1
EXHIBIT 4.2
================================================================================
$475,000,000 11 1/2% Senior Secured Notes due 2002
and
$1,130,000,000 13% Senior Secured Discount Notes due 2002
INDENTURE
among
TRANSAMERICAN ENERGY CORPORATION,
as Issuer
and
Firstar Bank of Minnesota, N.A.,
as Trustee
Dated as of June 13, 1997
================================================================================
2
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 13.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.08; 13.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03(b)
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02; 7.02;
13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02; 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03(b); 12.04(b)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11; 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12; 6.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
- --------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
3
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Incorporation by Reference of TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 1.3 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE II THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.1 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.3 Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.4 Paying Agent to Hold Assets in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.5 Noteholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.6 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.7 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2.8 Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2.9 Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.10 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.13 Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 2.14 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE III REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.1 Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.2 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.3 Selection of Notes to Be Redeemed 49
Section 3.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.5 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.6 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.7 Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IV COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.1 Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.3 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.4 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.5 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.6 Maintenance of Properties and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.7 Compliance Certificate; Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.8 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.9 Limitation on Status as Investment Company or Public Utility Company . . . . . . . . . . . 55
Section 4.10 Limitation on Transactions with Related Persons . . . . . . . . . . . . . . . . . . . . . 55
i
4
Section 4.11 Limitation on Incurrences of Additional Debt and Issuances of Disqualified Capital
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.12 Limitations on Restricting Subsidiary Dividends . . . . . . . . . . . . . . . . . . . . . 66
Section 4.13 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 4.14 Limitation on Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 4.15 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 4.16 Guarantee by Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 4.17 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 4.18 Limitations on Line of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 4.19 Separate Existence and Formalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 4.20 Accounts Receivable Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 4.21 Excess Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 4.22 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 4.23 Limitation on Assets Held by Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 4.24 Additional Interest Excess Cash Offer . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE V SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 5.1 When the Company May Merge, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 5.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment . . . . . . . . . . . . . . . . . 80
Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . 81
Section 6.4 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 6.5 Trustee May Enforce Claims Without Possession of Notes . . . . . . . . . . . . . . . . . . 82
Section 6.6 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 6.7 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 6.8 Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . 83
Section 6.9 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 6.10 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 6.11 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 6.12 Waiver of Past Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 6.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 6.14 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE VII TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 7.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 7.2 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 7.3 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.6 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ii
5
Section 7.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 7.8 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 7.9 Successor Trustee by Merger, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 7.11 Preferential Collection of Claims against Company . . . . . . . . . . . . . . . . . . . . 89
Section 7.12 No Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 7.13 Condition to Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 7.14 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE VIII SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 8.1 Satisfaction, Discharge of the Indenture and Defeasance of the Notes . . . . . . . . . . . 90
Section 8.2 Termination of Obligations Upon Cancellation of the Notes . . . . . . . . . . . . . . . . 91
Section 8.3 Survival of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 8.4 Acknowledgment of Discharge by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 8.5 Application of Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 8.6 Repayment to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 8.7 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 9.1 Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . 93
Section 9.2 Amendments, Supplemental Indentures and Waivers with Consent of Holders . . . . . . . . . 92
Section 9.3 Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.4 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.5 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.6 Trustee to Sign Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE X MEETINGS OF NOTEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.1 Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.2 Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.3 Call of Meetings by Company or Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 10.4 Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights;
Adjournment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 10.6 Voting at the Meeting and Record to Be Kept . . . . . . . . . . . . . . . . . . . . . . . 97
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be Hindered or Delayed by
Call of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
ARTICLE XI RIGHT TO REQUIRE REPURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 11.1 Repurchase of Notes at Option of the Holder Upon Change of Control . . . . . . . . . . . . 98
iii
6
ARTICLE XII SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.2 Trustee's Execution of Intercreditor Agreements and Subordination Agreements . . . . . . 100
Section 12.3 Recording; Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.4 Disposition of Certain Collateral Without Requesting Release . . . . . . . . . . . . . . . 102
Section 12.5 Requesting Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 12.6 Substitute Collateral Other Than Cash Collateral . . . . . . . . . . . . . . . . . . . . . 105
Section 12.7 Substitution of Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 12.8 Release Upon Defeasance or Satisfaction and Discharge of this Indenture . . . . . . . . . 106
Section 12.9 Reliance on Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.10 Purchaser May Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.11 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.12 Trustee's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 12.13 Authorization of Actions to be Taken by the Trustee Under the Security Documents . . . . . 107
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.1 TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.3 Communications by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.4 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 109
Section 13.5 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.6 Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.7 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.9 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.10 No Recourse against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 13.12 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 13.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 13.14 Table of Contents, Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
EXHIBITS
Exhibit A - Form of Senior Secured Note
Exhibit B - Form of Senior Secured Discount Note
Exhibit C - Certificate of Transferor-Senior Secured Note
Exhibit D - Certificate of Transferor-Senior Secured Discount Note
Exhibit E - Form of TEC Security and Pledge Agreement
Exhibit F - Form of TEC Collateral Assignment Agreement
Exhibit G - Form of TARC Mortgage
Exhibit H - Form of TARC Security and Pledge Agreement
Exhibit I - Form of TARC Intercompany Loan
Exhibit J - Form of TransTexas Mortgage
Exhibit K - Form of TransTexas Security and Pledge Agreement
Exhibit L - Form of TransTexas Intercompany Loan
Exhibit M - Form of TARC Intercreditor Agreement
Exhibit N - Form of TransTexas Intercreditor Agreement
Exhibit O - Form of TransTexas Disbursement Agreement
Exhibit P - Form of TARC/TEC Disbursement Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of this Indenture.
