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EXHIBIT 4.14
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
Intercreditor and Collateral Agency Agreement, dated as of June 13,
1997, by and among First Union National Bank, in its capacity as Collateral
Agent (as hereinafter defined) and, separately, in it capacity as TARC Note
Trustee (as hereinafter defined), Firstar Bank of Minnesota, N.A., as TEC Note
Trustee (as hereinafter defined), TransAmerican Energy Corporation, a Delaware
corporation ("TEC"), as payee of the New Note (as hereinafter defined), and
TransAmerican Refining Corporation, a Texas corporation (the "Issuer").
WITNESSETH:
WHEREAS, the Issuer, TEC and First Fidelity Bank, National
Association, as Trustee, have entered into an Indenture, dated as of February
15, 1995, as heretofore amended (as heretofore amended and as the same may
hereafter be amended, modified or supplemented from time to time in accordance
with its terms, the "TARC Note Indenture"), pursuant to which the Issuer has
issued its $340,000,000 Guaranteed First Mortgage Discount Notes due 2002 and
its $100,000,000 Guaranteed First Mortgage Notes due 2002 (collectively, the
"TARC Notes") in the aggregate original principal amount of $440,000,000;
WHEREAS, First Union National Bank, is the successor to First
Fidelity Bank, National Association, and, by reason thereof, is successor TARC
Note Trustee;
WHEREAS, the Issuer and TEC have entered into certain security
agreements and instruments set forth on Schedule I hereto (as such documents
may be amended, modified or supplemented from time to time, collectively, the
"TARC Note Security Documents"), granting a security interest in certain assets
(the "TARC Note Collateral") in favor of the TARC Note Trustee for the benefit
of the TARC Note Holders (as hereinafter defined);
WHEREAS, TEC and the TEC Note Trustee have entered into the TEC
Note Indenture pursuant to which TEC has issued the TEC Notes;
WHEREAS, concurrently herewith, the Issuer and TEC are entering
into a Loan Agreement, dated as of the date hereof (as the same may be amended,
modified or supplemented from time to time, the "New Note Loan Agreement"),
pursuant to which the Issuer is issuing its promissory note, accreting original
issue discount for two years from date of issuance and thereafter bearing
interest, in each case at the rate of 16% per annum, payable to the order of
TEC in the principal amount of $920,000,000, and maturing on June 1, 2002 (the
"New Note");
WHEREAS, the Issuer has entered into certain security agreements
and instruments set forth on Schedule II hereto (as such documents may be
amended, modified or supplemented from time to time, collectively, the "New
Note Security Documents"), granting a security interest in certain assets (the
"New Note Collateral") in favor of and for the benefit of the New Note Holder;
and
WHEREAS, certain of the New Note Collateral and certain of the
TEC Note Collateral (as defined below) is included in the TARC Note Collateral
and the Secured Creditors (as hereinafter defined) desire to set forth their
understanding with respect to the Collateral Agent's duties regarding the
Shared Collateral (as defined below) and certain agreements among the Secured
Creditors regarding their interest in the Shared Collateral;
WHEREAS, concurrently herewith, TEC and the TEC Note Trustee are
entering into a Security and Pledge Agreement, dated as of the date hereof (as
the same may be amended, modified or supplemented from time to time, the "TEC
Pledge Agreement"), granting a security interest in, among other things, the
common stock of the Issuer (the "TEC Note Collateral") in favor of the TEC Note
Trustee for the benefit of the TEC Note Holders
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and pursuant to which the New Note, together with all of TEC's rights and
interests under the New Note Security Documents, will be assigned and
transferred to, and subjected to a security interest in favor of, the TEC Note
Trustee pursuant to the TEC Note Indenture as security for the TEC Notes for
the benefit of the TEC Note Holders;
NOW THEREFORE, in consideration for the premises, covenants and
agreements contained herein, the parties hereto agree as follows:
Section 1. Definitions. As used herein, the following terms shall
have the meanings herein specified and all terms used herein and not otherwise
defined herein shall have the meanings provided therefor in the TARC Note
Indenture. Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
"Acceleration Notice" shall have the meaning specified in Section
5(a) hereof.
"Acceptable Bank" shall mean a bank or trust company in good
standing and incorporated under the laws of the United States or any
State thereof or the District of Columbia, with its principal corporate
trust office within the United States, with capital, surplus and
undistributed profits of not less than $50,000,000.
"Agreement" shall mean this Intercreditor and Collateral Agency
Agreement, as the same may be amended, modified or supplemented from
time to time.
"Collateral Agent" shall mean First Union National Bank, in its
capacity as Collateral Agent under this Agreement or, upon the
resignation or removal of First Union National Bank as Collateral Agent,
any successor Collateral Agent appointed pursuant to the provisions of
Section 9 of this Agreement.
"Collateral Documents" shall mean, collectively, the TEC Pledge
Agreement, the TARC Note Security Documents and the New Note Security
Documents.
"Companies" shall mean TEC, the Issuer and any Guarantor under
either of the Primary Documents and/or the TEC Note Indenture.
"Default" shall, with respect to each Primary Document, have the
meaning provided in such Primary Document.
"Event of Default" shall, with respect to each Primary Document,
have the meaning provided in such Primary Document.
