1
EXHIBIT 4.1
--------------------------------------------------------------------------------
TRANSAMERICAN ENERGY CORPORATION,
as Issuer,
and
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
------------------------
SECOND SUPPLEMENTAL INDENTURE
Effective as of November 13, 1998
--------------------------
$475,000,000 11 1/2% Senior Secured Notes due 2002
and
$1,130,000,000 13% Senior Secured Discount Notes due 2002
--------------------------------------------------------------------------------
2
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, effective as of November 13, 1998
(the "Supplemental Indenture"), is made and entered into by and among
TRANSAMERICAN ENERGY CORPORATION, a Delaware corporation (the "Company"), and
FIRSTAR BANK OF MINNESOTA, N.A. (the "Trustee"), under an Indenture dated as of
June 13, 1997, by and between the Company and the Trustee, as amended and
supplemented by a First Supplemental Indenture dated as of December 30, 1997
(the "Original Indenture"). All capitalized terms used in this Supplemental
Indenture that are defined in the Original Indenture, either directly or by
reference therein, have the respective meanings assigned to them therein, except
to the extent such terms are otherwise defined in this Supplemental Indenture or
the context clearly requires otherwise.
WHEREAS, Section 9.2 of the Original Indenture provides, among other
things, that, with the consent of the Holders of not less than a majority in
aggregate Value of then outstanding Notes or, with respect to certain matters,
not less than 66-2/3% in aggregate Value of the Notes at the time outstanding,
the Company, when authorized by Board Resolutions, and the Trustee may amend or
supplement the Original Indenture or the Security Documents or enter into an
indenture supplemental thereto for the purposes of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Original
Indenture or the Security Documents or of modifying in any manner the rights of
the Holders under the Original Indenture or the Notes; and
WHEREAS, the Company has solicited consents from the Holders of the
Notes (the "Consent Solicitation") to amendments (the "Proposed Amendments") and
waivers (the "Proposed Waivers") to (i) the Original Indenture, and (ii) the
Loan Agreement dated June 13, 1997, as amended, between the Company and TARC;
and
WHEREAS, the Holders of at least 66-2/3% in aggregate Value of Notes at
the time outstanding have consented to the Proposed Amendments and Proposed
Waivers pursuant to the Consent Solicitation; and
WHEREAS, the Board of Directors of the Company has adopted resolutions
authorizing and approving the Proposed Amendments and the Company and the
Trustee are executing and delivering this Supplemental Indenture in order to
provide for such amendments;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Supplemental
Indenture hereby agree as follows:
-2-
3
ARTICLE I
AMENDMENTS TO ORIGINAL INDENTURE
Section 1.01. Amended Definitions. The following definitions in Section
1.1 of the Original Indenture are hereby amended as follows:
(a) A definition of "Bridge Financing Transaction" is hereby added
to read in its entirety as follows:
"Bridge Financing Transaction" means a series of
related transactions (as more fully described in the Company's
Consent Solicitation Statement dated November 4, 1998 pursuant
to which consents were solicited from the Holders to amendments
to the Indenture to facilitate the Bridge Financing
Transaction, which description is incorporated herein by
reference) pursuant to which, among other things (i) the
Company issues the Bridge Loan Notes, (ii) the Company loans
the proceeds of the issuance of the Bridge Loan Notes to TARC,
(iii) the liens on deposit accounts of the Company and the TARC
Intercompany Bridge Loan securing the Notes are released and
(iv) the liens on the remainder of the TEC Collateral securing
the Notes are subordinated to the liens thereon securing the
Bridge Loan Notes.
(b) A definition of "Bridge Loan Notes" is hereby added to read in
its entirety as follows:
"Bridge Loan Notes" means promissory notes issued by
the Company pursuant to the Bridge Financing Transaction (which
may be issued with original issue discount) resulting in
proceeds to the Company not in excess of $25,000,000.
(c) The definition of "Excess Cash" is hereby amended to read in
its entirety as follows:
"Excess Cash" means the Net Cash Proceeds received by
the Company from Asset Sales by the Company and the aggregate
amount of cash and Cash Equivalents received by the Company
from its Subsidiaries, including from dividends or payments in
respect of Intercompany Loan Redemptions less the sum (without
duplication) of (a) the provision for income and other taxes of
the Company or, in the case of subclause (iii) of this clause
(a), TransAmerican, (i) for the current fiscal year, (ii) for
the immediately preceding fiscal year or (iii) relating to the
sale by TransTexas of the Capital Stock of TransTexas
Transmission Corporation, (b) without duplication, amounts
received pursuant to the Services Agreement, (c) amounts used
to pay consent fees in connection with a solicitation of
waivers or amendments to the Notes, (d) dividends received from
an Accounts Receivable Subsidiary; provided, that such funds
are then contributed to TARC, (e) payments of interest and
principal on loans by the Company to TARC or TransTexas which
loans are permitted by the terms of the Indenture, (f)
scheduled payments of interest and principal pursuant to the
terms of the Intercompany Loans and (g) amounts used to pay
interest, principal and premium on the Bridge Loan Notes.
