Collateral, to the extent not delivered to the Lender pursuant to
Section 2, will be kept at the location specified in Section 3(a) of
this Agreement, and the Company will not remove the Pledged Collateral
from such location without providing at lease 30 days' prior written
notice to the Lender.
(h) The Lender, or its representative, shall at all times have
full and free access during normal business hours to all of the books,
correspondence and records of the Company relating to the Pledged
Collateral (other than information that is privileged and confidential);
the Lender and its representatives may examine the same, make abstracts
therefrom and make photocopies thereof; and the Company agrees to render
to the Lender, at the Company's cost and expense, such clerical and
other assistance as may be reasonably requested by the Lender with
regard thereto.
(i) If, while this Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the
capital structure, including the creation of any subscription or other
rights relating to the Pledged Collateral, is declared or made, or
proposed to be declared or made, by TransContinental, all substituted
and additional securities or interest issued with respect to the Pledged
Collateral and evidenced by certificates shall be endorsed in blank by
the Company promptly upon receipt thereof or otherwise appropriately
transferred to the Lender in negotiable form, and all certificates or
instruments evidencing such securities shall be delivered to the Lender
to be held under the terms of this Agreement in the same manner as, and
as a part of, the Pledged Collateral. All Pledged Collateral shall be
evidenced by one or more certificates. Any securities that may be issued
upon exercise of any subscription or other rights relating to the
Pledged Collateral shall be endorsed in blank and delivered to the
Lender with any necessary powers.
6
8
Section 5. Powers of the Secured Party.
(a) The Company hereby irrevocably designates and appoints the
Lender as its attorney-in-fact, with full power of substitution, for the
purposes of carrying out the provisions of this Agreement and taking any
action and executing any instrument, including, without limitation, any
financing statement or continuation statement, and taking any other
action to maintain the validity, perfection, priority and enforcement of
the security interest intended to be created hereunder, that the Lender
may reasonably deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest.
(b) Without limiting the generality of Section 5(a) hereof, the
Company hereby irrevocably authorizes and empowers the Lender, upon the
occurrence and during the continuation of any Event of Default, at the
expense of the Company, either in the Lender's own name or in the name
of the Company, at any time and from time to time:
(i) to ask, demand, receive, issue a receipt for, give
acquittance for, settle and compromise any and all monies which
may be or become due or payable or remain unpaid at any time or
times to the Company, and any and all other property which may be
or become deliverable at any time or times to the Company, under
or with respect to the Pledged Collateral;
(ii) to endorse any drafts, checks, orders or other
instruments for the payment of money payable to the Company on
account of the Pledged Collateral (including any such draft,
check, order or instrument issued by any insurance company
payable jointly to the Company and the Lender); and
(iii) to settle, compromise, prosecute or defend any action,
claim or proceeding, or take any other action, all either in its
own name or in the name of the Company or otherwise, which the
Lender may deem to be necessary or advisable for purpose of
exercising and enforcing its powers and rights under this
Agreement or in the furtherance of the purposes hereof, including
any action which by the terms of this Agreement is to be taken by
the Company.
(c) Nothing in this Agreement shall be construed as requiring or
obligating the Lender to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to
present or file any claim or notice, or to take any other action with
respect to any of the Pledged Collateral or any part thereof or the
amounts due or to become due in respect thereof or any property covered
thereby, or to collect or enforce the payment of any amounts assigned to
it or to which it may otherwise be entitled hereunder at any time or
times other than to account for amounts or Pledged Collateral received.
(d) The Lender shall be entitled at any time to file this
Agreement, or a photographic or any other reproduction of this
Agreement, as a financing statement, but the failure of the Lender to do
so shall not impair the validity or enforceability of this Agreement.
The Lender shall have no duty to comply with any recording, filing or
other legal requirements necessary to establish or maintain the
validity, priority or enforceability of, or the Lender's rights in or
to, any of the Pledged Collateral.