"Holders" shall mean, collectively, the New Note Holder, the TEC
Note Holders and the TARC Note Holders.
"Issuer" shall have the meaning provided in the first paragraph
hereof.
"Junior Obligations" shall mean all indebtedness and other
monetary obligations, including, without limitation, all principal,
interest, fees, premium, if any, costs and expenses payable, of the
Companies to the Junior Secured Creditor under the New Note, the New
Note Loan Agreement, the New Note Security Documents, and any
instruments, documents or agreements executed by any of the Companies in
connection therewith.
"Junior Secured Creditor" shall mean the New Note Holder.
"New Note" shall have the meaning provided in the fifth recital
hereof.
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"New Note Collateral" shall have the meaning provided in the
sixth recital hereof.
"New Note Holder" shall mean the holder from time to time of the
New Note, and, until such time as the New Note is released and
discharged from the TEC Pledge Agreement by instrument in writing
executed by the TEC Note Trustee, the term "New Note Holder" shall mean
the TEC Note Trustee.
"New Note Loan Agreement" shall have the meaning provided in the
fifth recital hereof.
"New Note Security Documents" shall have the meaning provided in
the sixth recital hereof.
"Obligations" shall mean, collectively, the Senior Obligations
and the Junior Obligations.
"Primary Documents" shall mean, collectively, the TARC Note
Indenture and the New Note Loan Agreement.
"Pro Rata Share" shall mean, when calculating a Senior Secured
Creditor's portion of any distribution or amount, that amount (expressed
as a percentage) equal to a fraction the numerator of which is the then
outstanding amount of such Senior Secured Creditor's Senior Obligations
(immediately before such distribution) and the denominator of which is
the then outstanding amount of all Senior Obligations which are entitled
to be paid with such distribution pursuant to the terms of this
Agreement.
"Required Secured Creditors" shall mean (a) the holders of at
least 50% in aggregate principal amount of the outstanding Securities or
(b) the New Note Holder and the TARC Note Trustee, on behalf of the TARC
Note Holders.
"Requisite Holders" shall mean the New Note Holder or the Holders
of 25% in aggregate principal amount of then outstanding TARC Notes.
"Secured Creditors" shall mean, collectively, the TEC Note
Trustee, together with the TEC Note Holders, the Senior Secured
Creditors and the Junior Secured Creditor.
"Securities" shall mean, collectively, the New Note and the TARC
Notes.
"Senior Obligations" shall mean all indebtedness and other
monetary obligations, including, without limitation, all principal,
interest, fees, premium, if any, costs and expenses payable, of the
Companies to the Senior Secured Creditor under the TARC Notes, the TARC
Note Indenture, the TARC Note Security Documents, and any instruments,
documents or agreements executed by any of the Companies in connection
therewith.
"Senior Secured Creditors" shall mean the TARC Note Trustee,
together with the TARC Note Holders.
"Shared Collateral" means Collateral that is subject to the liens
and security interests of any one or more of the New Note Security
Documents or the TEC Pledge Agreement and the liens and security
interests of any one or more of the TARC Note Security Documents.
"TARC Note Collateral" shall have the meaning provided in the
third recital hereof.
"TARC Note Holders" shall mean, collectively, the holders from
time to time of the TARC Notes.
"TARC Note Indenture" shall have the meaning provided in the
first recital hereof.
"TARC Note Security Documents" shall have the meaning provided in
the third recital hereof.
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"TARC Note Trustee" shall mean First Union National Bank, in its
capacity as Trustee under the TARC Note Indenture or, upon its
resignation or removal as TARC Note Trustee, any successor Trustee
appointed pursuant to the provisions of Section 7 of the TARC Note
Indenture.
"TARC Notes" shall have the meaning provided in the first recital
hereof.
"TEC Notes" shall mean, collectively, the $475,000,000 aggregate
principal amount of 11 1/2% Senior Secured Notes due 2002 and the
$1,130,000,000 aggregate principal amount of 13% Senior Secured Discount
Notes due 2002, issued by TEC pursuant to the TEC Note Indenture.
"TEC Note Holders" shall mean, collectively, the holders from
time to time of the TEC Notes.
"TEC Note Indenture" shall mean the Indenture, dated as of June
13, 1997, between TEC and the TEC Note Trustee, pursuant to which TEC
has issued the TEC Notes.
"TEC Note Pledge Agreement" shall have the meaning provided in
the eighth recital hereof.
"TEC Note Trustee" shall mean Firstar Bank of Minnesota, N.A., in
its capacity as Trustee under the TEC Note Indenture or, upon the
resignation or removal of Firstar Bank of Minnesota, N.A., as TEC Note
Trustee, any successor Trustee appointed pursuant to the provisions of
Section 7.8 of the TEC Note Indenture.
"TEC Pledge Agreement" shall have the meaning provided in the
seventh recital hereof.
"Trustees" shall mean the TEC Note Trustee, the New Note Holder
and the TARC Note Trustee.