-3-
4
(d) The definition of "First Lien Debt" is hereby amended to read
in its entirety as follows:
"First Lien Debt" means any Debt or other obligation
secured by a Permitted TransTexas Lien described in clause (c),
(d), (e), (f), (i), (k), (l), (o), (q), (r) to the extent that
the Incurrence of the Permitted Lien to which such clause
relates is one of the other clauses listed here, (s) or (t) of
the definition of "Permitted TransTexas Liens," a Permitted
TARC Lien described in clause (c), (d), (g), (j), (k), (m),
(o), (p), (q), (r) to the extent that the Incurrence of the
Permitted Lien to which such clause relates is one of the other
clauses listed here, (s), (t), (y) and (z) of the definition of
"Permitted TARC Liens," or a Permitted TEC Lien described under
clause (g) or (h) of Permitted TEC Liens including, in each
case, any refinancings thereof.
(e) The definition of "Intercreditor Agreements" is hereby amended
to read in its entirety as follows:
"Intercreditor Agreements" means the TARC Intercreditor
Agreement, the TransTexas Intercreditor Agreement and the
intercreditor agreements permitted by Section 12.2(d).
(f) The definition of "Permitted Investment" is hereby amended to
read in its entirety as follows:
"Permitted Investment" means, when used with reference
to the Company or its Subsidiaries, (i) trade credit extended
to persons in the ordinary course of business; (ii) purchases
of Cash Equivalents; (iii) Investments by TransTexas or its
wholly owned Subsidiaries in wholly owned Subsidiaries of
TransTexas (other than TTXD) that are engaged in Related
TransTexas Businesses and Investments by TARC or its wholly
owned Subsidiaries in wholly owned Subsidiaries of TARC that
are engaged in Related TARC Businesses; (iv) Swap Obligations;
(v) the receipt of capital stock in lieu of cash in connection
with the settlement of litigation; (vi) advances to officers
and employees in connection with the performance of their
duties in the ordinary course of business in an amount not to
exceed $3,000,000 in the aggregate outstanding at any time in
the case of each of (i) the TARC Entities and (ii) the
TransTexas Entities; (vii) margin deposits in connection with
Permitted Hedging Transactions; (viii) an Investment in one or
more Unrestricted Subsidiaries of (a) TransTexas in an
aggregate amount, net of return on such Investment, not in
excess of $25,000,000 less the amount of any Unrestricted
Non-Recourse Debt outstanding of TransTexas or any of its
Subsidiaries and (b) TARC of the assets comprising the
CATOFIN(R) Unit owned by TARC as of the date hereof; (ix)
Investments and expenditures made in the ordinary course of
business by TransTexas or its Subsidiaries, and of a nature
that is or shall have become customary in, the oil and gas
business as a means of actively exploiting, exploring for,
acquiring, developing, processing, gathering, marketing or
transporting oil or gas through agreements, transactions,
interests or arrangements which permit a person to share risks
or costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved
through the conduct of the oil and gas business jointly with
third parties, including, without limitation, (a) ownership
interests in oil and gas properties or gathering systems and
(b) Investments and expenditures in the form of or pursuant to
operating agreements,
-4-
5
processing agreements, farm-in agreements, farm-out agreements,
development agreements, area of mutual interest agreements,
unitization agreements, pooling arrangements, joint bidding
agreements, service contracts, joint venture agreements,
partnership agreements (whether general or limited),
subscription agreements, stock purchase agreements and other
similar agreements with third parties (including Unrestricted
Subsidiaries); provided, that in the case of any joint venture
engaged in processing, gathering, marketing or transporting oil
or gas (i) all Debt of such joint venture (other than a joint
venture that is an Unrestricted Subsidiary) that would not
otherwise constitute Debt of one of the TransTexas Entities
shall be deemed Debt of TransTexas in proportion to its direct
or indirect ownership interest in such joint venture and (ii)
such joint venture shall be reasonably calculated to enhance
the value of the reserves of the TransTexas Entities or
marketability of production from such reserves; (x) a guaranty
by any Subsidiary of the Company permitted under Section 4.11;
(xi) deposits permitted by the definition of Permitted Liens or
any extension, renewal, or replacement of any of them, (xii)
the TTXD Equity Investment (in addition to any contribution by
TransTexas pursuant to clause (xiii) below), (xiii) capital
contributions by TransTexas to TTXD or to a joint venture, a
partnership, a limited liability company or a similar entity of
TransTexas' drilling and energy services business and pipeline
services business and related assets, (xiv) any acquisition by
TARC of tank storage facilities (or the company that owns such
facilities) in the vicinity of the TARC refinery, (xv)
guarantees by TransTexas of Debt of TTXD to the extent that
such Debt relates to assets contributed to TTXD pursuant to
clause (xiii) hereof, (xvi) Investments in Accounts Receivables
Notes by TARC in amounts not to exceed the greater of
$20,000,000 or 20% of the TARC Borrowing Base at any one time,
(xvii) loans from the Company to its Subsidiaries (other than
the TTXD Entities prior to the TTXD Spin-off) with (i) the
