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EXHIBIT 4.10
DISBURSEMENT AGREEMENT
among
TRANSTEXAS GAS CORPORATION,
TRANSAMERICAN ENERGY CORPORATION,
FIRSTAR BANK OF MINNESOTA, N.A.,
as securities intermediary and disbursement agent,
and
FIRSTAR BANK OF MINNESOTA, N.A.,
as trustee
June 13, 1997
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DISBURSEMENT AGREEMENT
This Disbursement Agreement dated as of June 13, 1997 (this
"Agreement") is entered into by and among TransTexas Gas Corporation, a
Delaware corporation ("TransTexas"), TransAmerican Energy Corporation, a
Delaware corporation ("TEC"), Firstar Bank of Minnesota, N.A., as securities
intermediary (as defined in the Revised UCC) and disbursement agent (the
"Disbursement Agent"), and Firstar Bank of Minnesota, N.A., as Trustee.
WHEREAS, TEC and the Trustee have entered into an Indenture dated
as of June 13, 1997 (the "Indenture"), pursuant to which TEC will issue
$475,000,000 aggregate principal amount of Senior Secured Notes due 2002 and
$1,130,000,000 aggregate principal amount of Senior Secured Discount Notes due
2002 (collectively, the "Notes");
WHEREAS, TEC and TransTexas have entered into a loan agreement
dated as of the date hereof (the "TransTexas Loan Agreement"), pursuant to
which TEC will lend to TransTexas an aggregate of $450,000,000 out of the
proceeds of the issuance of the Notes and TransTexas will execute a promissory
note in such amount in favor of TEC (the "TransTexas Intercompany Note" and
together with the TransTexas Loan Agreement, the "TransTexas Intercompany Loan
Documents");
WHEREAS, as security for the prompt and complete payment and
performance in full of obligations of TransTexas under the TransTexas
Intercompany Loan Documents, TransTexas has granted to TEC a security interest
in, among other things, the Disbursement Account (as defined below);
WHEREAS, as security for the prompt and complete payment and
performance in full of TEC's obligations under the Indenture and the Notes, TEC
has granted to the Trustee a security interest in, among other things, the
TransTexas Intercompany Loan Documents; and
WHEREAS, the Disbursement Agent has agreed to take such action
with respect to the Disbursement Account as is specified herein.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. Capitalized terms used but not
defined herein and in any schedules and exhibits hereto shall have the meanings
set forth in the TransTexas Loan Agreement.
As used in this Agreement, the following terms shall have the following
meanings:
"Accounts" means the Disbursement Account and the Interest Accumulation
Account.
"Agreement" has the meaning given to such term in the introductory
paragraph hereof.
"Date of Disbursement" means the date designated as such in each
Disbursement Certificate or
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TEC Certificate, as the case may be.
"Disbursement Account" has the meaning given to such term in Section
3.1(a).
"Disbursement Agent" has the meaning given to such term in the
introductory paragraph hereof.
"Disbursement Certificate" has the meaning given to such term in Section
4.2(a).
"Indenture" has the meaning given to such term in the recitals hereof.
"Interest Accumulation Account" has the meaning given to such term in
Section 3.1(b).
"Investments" has the meaning given to such term in Section 3.4(a).
"New York UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"Notes" has the meaning given to such term in the recitals hereof.
"Offering Circular" means TEC's Offering Circular dated June 5, 1997
relating to the offering of the Notes.
"Revised UCC" means Uniform Commercial Code, Revised Article 8,
Investment Securities (with Conforming and Miscellaneous Amendments to Articles
1, 3, 4, 5, 9 and 10), 1994 Official Text, as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws
and approved by the American Bar Association on February 15, 1995; provided,
however, that if and when the Revised UCC is enacted in the State of New York,
"Revised UCC" shall mean the Revised UCC as enacted in the State of New York
from time to time.
"TARC Disbursement Agreement" means the Disbursement Agreement dated as
of June 13, 1997 by and among TransAmerican Refining Corporation, a Texas
corporation, TEC, Firstar Bank of Minnesota, N.A., as disbursement agent, the
Trustee and Baker & O'Brien, Inc., as Construction Supervisor.