iv
7
INDENTURE, dated as of June 13, 1997, among TRANSAMERICAN ENERGY
CORPORATION, a Delaware corporation (the "Company"), and Firstar Bank of
Minnesota, N.A., as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 11
1/2% Senior Secured Notes due 2002 and 13% Senior Secured Discount Notes due
2002:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1 Definitions.
"Accounts Receivable Subsidiary" means a subsidiary of the Company
designated as an Accounts Receivable Subsidiary for the purpose of financing
the accounts receivable of TARC.
"Accounts Receivable Subsidiary Notes" means the notes to be issued by
the Accounts Receivable Subsidiary for the purchase of accounts receivable.
"Accreted Value" of a Senior Secured Discount Note, with respect to
each $1,000 principal amount of Senior Secured Discount Notes, is defined as of
any Semi-Annual Accretion Date set forth below as the Accreted Value thereof
set forth below and as of any other date as the Accreted Value set forth below
for the immediately preceding Semi-Annual Accretion Date plus the Proportionate
Amount to such date:
ACCRETED VALUE (PER $1,000
SEMI-ANNUAL ACCRETION DATE PRINCIPAL AMOUNT)
- -------------------------- --------------------------
December 15, 1997 . . . . . . . . . . . . . . . $ 827.849
June 15, 1998 . . . . . . . . . . . . . . . . . 881.659
December 15, 1998 . . . . . . . . . . . . . . . 938.967
June 15, 1999 and thereafter . . . . . . . . . 1,000.000
The Accreted Value prior to the first Semi-Annual Accretion Date will
be the sum of $776.779 and the Proportionate Amount. "Proportionate Amount,"
with respect to a Senior Secured Discount Note
8
as of any date, is defined as an amount equal to the product of (i) the
Accreted Value for the immediately following Semi-Annual Accretion Date less
the Accreted Value for the immediately preceding Semi-Annual Accretion Date
(or, with respect to the period before the first Semi-Annual Accretion Date,
less $776.779) multiplied by (ii) a fraction, the numerator of which is the
actual number of days elapsed from the immediately preceding Semi-Annual
Accretion Date (or, with respect to the period before the first Semi-Annual
Accretion Date, the Issue Date) to the date for which the Proportionate Amount
is being determined and the denominator of which is the actual number of days
from the date of the immediately preceding Semi-Annual Accretion Date to and
including the immediately following Semi-Annual Accretion Date or the actual
number of days from the Issue Date to the first Semi-Annual Accretion Date, as
the case may be.
"Additional Interest Accumulated Amount" shall have the meaning
specified in Section 4.24.
"Additional Interest Excess Cash" means the cash received by the
Company from (i) the TARC Interest Increase and (ii) the TransTexas Interest
Increase.
"Additional Interest Excess Cash Acceptance Amount" shall have the
meaning specified in Section 4.24.
"Additional Interest Excess Cash Offer" shall have the meaning
specified in Section 4.24.
"Additional Interest Excess Cash Offer Amount" shall have the meaning
specified in Section 4.24.
"Additional Interest Excess Cash Offer Price" shall have the meaning
specified in Section 4.24.
"Additional Interest Excess Cash Purchase Date" shall have the meaning
specified in Section 4.24.
"Additional Interest Final Put Date" shall have the meaning specified
in Section 4.24.
"Adjusted Consolidated Net Income" of any Person for any period means
the net income (loss) of such Person and its consolidated Subsidiaries for such
period, determined in accordance with GAAP, excluding (without duplication) (i)
all extraordinary gains, (ii) the net income, if positive, of any other Person,
other than a consolidated Subsidiary, in which such Person or any of its
consolidated Subsidiaries has an interest, except to the extent of the amount
of any dividends or distributions actually paid in cash to such Person or a
consolidated Subsidiary of such Person during such period, (iii) the net
income, if positive, of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition and (iv) the
net income, if positive, of any Subsidiary of such Person to the extent that
the declaration or payment of dividends or similar distributions is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule, or governmental regulation
applicable to such Subsidiary.