7
9
(e) In its discretion, the Lender may discharge taxes and other
encumbrances at any time levied or placed on any of the Pledged
Collateral, make repairs thereto and pay any necessary filing fees. The
Company agrees to reimburse the Lender on demand for any and all
reasonable expenditures so made with interest on unpaid amounts at the
maximum rate permitted by law. The Lender shall have no obligation to
the Company to make any such expenditures, nor shall the making thereof
relieve the Company of any default.
(f) The Lender's sole duty with respect to the custody, safe
keeping and physical preservation of the Pledged Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to
deal with such Pledged Collateral in the same manner as the Lender deals
with similar property for its own account.
(g) If an Event of Default has occurred and is continuing, the
Lender may at any time at its option, transfer to itself or any nominee
any securities constituting the Pledged Collateral, receive any income
thereon and hold such income as additional Pledged Collateral or apply
it to the Indebtedness.
Section 6. Voting Rights, Dividends, Etc.
(a) Until an Event of Default shall have occurred and be
continuing:
(i) except as otherwise provided in this Agreement, but
subject to the provisions of the TransContinental Stockholders
Agreement, the Company shall be entitled to exercise any and all
voting or consensual rights and powers, including subscription
rights, in relation to the Pledged Collateral; provided, however,
that no vote shall be cast or consent, waiver or ratification
given or action taken which would materially impair the Pledged
Collateral or the value thereof or violate any provision of this
Agreement or any other ancillary document;
(ii) except as otherwise provided in this Agreement, the
Company shall be entitled to receive and retain any and all
dividends, distributions or other payments in respect of the
Pledged Collateral and the Lender, upon receipt of any of the
foregoing, shall promptly pay or distribute the same to the
Company, and, to the extent so permitted, any distributions
received by the Company and transferred to other persons shall
pass free and clear of the lien and security interest hereof; and
(iii) the Lender shall execute and deliver to the Company or
cause to be executed and delivered to the Company, all such
proxies, powers of attorney, dividend orders and other
instruments as the Company may reasonably request for the purpose
of enabling it to exercise the voting or consensual rights and
powers which the Company is entitled to exercise pursuant to the
foregoing Section 6(a)(i) or to receive the dividends,
distributions or other payments which the Company is authorized
to retain pursuant to the foregoing Section 6(a)(ii).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Company to exercise the voting or consensual
rights and powers which the Company would otherwise be entitled to
exercise pursuant to Section 6(a)(i) and to receive the dividends,
8
10
distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested
in the Lender, which shall then have the sole and exclusive right and
authority to exercise, in its sole discretion, all such voting and
consensual rights and powers and to receive and retain as Pledged
Collateral all such dividends, distributions and other payments. Without
limiting the foregoing, in such event the Lender may exercise all voting
and corporate rights at any meeting of any corporation issuing any such
securities and any and all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any such
securities as if it were the absolute owner thereof, including, without
limitation, the rights to exchange at its discretion, any and all such
securities upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any corporation issuing any
such securities or upon the exercise by any such issuer or the Lender of
any right, privilege or option pertaining to any such securities, and,
in connection therewith, to deposit and deliver any and all securities
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it my determine, all
without liability except to account for the property actually received
by it, but the Lender shall have no duty to exercise any of the
aforesaid rights, privileges or options and the Lender shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Default.
(a) It shall constitute a Default or an Event of Default under
this Agreement if the Company shall (a) default in the payment of any
portion of the principal or interest owing on the TARC Working Capital
Note and such default is not cured within five (5) days after notice
thereof is received by the Company from the holder of the TARC Working
Capital Note, (b) apply for or consent to the appointment of a receiver,
trustee, intervenor, custodian or liquidator of the Company or of all or
a substantial part of the Company's assets, (c) be adjudicated a
bankrupt or insolvent or file a voluntary petition for bankruptcy, (d)
make a general assignment for the benefit of creditors, (e) file a
petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws, or
(f) file an answer admitting the material allegations of, or consent to,
or default in answering, a petition filed against the Company in any
bankruptcy reorganization or insolvency proceeding, or take other action
for the purpose of effecting any of the foregoing.