"TransTexas" has the meaning given to such term in the introductory
paragraph hereof.
"TransTexas Dividend/Share Repurchase Program" means the dividend and
share repurchase program (including without limitation the dividend and share
repurchase program described in the Offering Circular) to be implemented by
TransTexas, pursuant to which TransTexas will effect the payment of one or more
dividends on the common stock of TransTexas or the redemption, acquisition or
purchase, pursuant to a tender offer or any other transaction or mechanism, of
any shares of common stock of TransTexas.
"TransTexas Intercompany Loan Documents" has the meaning given to such
term in the recitals hereof.
"TransTexas Intercompany Note" has the meaning given to such term in the
recitals hereof.
"TransTexas Loan Agreement" has the meaning given to such term in the
recitals hereof.
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"TransTexas Security Agreement" means the Security and Pledge Agreement
dated as of June 13, 1997 by and between TransTexas and TEC.
"TEC" has the meaning given to such term in the introductory paragraph
hereof.
"TEC Security Agreement" means the Security and Pledge Agreement dated
as of June 13, 1997 by and between TEC and the Trustee.
"Trustee" means the trustee under the Indenture.
SECTION 1.2 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding."
ARTICLE II
DISBURSEMENT AGENT
SECTION 2.1 Appointment and Duties.
(a) TEC and TransTexas acknowledge and agree that Firstar Bank
of Minnesota, N.A. shall act as the Disbursement Agent under this
Agreement, and that the Disbursement Agent is and will act as a
"securities intermediary" (as defined in the Revised UCC) and as a
"financial intermediary" (as defined in the New York UCC as in effect on
the date hereof). TEC and TransTexas hereby authorize the Disbursement
Agent to take such actions, exercise such powers and perform such duties
as are expressly delegated to the Disbursement Agent by the terms of
this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary
elsewhere herein, the Disbursement Agent shall not have any duties or
responsibilities except those expressly set forth herein, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against
the Disbursement Agent.
(b) The Disbursement Agent shall give written notice to TEC
and TransTexas of any action taken by it hereunder (provided that no
such notice need be given under circumstances in which TEC and
TransTexas shall have received such notice by any other Person pursuant
to the terms of any other document); such notice shall be given prior to
the taking of such action, unless the Disbursement Agent determines that
to do so would be detrimental to the interests of TEC, in which event
such notice shall be given promptly after the taking of such action.
(c) The Disbursement Agent shall maintain appropriate books
and records with respect to the Accounts in which shall be recorded all
deposits and disbursements hereunder and any Investments made by the
Disbursement Agent and shall permit TEC, TransTexas or any of their
respective agents or representatives to inspect and to make copies of
such books and records at TransTexas's sole cost and expense.
(d) The Disbursement Agent shall use its good faith efforts
and utilize prudence in performing its duties hereunder consistent with
those of similar and prudent institutions disbursing disbursement
control funds.
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(e) On or prior to the last day of each calendar month, the
Disbursement Agent shall deliver to each of TEC and TransTexas a
reasonably detailed statement showing the balance of, disbursements from
and deposits to each of the Accounts.
SECTION 2.2 Rights of Disbursement Agent.
(a) The Disbursement Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be
entitled to rely on advice of counsel concerning all matters pertaining
to such duties, and protected in respect of any action taken in good
faith and in accordance with such advice.
(b) Neither the Disbursement Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement (except for its
or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to TEC for any recitals, statements,
representations or warranties made by TransTexas or any officer thereof
contained in any certificate, report, statement or other document
referenced or provided for in, or received by the Disbursement Agent
under or in connection with, this Agreement. The Disbursement Agent
shall not be under any obligation to TEC to inspect the properties,
books or records of TransTexas.
(c) The Disbursement Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document
or conversation reasonably believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to TransTexas), independent accountants and other
experts selected by the Disbursement Agent. The Disbursement Agent
shall be fully justified in failing or refusing to take any action
hereunder if such action would, in the opinion of the Disbursement
Agent, be contrary to law or the terms of this Agreement.