"Adjusted Consolidated Tangible Assets" means (without duplication),
as of the date of determination, (A) the sum of (i) discounted future net cash
flows from proved oil and gas reserves of the TransTexas Entities, calculated
in accordance with SEC guidelines (before any state or federal income tax), as
estimated in a Reserve Report as of a date no earlier than TransTexas' most
recent fiscal year end (or, if such reserve report is unavailable, or if the
date of determination is after the end of the first fiscal quarter of the then
current fiscal year of TransTexas, as estimated by TransTexas engineers on the
same basis as of a date no earlier than the end of the most recent fiscal
quarter, which estimates shall be confirmed in
2
9
writing by a report by nationally recognized independent petroleum engineers in
accordance with SEC guidelines in the event of a Material Change), (ii) the Net
Working Capital of TransTexas on a date no earlier than the date of TransTexas'
latest consolidated annual or quarterly financial statements and (iii) with
respect to all other tangible assets (which are deemed to include mineral
lease-hold interests) of the TransTexas Entities, the greater of (a) the net
book value of such other tangible assets on a date no earlier than the date of
TransTexas' latest consolidated annual or quarterly financial statements, and
(b) the Appraised Value, as estimated by an Appraiser of such other tangible
assets, as of a date no earlier than the date that is three years prior to the
date of determination (or such later date on which TransTexas shall have a
reasonable basis to believe that there has occurred a material decrease in
value since the determination of such appraised value), minus (B) minority
interests and, to the extent not otherwise taken into account in determining
Adjusted Consolidated Tangible Assets, any gas balancing liabilities of the
TransTexas Entities. In addition to, but without duplication of, the foregoing,
for purposes of this definition, "Adjusted Consolidated Tangible Assets" shall
be calculated after giving effect, on a pro forma basis, to (1) any Permitted
Investment, to and including the date of the transaction giving rise to the
need to calculate Adjusted Consolidated Tangible Assets (the "Assets
Transaction Date"), in any other Person that, as a result of such investment,
becomes a Subsidiary of TransTexas, (2) the acquisition, to and including the
Assets Transaction Date (by merger, consolidation, or purchase of stock or
assets), of any business or assets, including, without limitation, Permitted
Investments, (3) any sales or other dispositions of assets (other than sales of
Hydrocarbons or other mineral products in the ordinary course of business)
occurring on or prior to the Assets Transaction Date and (4) the TTXD Spin-off
if the TTXD Spin-off has occurred. For purposes of calculating the ratio of
TransTexas' Adjusted Consolidated Tangible Assets to total consolidated Debt of
the TransTexas Entities, Debt of a Subsidiary that is not a wholly owned
Subsidiary of TransTexas (which Debt is non-recourse to TransTexas or any of
its other Subsidiaries or any of their assets) shall be included only to the
extent of TransTexas' pro rata ownership interest in such Subsidiary.
"Adjusted Net Assets" of a Guarantor means the lesser of (a) the
amount by which the Guarantor's property, at a fair valuation, exceeds the sum
of its debts (including unliquidated or contingent debts), (b) the amount by
which the present fair salable value of the Guarantor's assets exceeds the
amount that will be required to pay its probable liability on its existing
debts as they become absolute and matured, (c) the amount by which the
Guarantor's assets exceed the maximum amount that would constitute unreasonably
small capital for its business or (d) the amount by which the Guarantor's
assets exceed the amount that such Guarantor should reasonably retain to pay
its debts (including unliquidated or contingent debts) as they mature.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person or (ii) any officer,
director or controlling shareholder of such other Person. For purposes of this
definition, the term "control" means (a) the power to direct the management and
policies of a Person, directly or through one or more intermediaries, whether
through the ownership of voting securities, by contract, or otherwise, or (b)
without limiting the foregoing, the beneficial ownership of 5% or more of the
voting power of the voting common equity of such Person (on a fully diluted
basis) or of warrants or other rights to acquire such equity (regardless of
whether presently exercisable).
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Alkylation Unit" means the alkylation unit being constructed as part
of the Capital Improvement Program.
3
10
"Appraisal" means, when used with respect to the valuation of any
property, an appraisal prepared by an Appraiser as to the Appraised Value of
such property.
"Appraised Value" means, with respect to any property at any date, the
then current fair market value of such property as set forth in the most recent
Appraisal.
"Appraiser" means an independent appraiser of national recognition
qualified to appraise the property appraised.