excess of the Excess Cash Offer Amount (after reserving the
full Interest Reserve Amount) over the Excess Cash Acceptance
Amount, provided, that such loans are on terms no less
favorable to the Company than were disclosed to the Holders of
the Notes in the Excess Cash Offer or (ii) the excess of the
Additional Interest Excess Cash Offer Amount over the
Additional Interest Excess Cash Acceptance Amount, provided,
that such loans are on terms no less favorable to the Company
than were disclosed to the Holders of the Notes in the
Additional Interest Excess Cash Offer, (xviii) an Investment in
Capital Stock resulting from an Asset Sale pursuant to clause
(xiii) of Section 4.14, (xix) Investments by the Company in an
Accounts Receivable Subsidiary, or by the Company or TARC in a
reincorporation subsidiary in each case in connection with the
initial capitalization thereof and not to exceed $1,000, (xx)
Investments by the Company or TARC or a wholly owned Subsidiary
of either of them solely for the purpose of facilitating a
repurchase of the TARC Warrants in connection with a merger,
(xxi) other Investments not in excess of $5,000,000 at any time
outstanding, (xxii) loans made (X) to officers, directors and
employees of the Company or any of its Subsidiaries approved by
the applicable Board of Directors (or by an authorized
officer), the proceeds of which are used solely to purchase
stock or to exercise stock options received pursuant to an
employee stock option plan or other incentive plan, in a
principal amount not to exceed the purchase price of such stock
or the exercise price of such stock options, as applicable and
(Y) to refinance loans, together with accrued interest thereon,
made pursuant to this clause, in each case not in excess of
$3,000,000 in the aggregate outstanding at any one time,
(xxiii) Investments by the Company in its Subsidiaries in an
aggregate amount not to exceed the proceeds of Subordinated
Debt permitted to be incurred pursuant to clause (5)(d) of
Section 4.11, (xxiv) Investments by the Company in TARC in an
-5-
6
amount not to exceed the amounts received by the Company from
an Accounts Receivable Subsidiary, (xxv) a capital contribution
by TTXD of any or all of its assets to a joint venture, a
partnership, a limited liability company or a similar entity,
(xxvi) a capital contribution by the Company to TARC in an
amount not to exceed $226,000,000 (inclusive of any equity
contribution made as described in the Offering Circular under
the heading "The Transactions -- TARC Equity Contribution"),
(xxvii) any deposit or escrow of funds in connection with
adjustments to the Lobo Sale purchase price, (xxviii) loans
made by the Company to TransTexas or TARC which in the
aggregate do not exceed $50,000,000 principal amount
outstanding at any one time or (xxix) loans from the Company to
TARC of an amount equal to the proceeds received by it from the
issuance of the Bridge Loan Notes.
(g) The definition of "Permitted TARC Liens" is hereby amended to
read in its entirety as follows:
"Permitted TARC Liens" means (a) Liens imposed by
governmental authorities for taxes, assessments, or other
charges not yet due or which are being contested in good faith
and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of any of the TARC
Entities in accordance with GAAP; (b) statutory Liens of
landlords, carriers, warehousemen, mechanics, materialmen,
repairmen, mineral interest owners, or other like Liens arising
by operation of law in the ordinary course of business provided
that (i) the underlying obligations are not overdue for a
period of more than 60 days, or (ii) such Liens are being
contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the
books of any of the TARC Entities in accordance with GAAP; (c)
deposits of cash or Cash Equivalents to secure (i) the
performance of bids, trade contracts (other than borrowed
money), leases, statutory obligations, surety bonds,
performance bonds, and other obligations of a like nature
incurred in the ordinary course of business (or to secure
reimbursement obligations or letters of credit issued to secure
such performance or other obligations) in an aggregate amount
outstanding at any one time not in excess of $5,000,000 or (ii)
appeal or supersedeas bonds (or to secure reimbursement
obligations or letters of credit in support of such bonds); (d)
easements, servitudes, rights-of-way, zoning, similar
restrictions and other similar encumbrances or title defects
incurred in the ordinary course of business which, in the
aggregate, are not material in amount and which do not, in any
case, materially detract from the value of the property subject
thereto (as such property is used by any of the TARC Entities)
or materially interfere with the ordinary conduct of the
business of any of the TARC Entities including, without
limitation, any easement or servitude granted in connection
with the Port Commission Bond Financing; (e) Liens arising by
operation of law in connection with judgments, only to the
extent, for an amount and for a period not resulting in an
Event of Default with respect thereto; (f) Liens securing Debt
or other obligations not in excess of $3,000,000; (g) pledges
or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance,
other types of social security legislation, property insurance
and liability insurance; (h) Liens on Equipment, Receivables
and Inventory; (i) Liens on the assets of any entity existing