(d) The Disbursement Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default unless the
Disbursement Agent has received written notice from TEC, TransTexas or
the Trustee, describing such Event of Default and stating that such
notice is a "notice of default." The Disbursement Agent shall take such
action with respect to such Event of Default as shall be required by
this Agreement. No provision of this Agreement shall require the
Disbursement Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 2.3 Resignation and Removal of Disbursement Agent.
(a) Subject to the appointment and acceptance of a successor
Disbursement Agent as provided below, the Disbursement Agent may, at any
time, give a notice of resignation to TEC, TransTexas and the Trustee.
Upon receipt of any such notice of resignation, TransTexas shall have
the right to appoint a successor Disbursement Agent, which shall be a
bank or trust company reasonably acceptable to TEC and the Trustee. If
no successor Disbursement Agent
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shall have been appointed by TransTexas and shall have accepted such
appointment within thirty (30) days after the retiring Disbursement
Agent's giving of notice of resignation, then the retiring Disbursement
Agent may appoint a successor Disbursement Agent, which shall be a bank
or trust company reasonably acceptable to TEC, TransTexas and the
Trustee.
(b) Each of TEC and TransTexas shall have the right, upon the
expiration of thirty (30) days following delivery of written notice to
the Disbursement Agent and the other party, to cause the Disbursement
Agent to be relieved of its duties hereunder and to select a successor
Disbursement Agent to serve hereunder, which shall be a bank or trust
company reasonably acceptable to the other party.
(c) Upon the acceptance of any appointment as Disbursement
Agent hereunder by a successor Disbursement Agent, (i) such successor
Disbursement Agent, TEC, TransTexas and the Trustee shall enter into an
agreement substantially identical to this Agreement, (ii) such agreement
shall provide that such successor Disbursement Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Disbursement Agent, and that the retiring
Disbursement Agent shall be discharged from its duties and obligations
hereunder and (iii) the retiring Disbursement Agent shall promptly
transfer all cash and Investments in the Accounts to the possession or
control of the successor Disbursement Agent and shall execute and
deliver such notices, instructions and assignment as may be necessary to
transfer the rights of the Disbursement Agent with respect to all such
cash and Investments to the successor Disbursement Agent. After any
retiring Disbursement Agent's resignation or removal hereunder as
Disbursement Agent, the provisions of this Article shall continue in
effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as Disbursement Agent.
SECTION 2.4 Confirmations. The Disbursement Agent hereby confirms that
(i) it is a "securities intermediary" within the meaning of such term in the
Revised UCC, (ii) each of the Accounts is a "securities account" as such term
in defined in Section 8-501(a) of the Revised UCC, (iii) the Disbursement Agent
shall, subject to the terms of this Agreement, treat TEC as entitled to
exercise the rights that comprise any financial asset credited to any of the
Accounts, (iv) all property delivered to the Disbursement Agent pursuant to
this Agreement will be promptly credited to the Disbursement Account in
accordance with the terms hereof and (v) all securities or other property
underlying any financial assets credited to the Accounts shall be registered in
the name of the Disbursement Agent, endorsed to the Disbursement Agent or in
blank or credited to another securities account maintained in the name of the
Disbursement Agent.
SECTION 2.5 "Financial Assets" Election. The Disbursement Agent hereby
agrees that each item of property (whether investment property, financial
asset, security, instrument or cash) credited to the Accounts shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the Revised
UCC.
SECTION 2.6 Entitlement Orders. If at any time the Disbursement Agent
shall receive an "entitlement order" (within the meaning of Section 8-102(a)(8)
of the Revised UCC) issued by TEC and relating to the Accounts, the
Disbursement Agent shall comply with such entitlement order without further
consent by TransTexas or any other Person.
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SECTION 2.7 Representations, Warranties and Covenants of the
Disbursement Agent. The Disbursement Agent hereby makes the following
representations, warranties and covenants:
(a) The Accounts will be maintained in the manner set forth
herein until termination of this Agreement. The Disbursement Agent
shall not change the name or account number of any of the Accounts
without the prior written consent of TEC.