"Asset Sale" means any direct or indirect conveyance, sale, transfer
or other disposition (including through damage or destruction for which
Insurance Proceeds are paid or by condemnation), in one transaction or a series
of related transactions, of any of the properties, businesses or assets of the
Company or any Subsidiary of the Company, whether owned on the Issue Date or
thereafter acquired; provided, however, that "Asset Sale" shall not include
(i) any disposition of property that is not Collateral, (ii) any pledge or
disposition of assets (if such pledge or disposition would otherwise constitute
an Asset Sale) to the extent and only to the extent that it results in the
creation of a Permitted Lien (other than the creation of a Permitted Lien in
connection with a Dollar-Denominated Production Payment that TransTexas or any
of its Subsidiaries does not elect to treat as Debt or in connection with a
Volumetric Production Payment, which in either case shall be treated as an
Asset Sale hereunder; provided, however, that a contribution of a Dollar
Denominated Production Payment to a Hedging Subsidiary shall not constitute an
Asset Sale) or (iii) conveyances, sales, transfers or other dispositions in
connection with a Drilling Program.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP
or, in the event that such rate of interest is not reasonably determinable,
discounted at the rate of interest borne by the Senior Secured Notes) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means a day that is not a Legal Holiday.
"Capital Expenditures" of a Person means expenditures (whether paid in
cash or accrued as a liability) by such Person or any of its Subsidiaries that,
in conformity with GAAP, are or would be included in "capital expenditures,"
"additions to property, plant, or equipment" or comparable items in the
consolidated financial statements of such Person consistent with prior
accounting practices.
4
11
"Capital Expenditures Testing Quarter" means any fiscal quarter
immediately following a Measurement Quarter in which Measurement Quarter the
SEC PV10 of TransTexas (based on TransTexas' then most recent Reserve Report)
is less than 90% of the Net Debt of TransTexas, measured as of the last day of
such Measurement Quarter.
"Capital Improvement Program" means the expansion and improvement
program at TARC that will be executed in two phases: Phase I and Phase II.
The most significant projects include: (i) conversion of the visbreaker unit
to a delayed coking unit to process vacuum tower bottoms into lighter petroleum
products, (ii) modernization and upgrade of a fluid catalytic cracking unit to
increase gasoline production capacity and allow the direct processing of low
cost atmospheric residual feedstocks and (iii) upgrading and expanding
hydrotreating, alkylation and sulfur recovery units to increase sour crude
processing capacity.
"Capital Stock" means, with respect to any Person, any capital stock
of such Person and shares, interests, participations, or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into corporate stock), warrants or options to purchase
any of the foregoing, including without limitation, each class of common stock
and preferred stock of such Person, if such Person is a corporation, and each
general or limited partnership interest or other equity interest of such
Person, if such Person is a partnership.
"Capitalized Lease Obligation" means obligations under a lease that
are required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Debt represented by such obligations shall be the
capitalized amount of such obligations, as determined in accordance with GAAP.
"cash" means U.S. Legal Tender.
"Cash Equivalents" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (c) certificates of deposit
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year, and overnight bank
deposits, in each case, with any Eligible Institution, (d) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) entered into with any Eligible
Institution, (e) commercial paper rated "P-1," "A-1" or the equivalent thereof
by Moody's Investors Service, Inc. or Standard & Poor's Corporation, Inc.,
respectively, and in each case maturing within one year after the date of
acquisition, (f) shares of money market funds, including those of the Trustee,
that invest solely in United States dollars and securities of the types
described in clauses (a) through (e), (g) demand and time deposits and
certificates of deposit with any commercial bank organized in the United States
not meeting the qualifications specified in clause (c) above or an Eligible
Institution, provided that such deposits and certificates support bonds,
letters of credit and other similar types of obligations incurred in the
ordinary course of business, (h) deposits, including deposits denominated in
foreign currency, with any Eligible Institution; provided that all such
deposits do not exceed $10,000,000 in the aggregate at any one time, and (i)
demand or fully insured time deposits used in the ordinary course of business
with commercial banks insured by the Federal Deposit Insurance Corporation.
"CATOFIN(R) Unit" means certain real property currently owned by TARC
as more specifically defined in the TARC Mortgage, together with all personal
property of TARC now or hereinafter located on such real property but only to
the extent that such property is part of a refining unit designed to produce
propane and butane mono-olefins using the CATOFIN(R) process.