Section 2. Appointment. TEC, as payee of the New Note, the TEC Note
Trustee, for the benefit of the TEC Note Holders, and the TARC Note Trustee,
for the benefit of the TARC Note Holders, hereby jointly designate and appoint
the Collateral Agent, and the Collateral Agent hereby accepts such appointment,
to act as collateral agent and representative of the TEC Note Trustee and New
Note Holder, for the benefit of the TEC Note Holders, and the TARC Note
Trustee, for the benefit of the TARC Note Holders, in the manner and upon the
terms and conditions set forth herein. Subject to Sections 11, 12(a) and 13,
from after the date hereof, any Shared Collateral in the possession of either
of the Trustees (or any of its agents) shall be held by such Trustee (or agent)
as an agent and representative of the Collateral Agent hereunder. Concurrently
with the execution of this Agreement, or as soon as practicable thereafter,
each of the Trustees shall deliver any and all Shared Collateral in its
possession (or the possession of any of its agents), as of the date hereof or
at any time thereafter, to the Collateral Agent, who shall hold such Shared
Collateral on behalf of the Trustees for the benefit of the Holders with notice
of their respective security interests therein. The TEC Note Trustee on behalf
of the TEC Note Holders, TEC and the TEC Note Trustee, on behalf of the New
Note Holder, and the TARC Note Trustee, on behalf of the TARC Note Holders,
each hereby irrevocably authorizes, and each Secured Creditor, by its
acceptance of any Security, shall be deemed irrevocably to have authorized, the
Collateral Agent to (a) take such action on behalf of the TEC Note Trustee and
on behalf of the TARC Note Trustee, for the benefit of the TARC Note Holders,
under the provisions of this Agreement and any of the Collateral Documents and
to exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of the Collateral Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto,
and (b) exercise, on behalf of the TEC Note Trustee for the benefit of the TEC
Note Holders, on behalf of the New Note Holder and on behalf of the TARC Note
Trustee, for the benefit of the TARC Note Holders, all remedies available to
the Trustees under the Collateral Documents, including, without limitation, the
right to foreclose or otherwise realize upon any of the Shared Collateral and
to initiate, prosecute and defend any and all legal proceedings against the
Companies or any other party to any Collateral Document to the extent that such
legal proceedings relate to or affect the Shared Collateral or the interests of
the Secured Creditors. The Collateral Agent may perform any of its duties
hereunder by or through its agents or employees.
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Section 3. Nature of Duties. The Collateral Agent shall have no
duties or responsibilities except those expressly set forth or described herein
or in the Collateral Documents. Neither the Collateral Agent nor any of its
officers, directors, employees or agents shall be liable for any claims,
losses, damages, penalties, actions, judgments, suits, liabilities,
obligations, costs or expenses of any kind or nature whatsoever resulting from
any action taken or omitted by it as such hereunder or under any Collateral
Document or in connection herewith or therewith, unless caused by its or their
gross negligence, bad faith or willful misconduct. The Collateral Agent shall
not have, by reason of this Agreement or any Collateral Document, a fiduciary
relationship in respect of any Secured Creditor, and nothing in this Agreement
or any Collateral Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations in respect of
any Collateral Document except as expressly set forth herein.
Section 4. Lack of Reliance on the Collateral Agent. The Collateral
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Trustee or Secured Creditor with any credit or other
information with respect to any of the Companies, whether currently in its
possession or coming into its possession at any time or times hereafter, except
to the extent specifically provided in this Agreement.
Section 5. Exercise of Remedies under Collateral Documents.
(a) Trustee's Notices. If any Trustee has notice of a Default or
Event of Default, such Trustee shall give notice to the other Trustees and to
the Collateral Agent within three Business Days after such notice of Default or
Event of Default. If a Trustee or the Requisite Holders by notice to the
Issuer declare all unpaid principal and accrued interest to the date of
acceleration on the TEC Note, the New Note or the TARC Notes then outstanding
to be due and payable, or if such principal and interest ipso facto becomes due
and payable pursuant to Section 6.2 of the TEC Note Indenture, Section 8.1(e)
or Section 8.1(f) of the New Note Loan Agreement or Section 6.2 of the TARC
Note Indenture, the TEC Note Trustee, if the TEC Notes become due and payable,
the New Note Holder, if the New Note becomes due and payable, or the TARC Note
Trustee, if the TARC Notes become due and payable, shall give notice to the
Collateral Agent and the other Trustees of such acceleration (an "Acceleration
Notice") within three Business Days after such acceleration. Upon receipt by
the Collateral Agent of an Acceleration Notice or upon receipt by the
Collateral Agent of notice of an Event of Default under the TEC Note Indenture,
the TARC Note Indenture or the New Note Loan Agreement, together with
instructions from the Required Secured Creditors as to the actions to be taken
by the Collateral Agent, the Collateral Agent shall, within three Business Days
after receipt of such notice and instructions, commence the taking of such
actions toward collection or enforcement of any Collateral Document and the
Shared Collateral (or any portion thereof), including, without limitation,
action toward foreclosure upon any Shared Collateral, as instructed by the
Required Secured Creditors. If any Default or Event of Default which was the
basis for the giving of a notice to the Collateral Agent shall be cured or
waived, and, in the case where there has been an acceleration, rescission of
such acceleration has occurred, in accordance with the terms of the TEC Note
Indenture, the TARC Note Indenture or the New Note Loan Agreement, any
direction to the Collateral Agent to take any action in connection with such
notice shall be deemed rescinded upon notification by the TEC Note Trustee,
TARC Note Trustee or the New Note Holder given to the Collateral Agent of such
cure or waiver and rescission of acceleration, if applicable.