(b) If an Event of Default shall have occurred and is continuing,
in addition to any other rights and remedies that may be available to
the Lender under the UCC or the TARC Working Capital Note or under
Section 5(a) or 5(b) of this Agreement or otherwise under this Agreement
or at law, the Lender shall also have the following rights and powers:
(i) The Lender may, without being required to give any notice
except as hereinafter provided, sell the Pledged Collateral, or
any part thereof, at public or private sale, for cash, upon
credit or for future delivery and at such price or prices as the
Lender deem satisfactory, and the Lender and/or its collateral
agent may be the purchaser of any or all of the Pledged
Collateral so sold and thereafter hold the same absolutely free
from any right or claim of whatsoever kind by or on behalf of the
Company, and the Indebtedness or any portion of the Indebtedness
may be applied as a credit against the purchase price.
9
11
(ii) Upon any such sale, the Lender shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged
Collateral so sold. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or rights of
whatsoever kind by or on behalf of the Company, including any
equity or rights of redemption of the Company, and the Company
hereby specifically waives, to the full extent permitted by
applicable law, all rights of redemption, stay or appraisal which
it has or may have under any rule or law or statute now existing
or hereafter adopted.
(iii) The Lender shall give the Company ten (10) Business
Days' written notice (which the Company agrees is reasonable
notification within the meaning of Section 9-504 of the UCC) of
its intention to make any such public or private sale. Such
notice, in case of public sale, shall state the time and place
fixed for such sale and, in case of a private sale, shall state
the date after which such sale is to be made.
(iv) Any such public sale shall be held at such time or times
within ordinary business hours and at such places as the Lender
may fix in the notices of such sale. At any such sale the Pledged
Collateral may be sold in one lot as an entirety or in separate
parcels, as the Lender may, in its sole discretion, determine.
(v) The Lender shall not be obligated to make any sale of the
Pledged Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of the Pledged Collateral may
have been given. The Lender may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may, without further notice, be
made at any time or place to which the same shall be so
adjourned.
(vi) In case of any sale of all or any part of the Pledged
Collateral on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Lender until the
selling price is paid by the purchaser thereof, but the Lender
shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Pledged Collateral so sold
and, in case of any such failure, such Pledged Collateral may
again be sold upon like notice.
(vii) The Lender, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law
or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral, or any portion
thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(viii) The Company agrees that if any Event of Default shall
have occurred and be continuing, then the Lender shall have the
right to take possession of the Pledged Collateral, and for that
purpose the Lender may, so far as the Company can give authority
therefor, enter upon any premises on which the Pledged Collateral
may be situated and remove the same therefrom with or without
notice or process of law. The Company waives any and all rights
that it may have to a judicial hearing in advance of the
enforcement of any of the Lender's rights hereunder, including,
without limitation, its right following an Event of Default to
take immediate possession of the Pledged Collateral and to
exercise its rights with respect thereto. To the extent that any
of the Obligations are
10
12
to be paid or performed by a person other than the Company, the
Company waives and agrees not to assert any rights or privileges
which it may have under Section 9-112 of the UCC.
(ix) If under mandatory requirements of applicable law, the
Lender shall be required to make disposition of the Pledged
Collateral within a period of time that does not permit the
giving of notice to the Company as hereinbefore provided, the
Lender need give the Company only such notice of disposition as
shall be reasonably practicable in view of such mandatory
requirements of law.
(x) The Lender may instruct the obligor or obligors on any
agreement, instrument or other obligation constituting the
Pledged Collateral to make any payment or render any performance
required by the terms of such agreement, instrument or obligation
directly to the Lender or its designee.
(c) The Lender shall incur no liability as a result of the sale
of the Pledged Collateral, or any part thereof, at any private sale
other than for its own gross negligence or willful misconduct. The
Company hereby waives, to the maximum extent permitted by applicable
law, any claims against the Lender arising by reason of the fact that
the price at which the Pledged Collateral may have been sold at such
private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Indebtedness.
(d) The Lender shall not be obligated to pursue or exhaust its
rights and remedies against any particular Pledged Collateral or other
security for the Indebtedness before pursuing or enforcing its rights
and remedies against any other Pledged Collateral or other security for
the Indebtedness.