5
12
"Change of Control" means (i) the liquidation or dissolution of, or
the adoption of a plan of liquidation by, the Company, (ii) any transaction,
event or circumstance pursuant to which any "person" or "group" (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether
or not applicable), other than John R. Stanley (or his heirs, his estate or
any trust in which he or his immediate family members have, directly or
indirectly, a beneficial interest in excess of 50%) and his Subsidiaries or the
Trustee, is or becomes the "beneficial owner" (as that term is used in Rules
13d-3 and 13d-5 under the Exchange Act, whether or not applicable), directly or
indirectly, of more than 50% of the total voting power of the Company's then
outstanding Voting Stock or (iii) any event which results in the Company or any
of its Subsidiaries having beneficial ownership of at least some of TARC or
TransTexas Capital Stock, respectively, but less than 50%, on a fully diluted
basis, of (x) the total voting power of TARC's or TransTexas' then outstanding
Voting Stock, respectively, or (y) the economic value of the outstanding
Capital Stock of TARC or TransTexas, respectively; unless, at the time of the
occurrence of an event specified in clause (ii) or (iii), the Notes have an
Investment Grade Rating; provided, however, that if at any time within 120
days after such occurrence, the Notes cease having an Investment Grade Rating,
such event shall be a "Change of Control."
"Collateral" shall mean the TARC Collateral and the TransTexas
Collateral as well as all of the Company's ownership interest in the Capital
Stock of TARC and TransTexas and any future Subsidiaries of the Company and all
of the Company's rights under the TARC Intercompany Loan and the TransTexas
Intercompany Loan and the assets of the Company which are pledged to the
Trustee in accordance with the TransAmerican Energy Corporation Pledge and
Security Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body
performing such duties at such time.
"Common Stock" means the Company's common stock, $0.01 par value.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA" of any Person for any period, unless otherwise
defined herein, means (a) the Consolidated Net Income of such Person for such
period, plus (b) the sum, without duplication (and only to the extent such
amounts are deducted from net revenues in determining such Consolidated Net
Income), of (i) the provision for income taxes for such period for such Person
and its consolidated Subsidiaries, (ii) depreciation, depletion, and
amortization of such Person and its consolidated Subsidiaries for such period
and (iii) Consolidated Fixed Charges of such Person for such period,
determined, in each case, on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" on any date (the
"Transaction Date") means, with respect to any Person, the ratio, on a pro
forma basis, of (i) the aggregate amount of Consolidated EBITDA of such Person
(attributable to continuing operations and businesses and exclusive of the
amounts attributable to operations and businesses discontinued or disposed of,
on a pro forma basis as if such operations and businesses were discontinued or
disposed of on the first day of the Reference Period) for the Reference Period
to (ii) the aggregate Consolidated Fixed Charges of such Person (exclusive of
amounts attributable to discontinued operations and businesses on a pro forma
basis as if such operations and businesses were discontinued or disposed of on
the first day of the Reference Period, but only to the extent
6
13
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such Person's Consolidated Fixed Charges
subsequent to the Transaction Date) during the Reference Period; provided, that
for purposes of such computation, in calculating Consolidated EBITDA and
Consolidated Fixed Charges, (a) the transaction giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio shall be assumed to have
occurred on the first day of the Reference Period, (b) the incurrence of any
Debt or issuance of Disqualified Capital Stock or the retirement of any Debt or
Capital Stock during the Reference Period or subsequent thereto and on or prior
to the Transaction Date shall be assumed to have occurred on the first day of
such Reference Period, (c) Consolidated Interest Expense attributable to any
Debt (whether existing or being incurred) bearing a floating interest rate
shall be computed as if the rate in effect on the Transaction Date had been the
applicable rate for the entire period, unless such Person or any of its
Subsidiaries is a party to a Swap Obligation (that remains in effect for the
12-month period after the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used, and (d) Consolidated EBITDA and Consolidated
Fixed Charges of any Person shall be calculated by giving pro forma effect to
the TTXD Spin-off and each other transaction described in the Offering Circular
under the heading "Offering Circular Summary -- The Transactions" as if such
transactions had occurred on the first day of the Reference Period, in each
case, other than the TTXD Spin-off, only if such transaction has occurred
during the Reference Period.
"Consolidated Fixed Charges" of any Person for any period means
(without duplication) the sum of (i) Consolidated Interest Expense of such
Person for such period, (ii) dividend requirements of such Person and its
consolidated Subsidiaries (whether in cash or otherwise (except dividends
payable solely in shares of Qualified Capital Stock)) with respect to Preferred
Stock paid, accrued, or scheduled to be paid or accrued during such period, in
each case to the extent attributable to such period and excluding items
eliminated in consolidation and (iii) fees paid, accrued, or scheduled to be
paid or accrued during such period by such Person and its Subsidiaries in
respect of performance bonds or other guarantees of payment. For purposes of
clause (ii) above, dividend requirements shall be increased to an amount
representing the pre-tax earnings that would be required to cover such dividend
requirements; accordingly, the increased amount shall be equal to a fraction,
the numerator of which is such dividend requirements and the denominator of
which is 1 minus the applicable actual combined effective Federal, state,
local, and foreign income tax rate of such Person and its subsidiaries
(expressed as a decimal), on a consolidated basis, for the fiscal year
immediately preceding the date of the transaction giving rise to the need to
calculate Consolidated Fixed Charges.