(b) No financial asset is or will be registered in the name of
TEC or TransTexas, payable to the order of TEC or TransTexas, or
specially endorsed to TEC or TransTexas, except to the extent such
financial asset has been endorsed to the Disbursement Agent or in blank.
(c) This Agreement is the valid and legally binding obligation of
the Disbursement Agent.
(d) The Disbursement Agent has not entered into, and until the
termination of this Agreement will not enter into, any agreement with
any other Person relating to the Accounts and/or any financial assets
credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the Revised
UCC) of such Person. The Disbursement Agent has not entered into any
other agreement with TEC, TransTexas or the Trustee purporting to limit
or condition the obligation of the Disbursement Agent to comply with
entitlement orders as set forth in Section 2.6.
SECTION 2.8 Notice of Adverse Claims. Except for the claims and
interest of TEC, the Trustee and of TransTexas in the Accounts, the
Disbursement Agent does not know of any claim to, or interest in, the Accounts
or in any "financial asset" (as defined in Section 8-102(a) of the Revised UCC)
credited thereto. If any Person asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Accounts or in any financial asset carried
therein, the Disbursement Agent will promptly notify TEC, the Trustee and
TransTexas thereof.
SECTION 2.9 Correspondence. The Disbursement Agent will promptly send
copies of all statements, confirmations and other correspondence concerning the
Accounts and/or any financial assets credited thereto simultaneously to each of
TEC, TransTexas and the Trustee in accordance with Section 6.2.
SECTION 2.10 Subordination of Lien; Waiver of Set-Off. In the event
that the Disbursement Agent has or subsequently obtains by agreement, operation
of law or otherwise a security interest in the Accounts or any security
entitlement credited thereto, the Disbursement Agent hereby agrees that such
security interest shall be subordinate to the security interests of TEC as
assigned to the Trustee. The financial assets and other items credited to the
Accounts will not be subject to deduction, set-off, banker's lien, or any other
right in favor of any Person other than the Trustee, except that the
Disbursement Agent may set off (i) all amounts due to the Disbursement Agent in
respect of the Disbursement Agent's customary fees and expenses for the routine
maintenance and operation of the Accounts, and (ii) the face amount of any
checks which have been credited to the Accounts but are subsequently returned
unpaid because of uncollected or insufficient funds.
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ARTICLE III
ACCOUNTS
SECTION 3.1 Establishment of the Accounts.
(a) On the date hereof, TransTexas has opened and shall
hereafter cause to be maintained with and at the corporate trust
department of the Disbursement Agent a custodial account (the
"Disbursement Account") under the sole dominion and control of the
Trustee, in the name of TransTexas but indicating the lien of the
Trustee as assignee. Funds shall be released from the Disbursement
Account only in accordance with the provisions of Article IV.
(b) TransTexas shall maintain with the Disbursement Agent a
segregated sub-account of the Disbursement Account (the "Interest
Accumulation Account") under the sole dominion and control of the
Trustee, in the name of TransTexas but indicating the lien of the
Trustee as assignee. Funds shall be deposited into the Interest
Accumulation Account in accordance with Section 3.4 and released
therefrom only in accordance with the provisions of Article IV.
SECTION 3.2 Deposits to the Disbursement Account. TransTexas shall
initially deposit to the Disbursement Account $399,284,000 out of the proceeds
received by it from the loan made pursuant to the TransTexas Intercompany Loan
Documents.
SECTION 3.3 Security Interest in the Disbursement Account.
(a) As security for the prompt and complete payment and
performance in full of all obligations under the TransTexas Intercompany
Loan Documents, including without limitation the TransTexas Intercompany
Note, TransTexas has agreed, pursuant to the TransTexas Security
Agreement, to grant to TEC a security interest in and a lien on and to
pledge and assign to TEC all of its right, title and interest in and to
the Accounts and all funds and investments deposited therein.
Furthermore, pursuant to the TEC Security Agreement, TEC has assigned
its interest in any collateral securing the TransTexas Intercompany
Note, including without limitation the Accounts, to the Trustee.