(b) Duty to Instruct. If the Obligations under one of the TEC Note
Indenture, the TARC Note Indenture or the New Note Loan Agreement have been
accelerated or an Event of Default has occurred or is continuing under the TEC
Note Indenture, the TARC Note Indenture or New Note Loan Agreement and the TARC
Note Trustee or the New Note Holder, as applicable, has notice thereof, such
Trustee shall send written notice thereof to the Collateral Agent and shall
instruct the Collateral Agent as to the actions, if any, toward foreclosure on
the Shared Collateral that such Trustee deems appropriate in its discretion.
(c) Rights of Collateral Agent.
(i) Right to Rely. The Collateral Agent may rely on any
document reasonably believed by it to be genuine and to have been signed
or presented by the proper person. The Collateral Agent need not
investigate any fact or matter stated in any such document. Before the
Collateral Agent acts or refrains
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from acting it may consult with counsel and may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to Section
13.4 or 14.5 (as the case may be) of the TEC Note Indenture or TARC Note
Indenture. The Collateral Agent shall not be liable for any action it
takes or omits to take in good faith in reliance on any such certificate
or opinion.
(ii) Attorneys/Agents. The Collateral Agent may act through
its attorneys and agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
(iii) Good Faith Belief in Authority, Rights or Powers. The
Collateral Agent shall not be liable for any action it takes or omits to
take in the good faith belief that such act or omission was authorized
or within its rights or powers.
(iv) No Investigation. The Collateral Agent shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture or other paper or
document, but the Collateral Agent, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit.
(v) Obligation to Act upon Instructions. The Collateral Agent
shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement and/or any Collateral Document at the
request, order or direction of any of the Secured Creditors, pursuant to
the provisions of this Agreement and/or the TARC Note Indenture, the TEC
Note Indenture or the New Note Loan Agreement or any Collateral
Document, unless such Secured Creditors shall have offered to the
Collateral Agent reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby. Upon
receipt of such reasonable security or indemnity, however, the
Collateral Agent shall act upon the instructions of the Required Secured
Creditors. Notwithstanding the foregoing, the Collateral Agent shall
not take or refrain from taking such action if so taking or refraining
from taking such action, as the case may be, would violate applicable
law or the terms of the Collateral Documents or the Primary Documents.
(vi) Requests for Instructions. If the Collateral Agent shall
request instructions from the Secured Creditors with respect to any act
or action (including failure to act) in connection with this Agreement
or any Collateral Document, the Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until the
Collateral Agent shall have received instructions from the Required
Secured Creditors, and the Collateral Agent shall not incur liability to
any person by reason of so refraining. Without limiting the foregoing,
no Secured Creditor shall have any right of action whatsoever against
the Collateral Agent as a result of the Collateral Agent acting or
refraining from acting hereunder or under any Collateral Document in
accordance with the instructions of the Required Secured Creditors in
accordance with this Agreement and the Collateral Documents.
Notwithstanding the foregoing, the Collateral Agent may not refuse to
perform the duties expressly required of it by the terms of this
Agreement.
Section 6. Compensation and Indemnification.
(a) Compensation and Expenses. The Companies agree, jointly and
severally, to pay to the Collateral Agent from time to time upon demand,
reasonable compensation for the services of the Collateral Agent hereunder and
all reasonable fees, out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and disbursements of
counsel) (A) arising in connection with the preparation, execution, delivery,
modification and termination of this Agreement or the enforcement of any of the
provisions hereof or of any Collateral Document, or (B) incurred or required to
be advanced in connection with the sale or other disposition of any Shared
Collateral pursuant to any Collateral Document and the preservation, protection
or defense of the Collateral Agent's rights hereunder and/or under the
Collateral Documents and in and to the Shared Collateral.
(b) Stamp and Other Taxes. The Companies hereby agree, jointly and
severally, to the extent permitted by applicable law, to indemnify the
Collateral Agent, each Trustee and each Secured Creditor for, and hold each of
them harmless against, any present or future claim for liability for any stamp
or other similar tax and any penalties
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or interest with respect thereto, which may be assessed, levied or collected by
any jurisdiction in connection with any Collateral Document or any Shared
Collateral (other than taxes on the income of the Collateral Agent or franchise
taxes imposed on the Collateral Agent).
(c) Filing Fees, Excise Taxes, Etc. The Companies hereby agree,
jointly and severally, to the extent permitted by applicable law, to pay or to
reimburse the Collateral Agent for any and all amounts in respect of all
search, filing, recording and registration fees, taxes, excise taxes and other
similar imposts which may be payable or determined to be payable in respect of
the execution, delivery, performance and enforcement of this Agreement or any
Collateral Document (other than taxes on the income of the Collateral Agent or
franchise taxes imposed on the Collateral Agent).