at the time such assets are acquired by any of the TARC
Entities, whether by merger, consolidation, purchase of assets
or otherwise so long as such Liens (i) are not
-6-
7
created, incurred or assumed in contemplation of such assets
being acquired by any of the TARC Entities and (ii) do not
extend to any other assets of any of the TARC Entities; (j)
Liens (including extensions and renewals thereof) on real or
personal property, acquired after the Issue Date ("New TARC
Property"); provided, however, that (i) such Lien is created
solely for the purpose of securing Debt Incurred to finance the
cost (including the cost of improvement or construction) of the
item of New TARC Property subject thereto and such Lien is
created at the time of or within six months after the later of
the acquisition, the completion of construction, or the
commencement of full operation of such New TARC Property, (ii)
the principal amount of the Debt secured by such Lien does not
exceed 100% of such cost plus reasonable financing fees and
other associated reasonable out-of-pocket expenses (iii) any
such Lien shall not extend to or cover any property or assets
other than such item of New TARC Property and any improvements
on such New TARC Property and (iv) such Lien does not extend to
assets or property which are part of the fixed refinery assets
which are part of the Capital Improvement Program; (k) leases
or subleases granted to others that do not materially interfere
with the ordinary course of business of any of the TARC
Entities, taken as a whole; (l) Liens on the assets of one of
the TARC Entities in favor of another TARC Entity; (m) Liens
securing reimbursement obligations with respect to letters of
credit that encumber documents relating to such letters of
credit and the products and proceeds thereof; provided, that,
such reimbursement obligations are not matured for a period of
over 60 days; (n) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (o)
Liens encumbering customary initial deposits and margin
deposits securing Swap Obligations or Permitted Hedging
Transactions; (p) Liens on cash deposits to secure
reimbursement obligations with respect to letters of credit
after the Delayed Coking Unit is completed; (q) Liens that
secure Unrestricted Non-Recourse Debt; provided, however, that
at the time of incurrence the aggregate fair market value of
the assets securing such Lien (exclusive of the stock of the
applicable Unrestricted Subsidiary) shall not exceed the amount
of allowed Unrestricted Non-Recourse Debt of TARC; (r) Liens on
the proceeds of any property subject to a Permitted TARC Lien
or on deposit accounts containing any such proceeds; (s) Liens
on the proceeds of any property that is not Collateral, on the
proceeds of any Debt Incurred in accordance with the provisions
hereof, or on deposit accounts containing any such proceeds;
(t) Liens imposed in connection with the Port Commission Bond
Financing; provided, that such liens do not extend to property
other than the Port Facility Assets; (u) any extension, renewal
or replacement of the Liens created pursuant to any of clauses
(a) through (g), (i) through (t) or (w) provided that such
Liens would have otherwise been permitted under such clauses,
and provided further that the Liens permitted by this clause
(u) do not secure any additional Debt or encumber any
additional property; (v) Liens of the trustee under indenture
and related collateral documents governing the terms of the
Senior TARC Mortgage Notes and the Senior TARC Discount Notes;
(w) Liens in favor of the Company or its assignee under the
Security Documents; (y) Liens on tank storage facilities in the
vicinity of the TARC refinery acquired after the date hereof
and (z) Liens securing the TARC Intercompany Bridge Loan.
(h) The definition of "Permitted TEC Liens" is hereby amended to
read in its entirety as follows:
-7-
8
"Permitted TEC Liens" means (a) Liens imposed by
governmental authorities for taxes, assessments, or other
charges not yet due or which are being contested in good faith
and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of any of the
Company in accordance with GAAP; (b) Liens arising by operation
of law in connection with judgments, only to the extent, for an
amount and for a period not resulting in an Event of Default
with respect thereto; (c) any extension, renewal, or
replacement of Liens created pursuant to either of clauses (a)
or (b) of this definition, provided that such Liens would have
otherwise been permitted under such clauses, and further
provided that the Liens permitted by this clause (c) shall not
be spread to cover any additional Debt or property; (d) Liens
of the trustee under this Indenture and related collateral
documents governing the terms of the Senior TARC Mortgage Notes
and the Senior TARC Discount Notes; (e) deposits of cash or
Cash Equivalents to secure appeal or supersedeas bonds (or to
secure reimbursement obligations or letters of credit in
support of such bonds), (f) pledges or deposits made in the
ordinary course of business in connection with worker's
compensation, unemployment insurance, and other types of social
security legislation, property insurance and liability
insurance, (g) a Lien on the stock of an Accounts Receivable
Subsidiary securing a guaranty of the Debt of an Accounts
Receivable Subsidiary described in the definition of
Unrestricted Non-Recourse Debt or (h) Liens securing the Bridge
Loan Notes.