(b) The Disbursement Agent acknowledges notice of, and
consents to the terms and provisions of, the TransTexas Security
Agreement and the TEC Security Agreement and agrees that notwithstanding
anything to the contrary in this or any other agreement relating to the
Accounts, the Accounts are and will be subject to the terms and
conditions of the TransTexas Security Agreement and the TEC Security
Agreement, will be held in trust on behalf of TEC and the Trustee and
not commingled with any ordinary deposit or commercial bank account,
will be maintained with the corporate trust department of the
Disbursement Agent solely for TEC and the Trustee pursuant to the
TransTexas Security Agreement and the TEC Security Agreement and will be
subject to the written instructions of TEC and the Trustee given in
accordance with the TransTexas Security Agreement and the TEC Security
Agreement.
SECTION 3.4 Certain Agreements with respect to the Accounts.
(a) In accordance with written instructions received from
TransTexas, the Disbursement Agent shall (i) invest amounts on deposit
in the Accounts in such Cash Equivalents
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as TransTexas may select and credit such Cash Equivalents to the
Disbursement Account, (ii) deposit and hold in the Interest Accumulation
Account all interest paid on the Cash Equivalents referenced in clause
(i) above and invest such interest in such Cash Equivalents as
TransTexas may select and credit such Cash Equivalents to the Interest
Accumulation Account, (iii) reinvest other proceeds of the Cash
Equivalents referred to in clause (i) or (ii) above that may mature or
be sold in such Cash Equivalents and credit such Cash Equivalents to the
respective Account (all the Cash Equivalents referenced in clauses (i)
and (ii) above being, collectively, "Investments") and (iii) deposit and
hold in the respective Account all proceeds that are not invested or
reinvested in Investments.
(b) All disbursements and releases made pursuant to this
Agreement shall be made by the Disbursement Agent irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off
and shall be final, and the Disbursement Agent will not seek to recover
from TEC for any reason any such payment once made.
(c) The Trustee and TEC shall be entitled to exercise any and
all rights of TransTexas in respect of the Accounts in accordance with
the terms of the TEC Security Agreement and the TransTexas Security
Agreement, respectively, and the Disbursement Agent shall comply with
such exercise, subject to the provisions of Section 6.8.
(d) All service charges and fees with respect to this
Agreement or the Accounts shall be paid by TransTexas if not offset
against the Interest Accumulation Account.
SECTION 3.5 Valuation of Investments. For purposes of determining the
value of any amounts in the Accounts, all Investments shall be valued at the
lower of cost or market value.
ARTICLE IV
DISBURSEMENTS
SECTION 4.1 Priority Disbursements to TEC. At any time after the
TransTexas Intercompany Note is due and payable, upon maturity, acceleration
thereof or otherwise, funds in the Disbursement Account specified by TEC shall
be disbursed by the Disbursement Agent to any account specified by TEC, upon
receipt by the Disbursement Agent of a certificate of TEC substantially in the
form of Exhibit A hereto certifying that such amounts will be applied promptly
in satisfaction of obligations of TransTexas under the TransTexas Intercompany
Loan Documents.
SECTION 4.2 Ordinary Disbursements.
(a) Funds in the Disbursement Account shall be disbursed at
any time and from time to time for the account of TransTexas; provided
that TransTexas shall have delivered to the Disbursement Agent and TEC a
written notice substantially in the form of Exhibit B hereto (the
"Disbursement Certificate"), specifying the amount and date of the
requested disbursement. The Disbursement Certificate shall be executed
by a duly authorized officer of TransTexas.
(b) The Disbursement Agent shall disburse to TransTexas from
the Interest Accumulation Account any amount up to the balance therein
that TransTexas requests at any time that TransTexas so requests;
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(c) All remaining funds in the Disbursement Account shall be
disbursed for the account of TransTexas upon satisfaction of any of the
following conditions:
(i) The Disbursement Agent (as defined in the TARC
Disbursement Agreement) shall have received a Phase II Completion
Notice (as defined in the TARC Disbursement Agreement).
(ii) TransTexas shall have caused the Disbursement Agent
and TEC to receive an opinion of counsel reasonably satisfactory
to the Disbursement Agent, stating that completion of the
TransTexas Dividend/Share Repurchase Program is precluded by
applicable law.