(e) To the extent permitted by law, the Company hereby waives (i)
any rights to require the Lender to proceed first against any other
Person, to exhaust its rights in the Pledged Collateral or other
security for the Indebtedness or to pursue any other right that the
Lender might have, (ii) with respect to the TARC Working Capital Note,
presentment and demand for payment, protest, notice of protest and
nonpayment, notice of dishonor, notice of the intention to accelerate
and notice of acceleration (except as otherwise set forth in the TARC
Working Capital Note), and (iii) all rights of marshaling in respect of
any and all of the Pledged Collateral.
(f) Without precluding any other methods of sale, the Company
acknowledges that the sale of the Pledged Collateral shall have been
made in a commercially reasonable manner if conducted in conformity with
reasonable commercial practices of banks disposing of similar property.
The Lender shall not be liable for any depreciation in the value of the
Pledged Collateral.
(g) The Company agrees that its obligation to deliver the Pledged
Collateral is of the essence of this Agreement and that accordingly,
upon application to a court of equity having jurisdiction, the Lender
shall be entitled to a decree requiring specific performance by the
Company of such obligation.
11
13
(h) Remedies of the Lender are cumulative and the exercise of any
one or more of the remedies provided herein shall not be construed as a
waiver of any of the other remedies of the Lender.
(i) If an Event of Default shall have occurred and be continuing,
the proceeds of any sale of or other realization upon all or any part of
the Pledged Collateral and any other amounts held by the Lender under
this Agreement shall be applied by the Lender to the payment of the
Obligations in such manner and order of priority as the Lender may
determine in its sole discretion.
Any amounts remaining after such applications and the payment in full of
the TARC Working Capital Note with respect to the Indebtedness shall be remitted
to the Company, its successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
Section 8. Regarding Sales of Pledged Collateral.
(a) The Company recognizes that the Lender may be unable, or find
it undesirable, to effect a public sale of any or all the Pledged
Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws or otherwise, but may be compelled or desire to resort
to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to
the distribution or resale thereof in violation of the Securities Act.
The Company acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if
such sale were a public sale, but, notwithstanding such circumstances,
such private sale shall be deemed to have been made in a commercially
reasonable manner. The Lender shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary
to permit the issuing corporation of such securities to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if the issuing corporation would agree to do
so.
(b) The Company further agrees to use commercially reasonable
efforts to do or cause to be done all such other acts and things as may
be necessary to make such sale or sales of any portion or all of the
Pledged Collateral valid and binding and in compliance with any and all
applicable laws, regulations, order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any
such sale or sales, all at the Company's expense. The Company further
agrees that a breach of any of the covenants contained in this Section 8
will cause irreparable injury to the Lender, that the Lender has no
adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this Section 8 shall be
specifically enforceable against the Company, and the Company hereby
waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no
Event of Default has occurred.
Section 9. General Provisions.
(a) Continuing Security Interest: Binding Effect. This Agreement
shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect
12
14
until termination of the obligations of the Company under the TARC
Working Capital Note and the indefeasible payment in full thereafter of
the Obligations; (b) be binding upon the Company and its successors and
assigns; and (c) inure to the benefit of the Lender and its successors,
transferees and assigns. Without limiting the generality of the
foregoing clause (c), the Lender may assign or otherwise transfer any of
its rights under this Agreement to any other Person, and such Person
shall thereupon become vested with all the benefits in respect thereof
granted herein or otherwise to the Lender. Upon the termination of the
obligations of the Company under the TARC Working Capital Note and the
indefeasible payment in full thereafter of the Obligations, the Company
shall be entitled to the return, upon its request and at its expense, of
such of the Pledged Collateral as in the Lender's possession and as
shall not have been sold or otherwise disposed of pursuant to the terms
hereof.