(i) A definition of "TARC Intercompany Bridge Loan" is hereby added
to read in its entirety as follows:
"TARC Intercompany Bridge Loan" means the promissory
note from TARC to the Company which is issued pursuant to the
Bridge Financing Transaction resulting in proceeds of up to
$25,000,000 to TARC.
(j) A definition of "TEC Collateral" is hereby added to read in its
entirety as follows:
"TEC Collateral" means the assets of the Company which
are pledged to the Trustee as security for the Notes.
Section 1.02. Section 4.10 of the Original Indenture.
(a) Section 4.10(a) of the Original Indenture is hereby amended to
read in its entirety as follows:
(a) The Company shall not, and shall not permit any of
its Subsidiaries (other than any of the TTXD Entities after the
date of the TTXD Spin-off) to, enter directly or indirectly
into, or permit to exist, any transaction or series of related
transactions with any Related Person (excluding any Related
Person which is a Related Person solely because the party
engaging in such transaction has the ability to control the
Related Person under the definition of "Control" contained
within the definition of "Related Person") (including, without
limitation: (i) the sale, lease, transfer or other disposition
of properties, assets or securities to such Related Person,
(ii) the purchase or lease of any property, assets or
securities from such Related Person, (iii) an Investment in
such Related Person (excluding
-8-
9
Investments permitted to be made pursuant to clauses (iii),
(vi), (viii), (x), (xii), (xiii), (xv), (xvi), (xvii), (xix),
(xx), (xxii), (xxiii), (xxiv) or (xxvi) of the definition of
"Permitted Investment"), and (iv) entering into or amending any
contract or agreement with or for the benefit of a Related
Person (each, a "Related Person Transaction")), except for (A)
permitted Restricted Payments, including for this purpose the
transactions excluded from the definition of Restricted
Payments by the proviso contained in the definition of
"Restricted Payments", (B) transactions made in good faith, the
terms of which are (x) fair and reasonable to the Company or
such Subsidiary, as the case may be, and (y) at least as
favorable as the terms which could be obtained by the Company
or such Subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with Persons who are
not Related Persons, (C) transactions (w) between the Company
and any of its Wholly Owned Subsidiaries or transactions
between Wholly Owned Subsidiaries of the Company, (x) among the
TTXD Entities, (y) among the TARC Entities, or (z) among the
TransTexas Entities, (D) transactions pursuant to the Services
Agreement, the Transfer Agreement, the Tax Allocation
Agreement, the Gas Purchase Agreement, the Drilling Agreement,
the Intercompany Notes, the Security Documents, and the
Registration Rights Agreements (E) the lease of office space to
the Company or an Affiliate of the Company by TransAmerican or
an Affiliate of TransAmerican, provided that payments
thereunder do not exceed in the aggregate $2,000,000 per year,
(F) any sale and leaseback or other transfer of TransTexas'
headquarters building located at 0000 Xxxxx Xxx Xxxxxxx Xxxxxxx
Xxxx, Xxxxxxx, Xxxxx, (G) any employee compensation arrangement
in an amount which together with the amount of all other cash
compensation paid to such employee by the Company and its
Subsidiaries does not provide for cash compensation in excess
of $2,000,000 in any fiscal year of the Company or any
Subsidiary and which has been approved by a majority of the
Company's Independent Directors and found in good faith by such
directors to be in the best interests of the Company or such
Subsidiary, as the case may be, (H) loans to TARC and
TransTexas which are permitted to be Incurred pursuant to the
terms of Section 4.11; (I) the amounts payable by the Company
and its Subsidiaries to Southeast Contractors for employee
services provided to TARC not exceeding the actual costs to
Southeast Contractors of the employees, which costs consist
solely of payroll and employee benefits, plus related
administrative costs and an administrative fee, not exceeding
$2,000,000 per year in the aggregate; (J) the Company and its
Subsidiaries may pay a management fee to TransAmerican in an
amount not to exceed $2,500,000 per year and (K) transactions
effected pursuant to the Bridge Financing Transaction,
including without limitation (w) the borrowing by TARC from the
Company of up to $25 million on substantially the same terms as
the Bridge Loan Notes, (x) the repayment thereof, (y) the
pledge of the TARC Collateral as security therefor and (z) the
execution, delivery and performance of an agreement pursuant to
which the Company would direct TransTexas to make payments on
the TransTexas Intercompany Loan, during the period that the
Bridge Loan Notes remain outstanding, to an account which will
be dedicated to payments on the Bridge Loan Notes.
Notwithstanding the foregoing, the Company shall not,
and shall not permit any of its Subsidiaries to, directly or
indirectly (excluding clauses (I) and (J) of Section 4.10(a)),
loan or advance any funds to Xxxx X. Xxxxxxx, and the aggregate
amount of total compensation to Xxxx X. Xxxxxxx shall not
exceed (i) $1,000,000 per year in the aggregate from the
Company and TransTexas and (ii) following the Phase II
Completion Date, $1,000,000 from TARC.