(d) Indemnification of Collateral Agent. The Companies shall,
jointly and severally, indemnify the Collateral Agent for, and hold it harmless
against, any and all claims, demands, expenses (including, but not limited to,
reasonable compensation, disbursements and expenses of the Collateral Agent's
agents and counsel), losses or liabilities incurred by it without negligence,
bad faith or willful misconduct on its part in any way arising out of or in
connection with the acceptance and administration of this Agreement and its
rights or duties hereunder or under any Collateral Document. The Collateral
Agent shall notify the Companies promptly of any claim asserted against the
Collateral Agent for which it may seek indemnity. The Companies shall defend
any such claim and the Collateral Agent shall provide reasonable cooperation at
the Companies' expense in such defense. The Collateral Agent may have separate
counsel and the Companies shall pay the reasonable fees and expenses of such
counsel; provided, that the Companies will not be required to pay such fees and
out-of-pocket expenses if it assumes the Collateral Agent's defense and
provides the Collateral Agent with an Opinion of Counsel that there is no
conflict of interest between the Companies and the Collateral Agent in
connection with such defense. The Companies need not pay for any settlement
made without its written consent. The Companies need not reimburse any expense
or indemnify against any loss or liability to the extent incurred by the
Collateral Agent through its negligence, bad faith or willful misconduct. When
the Collateral Agent incurs expenses or renders services after an Event of
Default specified in Section 6.1(e) or (f) of the TARC Note Indenture occurs,
such expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law.
(e) Survival of Obligations. All obligations set forth in this
Section 6 shall survive the execution, delivery and termination of this
Agreement and the other Collateral Documents and the payment of all other
Obligations.
(f) Lien on Shared Collateral. To secure the obligations of the
Companies set forth in this Section 6, the Collateral Agent shall have a Lien
pari passu with that of the TARC Note Trustee, in the case in which there are
any Senior Obligations outstanding under the TARC Note Indenture, or a lien
prior to that of the TEC Note Trustee and the New Note Holder, in the case in
which there are no Obligations outstanding under the TARC Note Indenture, but
there are any Obligations outstanding under the TEC Note Indenture or the New
Note Loan Agreement, on all Shared Collateral held or collected by the
Collateral Agent in its capacity as such.
Section 7. Collateral Agent's Dealings with the Companies. The
Collateral Agent may accept deposits from, lend money to, or generally engage
in any kind of banking, trust or other business with the Companies or any of
their Affiliates, in each case, as if it were not the Collateral Agent
hereunder.
Section 8. Holders. The Collateral Agent may deem and treat the TEC
Note Trustee as the Holder of the New Note for all purposes hereunder, and the
TEC Note Trustee shall be deemed to be the registered owner of the New Note for
all purposes hereunder. The Collateral Agent may deem and treat the registered
owner of any of the Securities as the owner thereof for all purposes hereunder.
Any request, authority or consent of any person or entity who, at the time of
making such request or giving such authority or consent, is the registered
owner of any Security, shall be conclusive and binding upon any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Security
or any security issued in exchange therefor. Upon the written or telephonic
request of the Collateral Agent, the TARC Note Trustee agrees to furnish to the
Collateral Agent a list of the registered owners of all Securities issued under
the TARC Note Indenture and the outstanding principal amount of each and all
such
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Securities within 10 Business Days after any request therefor from the
Collateral Agent, and the New Note Holder shall also notify the Collateral
Agent as to the outstanding balance of the New Note. The Collateral Agent
shall be entitled to rely on such information as being accurate and complete.
Section 9. Resignation by or Removal of the Collateral Agent.
(a) Resignation; Removal. The Collateral Agent may resign from the
performance of all of its functions and duties hereunder by giving 20 Business
Days' prior written notice to the Companies and the Trustees. The Required
Secured Creditors may, at any time, remove the Collateral Agent by giving 20
Business Days' prior written notice to the Companies, the Trustees and the
Collateral Agent. Such resignation or removal shall take effect upon the
appointment of a successor Collateral Agent pursuant to paragraph (b) or (c)
below or as otherwise provided below.
(b) Appointment of Successor. Upon any such notice of resignation or
removal, the Required Secured Creditors shall appoint a successor Collateral
Agent hereunder who shall be an Acceptable Bank. If a successor Collateral
Agent shall not have been so appointed within the period specified in Section
9(a), the Collateral Agent, with the consent of the Companies, shall then
appoint a successor Collateral Agent which shall serve as Collateral Agent
hereunder until such time, if any, as the Required Secured Creditors appoint a
successor Collateral Agent as provided above.
(c) Effectiveness of Resignation or Removal. A successor Collateral
Agent shall deliver a written acceptance of its appointment to the retiring
Collateral Agent and to the Companies. Immediately thereafter, the retiring
Collateral Agent shall transfer all property held by it as Collateral Agent to
the successor Collateral Agent, subject to the Lien provided in Section 6(f),
and shall execute and deliver to the successor Collateral Agent such documents
as are necessary to perfect or maintain the security interests of the Trustees
in the Shared Collateral, including any documents necessary to assign or
transfer all interests of the retiring Collateral Agent in the Shared
Collateral to the successor Collateral Agent, in the form or forms adequate for
proper filing or recording in such offices and such jurisdictions as are
necessary to put the successor Collateral Agent in the same position as was the
retiring Collateral Agent with respect to the Shared Collateral. Thereafter,
the resignation or removal of the retiring Collateral Agent shall become
effective and the successor Collateral Agent shall have all the rights, powers
and duties of the Collateral Agent under this Agreement. A successor
Collateral Agent shall give notice of its succession to each Secured Creditor.