"Consolidated Interest Expense" of any Person means, for any period,
the aggregate interest (without duplication), whether expensed or capitalized,
paid, accrued, or scheduled to be paid or accrued during such period in respect
of all Debt of such Person and its consolidated Subsidiaries (including (i)
amortization of deferred financing costs and original issue discount and
non-cash interest payments or accruals, (ii) the interest portion of all
deferred payment obligations, calculated in accordance with the effective
interest method and (iii) all commissions, discounts, other fees, and charges
owed with respect to letters of credit and banker's acceptance financing and
costs associated with Swap Obligations, in each case to the extent attributable
to such period but excluding any interest accrued on intercompany payables for
taxes to the extent the liability for such taxes has been assumed by
TransAmerican pursuant to the Tax Allocation Agreement) determined on a
consolidated basis in accordance with GAAP. For purposes of this definition,
(x) interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board), and (y) Consolidated Interest Expense attributable to any Debt
represented by the
7
14
guarantee by such Person or a Subsidiary of such Person other than with respect
to Debt of such Person or a Subsidiary of such Person shall be deemed to be the
interest expense attributable to the item guaranteed.
"Consolidated Net Income" of any Person for any period means the net
income (loss) of such Person and its consolidated Subsidiaries for such period,
determined in accordance with GAAP, excluding (without duplication) (i) all
extraordinary, unusual and nonrecurring gains, (ii) the net income, if
positive, of any other Person, other than a consolidated Subsidiary, in which
such Person or any of its consolidated Subsidiaries has an interest, except to
the extent of the amount of any dividends or distributions actually paid in
cash to such Person or a consolidated Subsidiary of such Person during such
period, but not in excess of such Person's pro rata share of such other
Person's aggregate net income earned during such period or earned during the
immediately preceding period and not distributed during such period, (iii) the
net income, if positive, of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition and (iv) the
net income, if positive, of any Subsidiary of such Person to the extent that
the declaration or payment of dividends or similar distributions is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule, or governmental regulation
applicable to such Subsidiary.
"Construction Supervisor" means Baker & O'Brien, Inc., as construction
supervisor of the Capital Improvement Program or any successor construction
supervisor appointed pursuant to the Disbursement Agreement.
"Continuing Operations" means the operations of the TransTexas
Entities after giving effect to the sale by TransTexas of the stock of
TransTexas Transmission Corporation.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt" means, with respect to any Person, without duplication (i) all
liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (b) evidenced by bonds, notes,
debentures, or similar instruments or letters of credit or representing the
balance deferred and unpaid of the purchase price of any property acquired by
such Person or services received by such Person (other than long-term service
or supply contracts which require minimum periodic payments), (c) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks or Swap
Obligations, (d) for the payment of money relating to a Capitalized Lease
Obligation, (e) the Attributable Debt associated with any Sale and Leaseback
Transaction or (f) Dollar-Denominated Production Payments that TransTexas or
any of its Subsidiaries elect to treat as Debt (excluding all other Permitted
Production Payment Obligations); (ii) reimbursement obligations of such Person
with respect to letters of credit; (iii) all liabilities of others of the kind
described in the preceding clause (i) or (ii) that such Person has guaranteed
or that is otherwise its legal liability (to the extent of such guaranty or
other legal liability) other than for endorsements, with recourse, of
negotiable instruments in the ordinary course of business; (iv) all obligations
secured by a Lien (other than Permitted Liens, except to the extent the
obligations secured by such Permitted Liens are otherwise included in clause
(i), (ii) or (iii) of this definition and are obligations of such Person) to
which the property or assets (including, without limitation, leasehold
interests and any other tangible or intangible property rights) of such Person
are subject, regardless of whether the obligations secured thereby shall have
been assumed by or shall otherwise be such Person's legal liability (but, if
such obligations are not assumed by such Person or are not otherwise such
Person's legal liability, the amount of such Debt shall be deemed
8
15
to be limited to the fair market value of such property or assets determined as
of the end of the preceding fiscal quarter); and (v) any and all deferrals,
renewals, extensions, refinancings, and refundings (whether direct or indirect)
of, or amendments, modifications, or supplements to, any liability of the kind
described in any of the preceding clauses (i) through (iv) regardless of
whether between or among the same parties.
"Default" means an event or condition, the occurrence of which is, or
with the lapse of time or giving of notice or both would be, an Event of
Default.