-9-
10
(b) Section 4.10(b) of the Original Indenture is hereby amended to
read in its entirety as follows:
(b) Without limiting the foregoing, except for sales of
accounts receivable to an Accounts Receivable Subsidiary in
accordance with Section 4.20, (i) with respect to any Related
Person Transaction or series of Related Person Transactions
(other than any Related Person Transaction described in clause
(A) (with respect to Permitted Restricted Payments by virtue of
clauses (i), (ii), (iv)-(xii), (xiv), (xv), (xvi) and (xvii) of
the proviso contained in the definition of "Restricted
Payments"), (C), (D), (E), (F), (H) or (K) of Section 4.10(a))
with an aggregate value in excess of $1,000,000, such
transaction must first be approved by a majority of the Board
of Directors of the Company or its Subsidiary which is the
transacting party and a majority of the directors of such
entity who are disinterested in the transaction pursuant to a
Board Resolution, as (x) fair and reasonable to the Company or
such Subsidiary, as the case may be, and (y) on terms which are
at least as favorable as the terms which could be obtained by
the Company or such Subsidiary, as the case may be, on an arm's
length basis with Persons who are not Related Persons, and (ii)
with respect to any Related Person Transaction or series of
related Person Transactions (other than any Related Person
Transaction described in clause (A) (with respect to permitted
Restricted Payments by virtue of clauses (i), (ii), (iv)-(xii),
(xiv), (xv), (xvi) and (xvii) of the proviso contained in the
definition of "Restricted Payments") (C), (D), (E), (F), (G),
(H) or (K) of Section 4.10(a)) with an aggregate value in
excess of $5,000,000, the Company must first obtain a favorable
written opinion as to the fairness of such transaction to the
Company or such Subsidiary, as the case may be, from a
financial point of view, from a "big 6 accounting firm" or a
nationally recognized investment banking firm; provided that
such opinion shall not be necessary if approval of the Board of
Directors to such Related Person Transaction has been obtained
after receipt of bona fide bids of at least two other
independent parties and such Related Person Transaction is in
the ordinary course of business.
Section 1.03. Section 4.11 of the Original Indenture.
(a) Section 4.11(2) is hereby amended to add subsection (s) thereto
to read in its entirety as follows:
(s) Debt of TARC to the Company evidenced by the TARC
Intercompany Bridge Loan.
(b) Section 4.11(5) is hereby amended to add subsection (f) thereto
to read in its entirety as follows:
(f) Debt evidenced by the Bridge Loan Notes.
Section 1.04. Section 4.14 of the Original Indenture. Section 4.14(b)
is hereby amended to read in it entirety as follows:
(b) Notwithstanding the foregoing limitations on Asset
Sales and restrictions on the use of Net Cash Proceeds
therefrom:
-10-
11
(i) TransTexas or any Subsidiary of TransTexas may
convey, sell, lease, transfer, or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to
TransTexas or a wholly owned Subsidiary of TransTexas;
(ii) TARC or any Subsidiary of TARC may convey, sell,
lease, transfer, or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to TARC or any
wholly owned Subsidiary of TARC;
(iii) the Company and its Subsidiaries may engage in
Asset Sales in the ordinary course of business;
(iv) the Company and its Subsidiaries may engage in
Asset Sales not otherwise permitted in clauses (i) through
(iii) or (v) through (xiii) of this sentence provided that the
aggregate proceeds from all such Asset Sales do not exceed
$5,000,000 in any twelve-month period;
(v) the Company and its Subsidiaries may engage in
Asset Sales pursuant to and in accordance with the provisions
of Article V;
(vi) the Company and its Subsidiaries may sell,
assign, lease, license, transfer, abandon or otherwise dispose
of (a) damaged, worn out, unserviceable or other obsolete
property in the ordinary course of business or (b) other
property no longer necessary for the proper conduct of their
business;
(vii) TARC and its Subsidiaries may sell accounts
receivable to an Accounts Receivable Subsidiary in accordance
with the provisions described under Section 4.20;
(viii) TARC and its Subsidiaries may convey, sell,
transfer or otherwise dispose of crude oil and refined products
in the ordinary course of business;
(ix) the Company and its Subsidiaries may engage in
Asset Sales (a) the Net Cash Proceeds of which are used for
payment of cash interest on the Notes or the Intercompany
Loans, (b) in connection with the settlement of litigation or
the payment of judgments or (c) the Net Cash Proceeds of which
are used in connection with the settlement of litigation or for
the payment of judgments; provided, that the aggregate value of
assets transferred pursuant to clauses (b) and (c) above from
and after the Issue Date does not exceed $25,000,000;
(x) TransTexas may sell, convey, contribute or
otherwise transfer the assets comprising the Related TTXD
Business to TTXD;
(xi) TARC may transfer the Port Facility Assets in
connection with the Port Commission Bond Financing;
-11-
12
(xii) TransTexas and its Subsidiaries may convey,
sell, transfer or otherwise dispose of Hydrocarbons or other
mineral products in the ordinary course of business;
(xiii) Prior to the TTXD Spin-off, TransTexas may sell,