(d) Consolidation, Merger, Etc. If the Collateral Agent consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation, the resulting, surviving or
transferee corporation without any further act shall, if such resulting,
surviving or transferee corporation is an Acceptable Bank, be the successor
Collateral Agent. The transferring, merging or converting Collateral Agent
shall have all documents necessary to perfect or maintain the security interest
of the Trustees in the Shared Collateral, including any documents necessary to
assign or transfer all interests of the transferring, merging or converting
Collateral Agent in the Shared Collateral, executed and delivered to it in the
form or forms adequate for proper filing or recording in such offices and such
jurisdictions as are necessary to put the successor Collateral Agent in the
same position as the transferring, merging or converting Collateral Agent with
respect to the Shared Collateral.
(e) Compensation Continuing. Any person or entity acting as
Collateral Agent shall continue to be entitled to receive compensation as
provided in Section 6 hereof so long as such person or entity acts as
Collateral Agent hereunder.
Section 10. Release or Substitution of Shared Collateral. The
Collateral Agent shall, at any time and from time to time, release or
substitute all or any portion of the Shared Collateral in accordance with and
upon receipt of written instructions from the Required Secured Creditors. The
Secured Creditors agree that each such release or substitution shall be binding
and conclusive upon them and hereby waive all rights and claims with respect to
such release or substitution.
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Section 11. First and Prior Rights of Senior Secured Creditors; Second
Rights of Junior Secured Creditor.
(a) As long as all or any portion of the Senior Obligations remains
outstanding, unpaid or unsatisfied, each of the Junior Secured Creditor agrees
that (i) except as expressly set forth in this Section 11(a), the Junior
Obligations shall be and hereby are subordinated and the payment thereof is
deferred until the full and final payment in cash of the Senior Obligations,
(ii) its interest in the Shared Collateral shall, irrespective of the time,
order or method of perfection or creation of any security interests or liens in
the Shared Collateral on behalf of any Secured Creditor, or the recording of
mortgages or filing of financing statements or any other recordings or filings,
be junior and subordinated, and inferior in priority, operation and effect, to
the interests of the Senior Secured Creditors in the Shared Collateral to the
extent and in the manner provided herein, and (iii) it shall refrain from
taking any action to foreclose upon, take possession of, liquidate or otherwise
proceed against the Shared Collateral, whether under the New Note Security
Documents or otherwise, except as expressly set forth herein. Notwithstanding
the preceding provisions of this Section 11(a), the Companies shall be
permitted to pay, and the Junior Secured Creditor shall be permitted to
receive, any regularly scheduled payment of interest or principal on the New
Note so long as at the time of such payment, or after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing under the
TARC Note Indenture or would occur thereunder after giving effect to such
payment.
(b) The Junior Secured Creditor will hold in trust and immediately
pay over to the TARC Note Trustee, in the same form of payment received, with
appropriate endorsements, for application to the Senior Obligations, any cash
amount that any of the Companies pays to the Junior Secured Creditor with
respect to the New Note, or, as collateral for the Senior Obligations, any
other assets of any of the Companies that the Junior Secured Creditor may
receive with respect to the Junior Obligations, in each case, except with
respect to payments expressly permitted pursuant to Section 11(a).
Section 12. Bankruptcy, Etc.
(a) At any meeting of creditors of the Issuer or in the event of any
case or proceeding, voluntary or involuntary, for the distribution, division or
application of all or part of the assets of the Issuer or the proceeds thereof,
whether such case or proceeding is for the liquidation, dissolution or winding
up of the Issuer or its business, a receivership, insolvency or bankruptcy case
or proceeding, an assignment for the benefit of creditors or a proceeding by or
against the Issuer for relief under the Bankruptcy Law, the Collateral Agent is
hereby irrevocably authorized at any such meeting or in any such proceeding to
receive or collect any cash or other assets of the Issuer distributed, divided
or applied by way of dividend or payment, or any securities issued on account
of any Junior Obligation, and turn over such cash or such other assets or
securities to the TARC Note Trustee as collateral for the Senior Obligations,
and to have applied to the Senior Obligations any cash proceeds of any
realization upon such other assets or securities until all of the Senior
Obligations shall have been paid in full in cash, rendering to the Junior
Secured Creditor any surplus to which such Junior Secured Creditor are then
entitled.
(b) At any such meeting of creditors or in the event of any such case
or proceeding, the Junior Secured Creditor shall retain the right to vote and
otherwise act with respect to the Junior Obligations (including, without
limitation, the right to vote to accept or reject any plan of partial or
complete liquidation, reorganization, arrangement, composition or extension),
provided, that the Junior Secured Creditor shall not vote with respect to any
such plan or take any other action in any way so as to contest (i) the validity
of any Senior Obligation or any TARC Note Collateral therefor or guaranties
thereof, (ii) the relative rights and duties of any TARC Note Holder
established in any instruments or agreements creating or evidencing any of the
Senior Obligations with respect to any of such Shared Collateral or guaranties
or (iii) the Junior Secured Creditor's obligations and agreements set forth in
this Agreement.