SECTION 4.3 Disbursement Procedures.
(a) Subject to the terms and conditions of the TransTexas
Security Agreement and the TEC Security Agreement, the Disbursement
Agent shall sell all or such portion of the investments held in the
Disbursement Account (with the investments having the shortest
maturities sold first) as shall be necessary to fund the requested
disbursement in accordance with the terms hereof and in accordance with
written instructions of TEC or TransTexas, as the case may be, delivered
to the Disbursement Agent at least one Business Day prior to any
proposed Date of Disbursement.
(b) All disbursements shall be made by the later to occur of
(i) the requested Date of Disbursement or (ii) the second Business Day
after satisfaction of all conditions to such disbursement.
ARTICLE V
COVENANTS OF TRANSTEXAS AND TEC
SECTION 5.1 Covenants of TransTexas.
(a) Access to Information. TransTexas shall permit and cause
each of its Subsidiaries to permit TEC and the Disbursement Agent on
reasonable notice and at such times as shall be reasonably requested to
inspect and review all books and records of TransTexas and its
Subsidiaries relating to the TransTexas Dividend/Share Repurchase
Program and such other information as such Person shall reasonably
request relating to the TransTexas Dividend/Share Repurchase Program,
including contracts, offering documents and other supporting
documentation to substantiate amounts requested pursuant to a
Disbursement Certificate.
(b) Payment of Fees and Expenses. TransTexas shall promptly,
but no later than thirty (30) days after its receipt of an invoice, pay
the reasonable fees and expenses of the Disbursement Agent in connection
with this Agreement. To the extent available, such fees and expenses
may be paid through the Disbursement Account by including such amounts
in a Disbursement Certificate.
SECTION 5.2 Covenants of TEC. TEC shall give prompt written notice to
the Disbursement Agent upon (i) the occurrence of an Event of Default known to
it and (ii) upon cure or waiver of any
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such Event of Default known to it.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Amendments, Etc. No amendment, modification or waiver of
any provisions of this Agreement may be made except by written agreement of the
parties hereto.
SECTION 6.2 Notices, Etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be sufficiently
given if made by hand delivery, by telex, by facsimile or registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
To the Disbursement Agent:
Firstar Bank of Minnesota, N.A.
Corporate Trust Department
101 East Fifth Street, 12th Floor
St. Paul, Minnesota 55101-1860
Facsimile: (612) 229-6415
Attention: Frank Leslie
To TEC:
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Facsimile: (281) 986-8865
Attention: Ed Donahue
with a copy to:
Gardere & Wynne, L.L.P.
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Facsimile: (214) 999-4667
Attention: C. Robert Butterfield
To TransTexas:
TransTexas Gas Corporation
1300 North Sam Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Facsimile: (281) 986-8865
Attention: Ed Donahue
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with a copy to:
Gardere & Wynne, L.L.P.
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Facsimile: (214) 999-4667
Attention: C. Robert Butterfield
Any party hereto may by notice to each other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; five
calendar days after mailing, if sent by registered or certified mail; and one
business day after mailing, if sent by overnight delivery service (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
SECTION 6.3 No Waiver, Remedies. No failure on the part of the
Disbursement Agent, TEC or any Holder to exercise, and no delay in exercising,
any right under any Security Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
SECTION 6.4 Indemnity and Expenses.
(a) TransTexas agrees to indemnify the Disbursement Agent and
its officers, directors, employees, agents, attorneys-in-fact and
affiliates (the "Indemnified Parties"), from and against any and all
claims, losses and liabilities directly or indirectly caused by, related
to or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities
resulting from (i) valid claims of TransTexas against such Indemnified
Party arising out of a breach of this Agreement by such Indemnified
Party or (ii) such Indemnified Party's bad faith, gross negligence or
willful misconduct, in either case, as determined by a final judgment of
a court of competent jurisdiction.
(b) TransTexas shall, promptly upon demand but no later than
thirty (30) days after its receipt of an invoice, pay to the
Disbursement Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any
experts and agents, that the Disbursement Agent may incur in connection
with (i) this Agreement, (ii) the exercise or enforcement of any rights
hereunder or (iii) the failure by TransTexas to perform or observe any
of the provisions hereof.