transfer, contribute or otherwise dispose of the capital stock
of TTXD or the assets comprising the drilling and energy
services business and pipeline services business of TransTexas
provided that (a) in the case of a transfer, contribution or
other distribution to a company which has a class of equity
securities publicly traded on a national securities exchange or
on the NNM, (x) at least 50% of the value of the consideration
for such Asset Sale consists of cash and up to 50% of the value
of the consideration for such Asset Sale may consist of Capital
Stock and (y) the Net Cash Proceeds from such Asset Sale are
applied pursuant to clause (a)(ii) of the prior paragraph or
(b) in the case of a transfer, contribution or other
distribution to a joint venture, partnership, limited liability
company or similar entity newly formed for the purpose of this
transfer, up to 100% of the value of the consideration for such
Asset Sale may consist of Capital Stock or other equity
interests in such entity; provided, that any Net Cash Proceeds
from such Asset Sale are applied pursuant to clause (a)(ii) of
the prior paragraph;
(xiv) The Company and TARC may sell shares of
TransTexas Common Stock in connection with a transaction
contemplated by the TransTexas Disbursement Agreement and
clause (xii) of the definition of "Restricted Payments;"
(xv) The Company may transfer all or any portion of
its voting rights with respect to Capital Stock of TransTexas
pursuant to the Bridge Financing Transaction; and
(xvi) Unless otherwise required by the foregoing
clauses (i) through (xv), the proceeds of any Asset Sale
permitted thereby shall be used by the Company or its
Subsidiaries for purposes not otherwise prohibited by this
Indenture.
Section 1.05. Section 12.2 of the Original Indenture. Section 12.2 is
hereby amended to add subsection (d) thereto to read in its entirety as follows:
(d) The Trustee, upon the Company's request and at the
Company's expense, will execute, deliver, file and record all
instruments and do all acts and other things as may be
reasonably necessary to provide, pursuant to one or more
subordination, intercreditor and collateral agency agreements
(the "Subordination Agreements") among the Trustee, the initial
holders of the Bridge Loan Notes, the Company and a collateral
agent, as collateral agent, among other things, (i) that the
Liens on the TEC Collateral securing the Notes will be
subordinated to the Liens on the TEC Collateral securing the
Bridge Loan Notes, (ii) that the Liens on the TARC Collateral
securing the TARC Intercompany Loan will be subordinated to the
Liens on the TARC Collateral securing the TARC Intercompany
Bridge Loan, (iii) that determinations regarding the exercise
of remedies against the TEC Collateral securing both the Bridge
Loan Notes and the Notes will be made by a majority
-12-
13
of the outstanding principal amount of the Bridge Loan Notes,
(iv) that determination regarding the exercise of remedies
against the TARC Collateral securing both the TARC Intercompany
Bridge Loan and the TARC Intercompany Loan will be made by a
majority of the outstanding principal amount of the Bridge Loan
Notes, (v) that the collateral agent will act as collateral
agent with respect to the TEC Collateral and the TARC
Collateral for both the holders of the Bridge Loan Notes and
the holders of the Notes and (vi) that all of the Trustee's
voting rights with respect to the Capital Stock of TransTexas
included within the TEC Collateral shall be transferred to the
holders of the Bridge Loan Notes (pro rata based on the
principal amount thereof) until the Bridge Loan Notes have been
paid in full. The Subordination Agreement will provide that
nothing contained therein will impair or affect the right of
the holders of the Notes to institute suit for the enforcement
of any payment thereon as and when due. The subordination of
the Security Interests pursuant to the Subordination Agreement
shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 1.06. Section 12.5 of the Original Indenture. Section 12.5(a)
is hereby amended to read in its entirety as follows:
(a) Upon receipt of a Release Request, the Trustee
shall execute and deliver, within five Business Days from the
receipt of such Release Request, any instruments deemed by the
Company (or with respect to the Security Documents, the grantor
of the security interests thereunder) to be reasonably
necessary or reasonably appropriate to release all or a part of
the Collateral from the Security Interests, if the provisions
of this Section 12.5 have been complied with. Any such Release
Request shall request the Trustee to execute one or more
specifically described release instruments (which release
instruments shall accompany such Release Request) and shall
certify (i) that no Event of Default has occurred and is
continuing (or with respect to a Release Request relating to
any of the Security Documents, that no event of default has
occurred and is continuing under the applicable Security
Document) and (ii) that one of the conditions of this Section
12.5(a) set forth below (specifying such condition), and if
such specified condition is described in clause (i), (ii) or
(iii) below, that the conditions of Section 12.4, 12.6 or 12.7,
if applicable, have been, or simultaneously with or immediately
following the release will be, fulfilled:
(i) the Collateral will be disposed of in compliance
with Section 12.4;
(ii) there is a substitution of Substitute Collateral
in accordance with Section 12.6;
(iii) there is a deposit of cash in a cash collateral
account in accordance with Section 12.7;
(iv) the Collateral to be released will be used within
five business days either to make redemptions or purchases of
Notes which will be delivered to the Trustee for cancellation;
(v) the Collateral is to be released in connection
with an Asset Sale made in compliance with Section 4.14;
-13-
14
(vi) all of the conditions precedent to the
termination of the Security Document under which the Lien in
the Collateral to be released was created, or to the release of
such Collateral from the Lien created by such Security
Document, as set forth in such Security Document, have been
satisfied;
(vii) Holders of not less than 66 2/3% in Value of
the then outstanding Notes have consented in writing to such
release of Collateral from the Security Interests;
(viii) the Collateral is to be released in connection
with the TTXD Spin-off;
(ix) the Collateral is to be released in connection
with the repurchase by TransTexas of its common stock made
pursuant to the terms of clause (xii) of the definition of
"Restricted Payments" contained herein; or
(x) the Collateral to be released relates to the
lien of the TARC Mortgage on a portion of Parcel B-1 of TARC's
refinery (which parcel is more particularly described in
Exhibit "A" to the TARC Mortgage) for dedication to a
governmental authority (such parcel being referred to as the
"Dedicated Parcel") for the purpose of relocating Prospect
Avenue from the western boundary line of such Parcel B-1 to the
eastern and northern boundary lines of such Parcel B-1,
provided that (i) the fee interest in and to the real property
currently dedicated for use as Prospect Avenue is conveyed to
TARC (such parcel being referred to as the "Reconveyed
Parcel"), (ii) TARC executes and delivers a supplemental
mortgage evidencing that the lien of the TARC Mortgage
encumbers the Reconveyed Parcel, (iii) the Company executes and
delivers a supplemental collateral assignment with respect to
such supplemental mortgage and (iv) the Company delivers to the
Trustee a certificate of the Construction Supervisor certifying
that the loss of the use of the Dedicated Parcel does not have
a material adverse affect on the use, operation or maintenance
of TARC's refinery or the Capital Improvement Program.
(xi) the Collateral to be released constitutes First
Lien Debt and the Company (or with respect to releases under
the Security Documents, the grantor of the security interest
thereunder) has satisfied all the requirements for obtaining
subordination of the Security Interests therein pursuant to
Section 12.2 and such Collateral is (or will be, upon obtaining
such release) encumbered by a Lien permitted pursuant to the
terms of clauses (d), (k), (s) or (t) of the definition of
Permitted TARC Lien or clauses (f), (l) or (o) of the
definition of Permitted TransTexas Lien.
(xii) the Collateral to be released consists of
deposit accounts of the Company, the TARC Intercompany Bridge
Loan and the rights of the Company under the Loan Agreement
relating to the TARC Intercompany Bridge Loan and the Release
Request delivered to the Trustee with respect to such release
states that concurrently with or immediately following the
effectiveness of such release the Company will issue Bridge
Loan Notes.
-14-
15
ARTICLE II
GENERAL PROVISIONS
Section 2.01. Effectiveness of Amendments. This Supplemental Indenture
is effective as of the date first above written.
Section 2.02. Ratification of Indenture. The Original Indenture is in
all respects acknowledged, ratified and confirmed, and shall continue in full
force and effect in accordance with the terms thereof and as supplemented by
this Supplemental Indenture. The Original Indenture and this Supplemental
Indenture, shall be read, taken and construed as one and the same instrument.
Section 2.03. Certificate and Opinion as to Conditions Precedent.
Simultaneously with and as a condition to the execution of this Supplemental
Indenture, the Company is delivering to the Trustee:
(a) an Officers' Certificate in the form attached hereto as
Exhibit A; and
(b) an Opinion of Counsel covering the matters described in
Exhibit B attached hereto.
Section 2.04. Effect of Headings. The Article and Section headings in
this Supplemental Indenture are for convenience only and shall not affect the
construction of this Supplemental Indenture.
Section 2.05. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 2.06. Counterparts. This Supplemental Indenture may be executed
in any number if counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute the same
instrument.
-15-
16
IN WITNESS WHEREOF, the parties to this Supplemental Indenture have
caused the Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attached, on and effective as of day
and year first above written.
TRANSAMERICAN ENERGY CORPORATION
Attest: By:
---------------------------- ---------------------------------------
Xxx Xxxxx, Xx Xxxxxxx,
Assistant Secretary Vice President, Chief Financial Officer
and Secretary
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
---------------------------------------
Xxxxx X. Xxxxxx, III,
Vice President
-16-