Section 13. Application of Payments Received from Realization on the
Shared Collateral.
(a) Upon the occurrence of any event described in Section 12, all
monies received by the Collateral Agent from the sale, liquidation or otherwise
of the Shared Collateral shall be distributed as provided below:
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(i) first, to pay the reasonable costs and expenses of the
Collateral Agent in obtaining such proceeds;
(ii) to the extent proceeds remain after the distribution
pursuant to clause (i) above, an amount equal to the outstanding Senior
Obligations held by the Senior Secured Creditors shall be paid to such
Senior Secured Creditors, with each Senior Secured Creditor receiving an
amount equal to its outstanding Senior Obligations or, if the proceeds
are insufficient for the payment in full of all Senior Obligations held
by the Senior Secured Creditors, its Pro Rata Share of the amount
available to be distributed pursuant to this clause (ii);
(iii) to the extent proceeds remain after the applications
required by clauses (i) and (ii) above, such proceeds shall be paid to
the New Note Holder for application to the Junior Obligations; and
(iv) to the extent proceeds remain after the applications
required by clauses (i), (ii) and (iii) above, such proceeds shall be
paid to the Issuer or its successors or assigns.
(b) Except upon the occurrence of any event described in Section 12,
all monies received by the Collateral Agent from the sale, liquidation or
otherwise of the Shared Collateral shall be applied, (i) if no Event of Default
under the TARC Note Indenture shall have occurred and be continuing or shall
result thereunder from the payment of the Junior Obligations, to the payment of
the Obligations so as not to impair or affect the right of the TARC Note
Holders to receive payments on the Senior Obligations as and when due, and (ii)
to the payment of the Senior Obligations if an Event of Default under the TARC
Note Indenture shall have occurred and be continuing or shall result thereunder
from the payment of the Junior Obligations. Notwithstanding anything to the
contrary in this Section 13(b), at all times other than during periods in which
an Event of Default shall have occurred and is continuing, the Collateral Agent
may release Collateral to one or more of the Companies from time to time as
permitted in the Primary Documents.
(c) Nothing contained in this Agreement shall or shall be construed
to prohibit, limit or otherwise affect the rights of the Issuer to transfer,
dispose of or otherwise deal with its properties and assets included within the
Shared Collateral, and the proceeds thereof, in any manner permitted under the
Primary Documents.
(d) Nothing contained in this Agreement shall or shall be construed
to impair or affect the right of the TARC Note Holders to receive payments of
principal of and interest on the TARC Notes as and when due or the right of the
Holder of any TARC Note to institute suit for the enforcement of any payment
thereon as and when due.
Section 14. Further Assurances. Each party hereto covenants to
execute and deliver such further instruments and to take such further action as
the Collateral Agent or the Required Secured Creditors may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement.
Section 15. Notices. Any notice or other communication in connection
with this Agreement shall be effective if made in writing, addressed to such
party at its address set forth opposite its signature below, and delivered or
mailed postage prepaid, or at such other addresses as the addressee shall have
specified by notice given in compliance with this Section 15. All notices to
any Holder shall be given by delivering or mailing such notice to the New Note
Holder or the TARC Note Trustee, as the case may be. Notices shall be deemed
given upon the earlier to occur of (i) the third day following deposit thereof
in the U.S. Mail, first class postage prepaid, or (ii) receipt by the party to
whom such notice is directed.
Section 16. Benefit of Agreement; Obligations Several. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, administrators, successors and assigns of the parties hereto.
The obligations of each of the parties to this Agreement are several and not
joint, it being expressly agreed that no Trustee shall be liable for the
failure of any other Trustee to perform its obligations hereunder. Each
Secured Creditor, including without limitation, each Holder by its acceptance
of a Security, hereby consents to and agrees to be bound by the provisions
hereof applicable to such Secured Creditor.
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Section 17. Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
be governed by the laws of the State of New York. Any legal action or
proceeding with respect to this Agreement may be brought in courts of the State
of New York or of the United States of America for the Southern District of New
York and, by execution and delivery of this Agreement, each party hereto hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Section 18. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Collateral
Agent.
Section 19. Effectiveness. This Agreement shall become effective on
the date on which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to the
Collateral Agent at its address set forth opposite its signature below. This
Agreement shall remain effective until all of the Senior Obligations are
irrevocably paid in full (or deemed to have been paid and discharged pursuant
to Article Eight of the TARC Note Indenture), provided, that once the
Obligations owed to any Secured Creditor shall have been irrevocably paid in
full and its rights and obligations under the Primary Documents, as the case
may be, have been terminated, such Secured Creditor shall have no further
rights or obligations hereunder.