(b) Security Interest Absolute. The lien and security interest
created hereunder and the Company's obligations hereunder and the
Lender's rights hereunder shall not be release, diminished, impaired or
adversely affected by the occurrence of any one or more of the following
events:
(i) The taking or accepting of any other security or
assurance for any or all of the Indebtedness;
(ii) Any release, surrender, exchange, subordination or loss
of any security or assurance at any time existing in connection
with any or all of the Indebtedness;
(iii) The modification of, amendment to, or waiver of
compliance with any terms of the TARC Working Capital Note;
(iv) Any renewal, extension and/or rearrangement of the
payment of any or all of the Indebtedness or any statement,
indulgence, forbearance or compromise that may be granted or
given by the Lender to the company or any other Person;
(v) any negligent, delay, omission, failure or refusal of the
Lender to make or prosecute any action in connection with any
agreement, document or other instrument evidencing, security or
assuring the payment of any of all of the Indebtedness;
(vi) the illegality, invalidity or unenforceability of all or
any part of the TARC Working Capital Note; or
(vii) any other circumstance (other than payment in full of
the Obligations) that might otherwise constitute a defense
available to, or a discharge of, the Company or any party to any
document in respect of the Obligations.
(c) Amendments. This Agreement or any term hereof may be amended
or changed only by an instrument in writing executed jointly by the
Company and the Lender.
(d) Remedies Cumulative. Each right, power and remedy herein
specifically granted to the Lender or otherwise available to it or now
or hereafter existing in law or in equity shall be cumulative and
concurrent, and shall be in addition to every other right, power and
remedy herein
13
15
specifically given or now or hereafter existing at law, in equity, or
otherwise (including, without limitation, all rights, powers and
remedies granted to a secured party under the UCC), and each such right,
power and remedy, whether specifically granted herein or otherwise
existing, may be exercised at any time and from time to time as often
and in such order as may be deemed expedient by the Lender in its sole
and complete discretion. The provisions of this Agreement may only be
waived by an instrument in writing signed by the Lender, and no failure
on the part of the Lender to exercise, and no delay in exercising, and
no course of dealing with respect to, any such right, power or remedy,
shall operate as a wavier thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right. No notice
to or demand on the Company hereunder shall, of itself, entitle the
Company to any other or further notice or demand in the same or similar
circumstances.
(e) Assignment. Neither this Agreement nor any interest herein or
in the Pledged Collateral, or any part thereof, may be assigned by the
Company without the prior written consent of the Lender, except as
expressly permitted herein or in the TARC Working Capital Note. The
Company hereby acknowledges and consents to the Pledged Collateral
assignment by the Lender of this agreement and the Lender's interest in
the Pledged Collateral to the TEC Indenture Trustee. The Company also
agrees that, in the case of an Event of Default, the TEC Indenture
Trustee may exercise any rights and remedies of the Lender under this
agreement, and any reference to the "Lender" hereunder shall also
include the TEC Indenture Trustee.
(f) Headings. The descriptive headings of the several sections of
this agreement are inserted for convenience only an shall not control or
affect the meaning or construction of any of the provisions hereof.
(g) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity of enforceability or such provision in any other
jurisdiction.
(h) Survival. All representations and warranties contained herein
or made in writing by the Company in connection herewith, shall survive
the execution and delivery of this Agreement and any documents executed
in connection herewith or therewith.
(i) Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed and delivered shall be deemed o be an original,
but all of which when taken together shall constitute one and the same
instrument. A complete set of counterparts shall be lodged with the
Lender.
(j) Waiver. To the extent permitted by applicable law the Company
hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to this Agreement and any requirement that the
Lender protect, secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any action against
the Company or any other person or entity; provided however, that the
Lender shall in any event take such care in the handling of any Pledged
Collateral in its possession as it takes with respect to is own property
of a similar nature in its possession.
14
16
(k) Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given
if made by hand delivery, by telex, by facsimile or registered or
certified mail, postage prepaid, return receipt requested, addressed to
the party to be notified as follows:
in the case of the Company, to:
TCR Holding Corporation
0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx Xxxxxxx
Telecopy No.: (000) 000-0000
in the case of the Lender, to:
TransAmerican Energy Corporation
0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx Xxxxxxx
Telecopy No.: (000) 000-0000
Any party hereto may by notice to the other party designate such
additional or different addresses as shall be furnished in writing to
such party. Any notice or communication to any party shall be deemed to
have been given or made as of the date so delivered, if personally
delivered; when answered back, if telexed; when receipt is acknowledged,
if faxed; and five (5) calendar days after mailing, if sent by
registered or certified mail (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
(l) Conflicts. If any provision of the TARC Working Capital Note
limits, qualifies, or conflicts with any similar provision of this
Agreement, such provision of the TARC Working Capital Note shall
control.