"Definitive Notes" means, collectively, the Definitive Senior Secured
Notes and the Definitive Senior Secured Discount Notes.
"Definitive Senior Secured Discount Notes" means Senior Secured
Discount Notes that are in the form of the Notes attached hereto as Exhibit B,
and that do not include the information called for by footnotes 1 and 2
thereof.
"Definitive Senior Secured Notes" means Senior Secured Notes that are
in the form of the Notes attached hereto as Exhibit A, and that do not include
the information called for by footnotes 1 and 2 thereof.
"Delayed Coking Unit" means the delayed coking unit being constructed
as part of the Capital Improvement Program.
"Depository" means the Person specified in Section 2.3 hereof as the
Depository with respect to the Notes issuable in global form, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"Disbursement Agreement" means the Disbursement Agreement, among TARC,
the Company, the disbursement agent named therein and the Construction
Supervisor, as amended pursuant to the terms thereof.
"Disqualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person or its subsidiaries that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased by such Person or its subsidiaries, including at the
option of the holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due, on or
prior to June 15, 2002.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Drilling Program" means any arrangement between TransTexas or any
Subsidiary of TransTexas and another Person pursuant to which (i) such Person
agrees (x) to drill, complete or perform operations to enhance recovery from, a
well or wells on mineral interests owned by TransTexas or such Subsidiary or
(y) to pay to TransTexas or such Subsidiary all or a portion of the costs paid
or incurred in connection with drilling, completing or performing such other
operations (or to reimburse TransTexas or such Subsidiary for such costs within
6 months of the incurrence thereof) and (ii) TransTexas or such Subsidiary
9
16
agrees to convey or assign to such person an interest in such well or wells in
accordance with clause (l) of the definition of "Permitted TransTexas Liens."
"DTC" means The Depository Trust Company.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500,000,000 and that is rated
"A" (or higher) according to Moody's Investors Service, Inc. or Standard &
Poor's Corporation, Inc. at the time as of which any investment or rollover
therein is made.
"Equipment" means and includes, as to (i) TransTexas or any of its
Subsidiaries, all of such Person's now owned or hereafter acquired Vehicles,
drilling rigs, workover rigs, fracture stimulation equipment, well site
compressors, rolling stock and related equipment and other assets accounted for
as equipment by such Person on its financial statements, all proceeds thereof,
and all documents of title, books, records, ledger cards, files,
correspondence, and computer files, tapes, disks and related data processing
software that at any time evidence or contain information relating to the
foregoing; provided, however, that "Equipment" shall not include any assets
constituting part of a natural gas pipeline or the compression or dehydration
equipment used in the operation of any such pipeline and (ii) TARC or any of
its Subsidiaries, all of such Person's now owned or hereafter acquired
Vehicles, rolling stock and related equipment and other assets accounted for as
equipment by such Person in its financial statements, all proceeds thereof, and
all documents of title, books, records, ledger cards, files, correspondence and
computer files, tapes, disks and related data processing software that at any
time evidence or contain information relating to the foregoing; provided,
however, that "Equipment" shall not include any assets constituting part of
TARC's refinery or fixed assets used in TARC's processing or storage
operations.
"Equity Offering" of any Person means any Public Equity Offering or
any private placement of any Capital Stock of such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Event of Default" shall have the meaning specified in Section 6.1.
"Excess Cash" means the Net Cash Proceeds received by the Company from
Asset Sales by the Company and the aggregate amount of cash and Cash
Equivalents received by the Company from its Subsidiaries, including from
dividends or payments in respect of Intercompany Loan Redemptions less the sum
(without duplication) of (a) the provision for income and other taxes of the
Company or, in the case of subclause (iii) of this clause (a), TransAmerican,
(i) for the current fiscal year, (ii) for the immediately preceding fiscal year
or (iii) relating to the sale by TransTexas of the Capital Stock of TransTexas
Transmission Corporation, (b) without duplication, amounts received pursuant to
the Services Agreement, (c) amounts used to pay consent fees in connection with
a solicitation of waivers or amendments to the Notes, (d) dividends received
from an Accounts Receivable Subsidiary; provided, that such funds are then
contributed to TARC, (e) payments of interest and principal on loans by the
Company to TARC or TransTexas which loans are permitted by the terms of the
Indenture and (f) scheduled payments of interest and principal pursuant to the
terms of the Intercompany Loans.
"Excess Cash Acceptance Amount" shall have the meaning given to it in
Section 4.21.