Section 20. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
Section 21. Amendment or Waiver. This Agreement may be amended,
changed, waived or terminated with the written consent of the Required Secured
Creditors, provided, that such amendment, waiver, modification or termination
shall not impair or affect the right of the TARC Note Holders to receive
payments of principal of and interest on the TARC Notes as and when due or the
right of the Holder of any TARC Note to institute suit for the enforcement of
any payment thereon as and when due; and provided further, that the provisions
of Sections 11, 12 and 13 shall not be amended, changed, waived, or terminated
without the prior written consent of the majority of holders of the outstanding
principal amount of the Senior Obligations, provided, however, that no such
consent of any Secured Creditor shall be required if the Obligations to such
Secured Creditor shall have been irrevocably paid in full and are no longer
outstanding.
Section 22. Survival. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the repayment of all
Obligations.
Section 23. Inconsistent Provisions. If any provision of this
Agreement shall be inconsistent with, or contrary to, any provision in any
Collateral Document, the provision in this Agreement shall be controlling, and
shall supersede such inconsistent provision to the extent necessary to give
full effect to all provisions contained in this Agreement.
Section 24. Shared Collateral. Notwithstanding anything to the
contrary contained in the TEC Pledge Agreement, the New Note Security Documents
or the TARC Note Security Documents, Shared Collateral in the possession of the
Collateral Agent pursuant to this Agreement, in the possession of TEC or the
TEC Note Trustee pursuant to any of the New Note Security Documents, or in the
possession of the TARC Note Trustee pursuant to any of the TARC Note Security
Documents shall, pursuant to Section 9-305 of the Uniform Commercial Code as in
effect in the State of New York, be held by such party in possession for its
own account to the extent of its interest therein, and as pledgeholder and
bailee for each of the other Secured Creditors, so that each of the Secured
Creditors shall be deemed to have possession of such Shared Collateral. Each
Secured Creditor is authorized and directed by the Issuer to deliver to the
Collateral Agent for the benefit of the Secured Creditors pursuant to this
Agreement any Shared Collateral now or hereafter in the possession of such
Secured Creditor, and none of such Shared Collateral shall be released or
distributed to TEC or the Issuer without the prior written consent of the TEC
Note Trustee, on behalf of the TEC Note Holders or the Junior Secured Creditor,
and the TARC Note Trustee, on behalf of the Senior Secured Creditors.
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IN WITNESS WHEREOF, the Collateral Agent, the Trustees and the Companies
have caused this Agreement to be duly executed as of the day and year first
above written.
COLLATERAL AGENT
----------------
FIRST UNION NATIONAL BANK, as Collateral Agent
By: /s/ W. XXXXXXX XXXXXX
-------------------------------------------------------
Name: W. XXXXXXX XXXXXX
-----------------------------------------------------
Title: VICE PRESIDENT
----------------------------------------------------
TARC NOTE TRUSTEE
-----------------
FIRST UNION NATIONAL BANK, as TARC Note Trustee
By: /s/ W. XXXXXXX XXXXXX
-------------------------------------------------------
Name: W. XXXXXXX XXXXXX
-----------------------------------------------------
Title: VICE PRESIDENT
----------------------------------------------------
TEC NOTE TRUSTEE
----------------
FIRSTAR BANK OF MINNESOTA, N.A., as TEC Note Trustee
By: /s/ [ILLEGIBLE]
-------------------------------------------------------
Name: [ILLEGIBLE]
-----------------------------------------------------
Title: Vice President
----------------------------------------------------
COMPANIES
---------
TRANSAMERICAN ENERGY CORPORATION
By: /s/ XX XXXXXXX
-------------------------------------------------------
Name: XX XXXXXXX
-----------------------------------------------------
Title: Vice President
----------------------------------------------------
TRANSAMERICAN REFINING CORPORATION
By: /s/ XX XXXXXXX
-------------------------------------------------------
Name: XX XXXXXXX
-----------------------------------------------------
Title: Vice President
----------------------------------------------------
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Schedule I
TARC Note Security Documents
1. Pledge Agreement dated February 23, 1995, between TransAmerican
Energy Corporation ("TEC") and First Fidelity Bank, National Association, as
Trustee.
2. Pledge Agreement dated February 23, 1995, between TransAmerican
Refining Corporation ("TARC") and First Fidelity Bank, National Association, as
Trustee.
3. Security Agreement dated February 23, 1995, between TARC and
First Fidelity Bank, National Association, as Trustee.
4. Cash Collateral and Disbursement Agreement dated as of February
23, 1997, among TARC, First Fidelity Bank, National Association, as Trustee,
First Fidelity Bank, National Association, as Disbursement Agent, and Xxxxx &
X'Xxxxx, Inc., as Construction Supervisor.
5. Mortgage, Assignment of Leases and Rents, Security Agreement and
Financing Statement dated February 21, 1995, from TARC to First Fidelity Bank,
National Association, a national banking association, as Indenture Trustee.
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Schedule II
New Note Security Documents
1. Security and Pledge Agreement dated as of June 13, 1997, made by
TransTexas Energy Corporation ("TransTexas") in favor of Firstar Bank of
Minnesota, N.A., as collateral agent.
2. Act of Mortgage, Security Agreement and Financing Statement dated
as of June 13, 1997, executed by TARC for the benefit of TransTexas Energy
Corporation (the "TransTexas Louisiana Mortgage").
3. Security and Pledge Agreement dated as of June 13, 1997 (the
"TARC Pledge") executed by TARC in favor of TransAmerican Energy Corporation.
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