(m) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND NYCPLR 327(B). THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
15
17
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
COMPANY IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
COMPANY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
16
18
IN WITNESS WHEREOF, the Company and the Lender have executed this
Agreement as of the date first above written.
TCR HOLDING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
TRANSAMERICAN ENERGY CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
By: ____________________________________
Name: __________________________________
Title: _________________________________
17
19
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, Vice President of TCR Holding Corporation, a Delaware
corporation (the "Company"), hereby certify with reference to the Security and
Pledge Agreement dated as of December ___, 1998 between the Company and
TransAmerican Energy Corporation, as Lender (terms defined therein being used
herein as therein defined), to the Lender as follows:
Section 1. Names.
(a) The exact corporate name of the Company, as it appears in
its certificate of incorporation is as follows:
TCR Holding Corporation
(b) Set forth below is each other corporate name the Company
has had since its organization, together with the date of
the relevant change:
n/a
(c) The Company has not changed its identity or corporate
structure in any way within the past five years except:
n/a
(d) The following is a list of other names (including trade
names or similar appellations) used by the Company or any
of its divisions or other business units at any time
during the past five years.
n/a
Section 2. Current Locations.
(a) The chief executive office of the Company is located at
the following address:
Mailing Address County State
--------------- ------ -----
0000 X. Xxx Xxxxxxx Xxxxxxx Xxxx Xxxxxx Xxxxx
Houston, 77032
-1-
20
(b) The following are all of the places of business of the
Company not identified above:
Mailing Address County State
--------------- ------ -----
None.
Section 3. Prior Locations. Set forth below is the information
required by subparagraphs (a) and (b) of Section 2 with
respect to each location or place of business maintained
by the Company at any time during the past five years:
n/a
Section 4. UCC Filings. A duly signed financing statement on Form
UCC-1 in substantially the form of Schedule 4 hereto has
been duly field in the UCC filing office in each
jurisdiction identified in Section 2 hereof. The Company
will deliver a true copy of each such filing duly
acknowledged by he filing officer as soon as practicable
after the date hereof.
Section 5. Schedule of Filings. Attached hereto as Schedule 5 is a
schedule setting forth filing information with respect to
the filings described in Section 4 above.
Section 6. Filing Fees. All filing fees and taxes payable in
connection with the filings described in Section 4 above
have been paid.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
____ day of December, 1998, in the respective capacities, indicated below their
signatures.
________________________________________
Name: __________________________________
Title: _________________________________
-2-
21
SCHEDULE 2(a)
PLEDGED COLLATERAL
====================================================================================================
Percentage of
Stock Certificate Outstanding
No.(s) Number of Shares of Class
Issuer Class of Stock Par Value Shares
====================================================================================================
TransContinental
Refining
Corporation Common Stock $__ per share 100%
====================================================================================================
-1-
22
SCHEDULE 4
DESCRIPTION OF PLEDGED COLLATERAL
All of the Debtor's right, title and interest in, to and under any and all of
the following described property, assets and rights, in each case, wherever
located, whether now owned or hereafter acquired or arising, all accessions and
additions thereto, all substitutions and replacements therefor, and all proceeds
and products thereof and assigns all rights in and to all collateral securing
the following described property, assets and rights:
(i) all of the issued and outstanding shares of the common
stock, par value $___ per share, of TransContinental Refining
Corporation, a Delaware corporation, identified on Schedule 2(a);
and
(ii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
-1-
23
SCHEDULE 5
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date(1)
------ -------------- ----------- -------
TCR Holding N/A ___________________________ 11/ /98
Corporation (St. Xxxxxxx Xxxxxx, L.A.)
TCR Holding N/A ___________________________ 11/ /98
Corporation (Texas, Secretary of State)
-------------
(1) Indicate lapse date, if other than fifth anniversary.
-1-