SECTION 6.5 Execution in Counterparts. This Agreement may be executed
in any number of separate counterparts and by different parties hereto in
separate counterparts, each of which, when so executed, shall be deemed to be
an original and all of which, taken together, shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 6.6 Relationship of Disbursement Agent. The Disbursement Agent
shall not be under any responsibility in respect of the validity or sufficiency
of this Agreement or the execution and delivery hereof or in respect of the
validity or sufficiency of any document or agreement delivered in connection
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herewith, including, but not limited to, any document or agreement the forms of
which are attached hereto as Exhibits to this Agreement. The Disbursement
Agent shall not be accountable for the use or application of the funds in the
Disbursement Account or for disbursements therefrom, except as set forth in
this Agreement.
SECTION 6.7 Governing Law; Submission to Jurisdiction, Waiver of Jury
Trial; Etc. THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW. EACH OF THE PARTIES HERETO (OTHER THAN
THE DISBURSEMENT AGENT) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE PARTIES HERETO (OTHER THAN THE DISBURSEMENT AGENT)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF
THE PARTIES HERETO (OTHER THAN THE DISBURSEMENT AGENT) IRREVOCABLY CONSENTS, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH PARTY AT THE ADDRESS OF SUCH PARTY SET FORTH HEREIN,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE DISBURSEMENT AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE OTHER PARTIES HERETO IN ANY OTHER JURISDICTION.
SECTION 6.8 Certain Rights. None of the Disbursement Agent, TEC, the
Trustee and TransTexas shall have any rights with respect to the Disbursement
Account, except as specifically set forth in the TransTexas Loan Agreement, the
TransTexas Security Agreement and this Agreement. If at any time the
Disbursement Agent shall receive a notice, order or instruction from any
Person, which conflicts with a notice, order or instruction given by the
Trustee, the Trustee's notice, order or instruction shall always prevail. All
provisions of this Agreement are subject to the foregoing sentence.
SECTION 6.9 Confidentiality. The parties agree that they and their
employees have maintained and will maintain, in confidence, all data,
summaries, reports or information of all kinds, whether oral or written,
provided pursuant to this Agreement or acquired or developed in any manner from
any party's personnel or files (the "Confidential Information"), and that they
have not and will not reveal the same to any persons not employed by the party
from whom such information was obtained except: (a) at the written direction of
such party; (b) to the extent necessary to comply with the law, reporting
requirements imposed by the Securities and Exchange Commission or in connection
with any arbitration proceeding,
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or the valid order of a court of competent jurisdiction, in which event the
disclosing party shall so notify the party from whom such information was
obtained as promptly as practicable (and, if possible, prior to making any
disclosure) and shall seek confidential treatment of such information; (c) as
part of its normal reporting or review procedure to its parent company, its
auditors and its attorneys, and such parent company, auditors and attorneys
agree to be bound by the provisions of this Section; (d) in order to enforce
any of its rights pursuant to, or in any other dispute with respect to, this
Agreement; (e) if, at the time of disclosure to the recipient, the Confidential
Information is in the public domain; (f) if, after disclosure to the recipient,
the Confidential Information becomes part of the public domain by written
publication through no fault of the recipient; or (g) to any one or more
holders of Notes and their representatives and agents.
SECTION 6.10 Termination. This Agreement shall terminate automatically
thirty (30) days following disbursement of all funds remaining in the
Disbursement Account.
SECTION 6.11 Invalidity. If, for any reason whatsoever, any one or
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid in a particular case or in all cases, it
is the intent of the parties hereto that such circumstances shall not have the
effect of rendering any of the other provisions of this Agreement inoperative,
unenforceable or invalid, and the inoperative, unenforceable or invalid
provisions shall be construed as if it were written so as to effectuate to the
maximum extent possible, the intent of the parties hereto.
SECTION 6.12 Assignment. This Agreement is personal to the parties
hereto, and the rights and duties hereunder of any party hereto shall not be
assignable, except with the prior written consent of the other parties hereto
or as described in Section 2.3; provided, however, that the rights and
obligations of TEC hereunder may be assigned to the Trustee in accordance with
the provisions of the TEC Security Agreement. In any event, this Agreement
shall inure to and be binding upon the parties and their successors and
permitted assigns.
SECTION 6.13 Entire Agreement. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and commitments,
whether oral or written. This Agreement may only be amended as provided
herein.
SECTION 6.14 Captions. Captions in this Agreement are for convenience
only and shall not be considered or referenced in resolving questions of
interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
TRANSTEXAS GAS CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
TRANSAMERICAN ENERGY CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
FIRSTAR BANK OF MINNESOTA, N.A.,
as Disbursement Agent
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
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Exhibit A
[Form of TEC Certificate]
[Date]
Firstar Bank of Minnesota, N.A.,
as Disbursement Agent under the Disbursement
Agreement referenced below
Corporate Trust Department
101 East Fifth Street, 12th Floor
St. Paul, Minnesota 55101-1860
Attention: Frank Leslie
TransTexas Gas Corporation
1300 North Sam Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Attention: Ed Donahue
Ladies and Gentlemen:
We refer to (i) the Disbursement Agreement dated as of June 13,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Disbursement Agreement") among TransTexas Gas Corporation, a Delaware
corporation ("TransTexas"), TransAmerican Energy Corporation, a Delaware
corporation ("TEC"), Firstar Bank of Minnesota, N.A., as Trustee, and Firstar
Bank of Minnesota, N.A., as Disbursement Agent, and (ii) the Loan Agreement
dated as of June 13, 1997 (as amended, supplemented or otherwise modified from
time to time, the "TransTexas Loan Agreement") between TEC and TransTexas.
Capitalized terms used but not defined herein have the respective meanings
given to such terms in the Disbursement Agreement and the TransTexas Loan
Agreement.
TEC hereby requests that the Disbursement Agent disburse funds
from the Disbursement Account in an aggregate amount equal to $______________,
on ______________ (the "Date of Disbursement"). In connection with the
requested disbursement of funds, TEC hereby represents, warrants and certifies
that such funds will be applied promptly to the satisfaction of TransTexas's
obligations under the TransTexas Intercompany Loan Documents. Such
disbursement is to be made by liquidating investments in the Disbursement
Account and making payment to TEC in accordance with the following procedures
and instructions:
[Insert procedures and instructions]
TRANSAMERICAN ENERGY CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
A-1
17
Exhibit B
[Form of Disbursement Certificate]
DISBURSEMENT CERTIFICATE NO. ___
[Date]
Firstar Bank of Minnesota, N.A.,
as Disbursement Agent under the Disbursement
Agreement referenced below
Corporate Trust Department
101 East Fifth Street, 12th Floor
St. Paul, Minnesota 55101-1860
Attention: Frank Leslie
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Attention: Ed Donahue
Ladies and Gentlemen:
We refer to (i) the Disbursement Agreement dated as of June 13,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Disbursement Agreement") among TransTexas Gas Corporation, a Delaware
corporation ("TransTexas"), TransAmerican Energy Corporation, a Delaware
corporation ("TEC"), Firstar Bank of Minnesota, N.A., as Trustee, and Firstar
Bank of Minnesota, N.A., as Disbursement Agent, and (ii) the Loan Agreement
dated as of June 13, 1997 (as amended, supplemented or otherwise modified from
time to time, the "TransTexas Loan Agreement") between TEC and TransTexas.
Capitalized terms used but not defined herein have the respective meanings
given to such terms in the Disbursement Agreement and the TransTexas Loan
Agreement.
TransTexas hereby requests that the Disbursement Agent disburse,
funds from the Disbursement Account in an aggregate amount equal to
$__________, on ________ __, ____ (the "Date of Disbursement"). Such funds
will be used within five (5) business days solely in connection with the
TransTexas Dividend/Share Repurchase Program or redeposited into the
Disbursement Account.
The undersigned hereby certifies that all conditions to this
disbursement have been met in accordance with the terms of the Disbursement
Agreement.
TRANSTEXAS GAS CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
B-1