10
17
"Excess Cash Offer" shall have the meaning given to it in Section
4.21.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Assets" means assets acquired by TARC or TransTexas or any
Subsidiary of either of them in exchange for assets of TARC or TransTexas or
such Subsidiary, respectively, in connection with an Asset Sale, which acquired
assets in the case of exchanges of assets by TransTexas or any of its
Subsidiaries include proved reserves with a value that, together with the cash
or Cash Equivalents received therefor by TransTexas or any of its Subsidiaries,
is equal to or greater than the value of the proved reserves included in the
assets disposed of by TransTexas or such Subsidiary in connection with such
Asset Sale; provided, that during any fiscal year TransTexas or any of its
Subsidiaries can collectively acquire assets (other than proved reserves, cash
or Cash Equivalents) with a fair market value of up to $40,000,000 in exchange
for assets of TransTexas or such Subsidiaries with proved reserves, and such
assets acquired by TransTexas or such Subsidiaries shall constitute "Exchange
Assets" hereunder.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Senior
Secured Notes for Series A Senior Secured Notes and Series B Senior Secured
Discount Notes for Series A Senior Secured Discount Notes.
"FCC Unit" means the fluid catalytic cracking unit being constructed
and upgraded as part of the Capital Improvement Program.
"First Lien Debt" means any Debt or other obligation secured by a
Permitted TransTexas Lien described in clause (c), (d), (e), (f), (i), (k),
(l), (o), (q), (r) to the extent that the Incurrence of the Permitted Lien to
which such clause relates is one of the other clauses listed here, (s) or (t)
of the definition of "Permitted TransTexas Liens," a Permitted TARC Lien
described in clause (c), (d), (g), (j), (k), (m), (o), (p), (q), (r) to the
extent that the Incurrence of the Permitted Lien to which such clause relates
is one of the other clauses listed here, (s), (t) and (y) of the definition of
"Permitted TARC Liens," or a Permitted TEC Lien described under clause (g) of
Permitted TEC Liens including, in each case, any refinancings thereof.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Issue Date applied on a basis consistent with that
used in the preparation of the audited financial statements of the Company
included in the Offering Circular.
"Gas Purchase Agreement" means the Interruptible Gas Sales Terms and
Conditions between TARC and TransTexas, as in effect on the Issue Date and as
amended from time to time, provided that any such amendment is not adverse to
the holders of the Notes in any material respect.
"Global Notes", means, collectively, the Global Senior Secured Note
and the Global Senior Secured Discount Note.
"Global Senior Secured Discount Note" means a Senior Secured Discount
Note in the form of the Note attached hereto as Exhibit B and that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2.
11
18
"Global Senior Secured Note" means a Senior Secured Note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 in the form of the Note attached hereto as Exhibit A.
"Guarantee" means any guarantee of the obligations of TARC under the
TARC Intercompany Loan or of TransTexas under the TransTexas Intercompany Loan
by any Guarantor.
"Guarantor" means each of TARC's or TransTexas' Subsidiaries that
becomes a guarantor of either the TARC Intercompany Loan or the TransTexas
Intercompany Loan in compliance with the provisions of this Indenture.
"HDS Unit" means the hydrodesulfurization unit being constructed as
part of the Capital Improvement Program.
"Hedging Subsidiary" means a Subsidiary of TransTexas engaged solely
in the business of facilitating Permitted Hedging Transactions with TransTexas
or any of its Subsidiaries.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Hydrocarbons" means oil, natural gas, condensate, and natural gas
liquids.
"Incur" shall have the meaning specified in Section 4.11.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Director" means an individual that is not and has not
been affiliated (other than as a director of TransAmerican or its past or
present subsidiaries) with, and is not and has not been a Related Person (other
than solely as a director of TransAmerican or one of its past or present
subsidiaries) with respect to John R. Stanley, TransAmerican or the Company or
its Subsidiaries.
"Insurance Proceeds" means the interest in and to all proceeds (net of
costs of collection, including attorney's fees) which now or hereafter may be
paid under any insurance policies now or hereafter obtained by or on behalf of
the Company, TARC, TransTexas, or any Guarantor in connection with any assets
thereof, together with interest payable thereon and the right to collect and
receive the same, including, without limitation, proceeds of casualty
insurance, title insurance, business interruption insurance and any other
insurance now or hereafter maintained with respect to such assets.
"Intercompany Loans" means the TransTexas Intercompany Loan and the
TARC Intercompany Loan.
"Intercompany Loan Redemption" means an optional redemption by TARC or
TransTexas of all or a portion of the accreted value or principal amount, as
the case may be, then outstanding under the TARC Intercompany Loan or the
TransTexas Intercompany Loan, respectively, in cash at a redemption price equal
to (a) 105% of the accreted value of the TARC Intercompany Loan and the
principal amount of the TransTexas Intercompany Loan for redemptions made on or
prior to December 31, 1997, (b) 108% of the accreted value of the TARC
Intercompany Loan and the principal amount of the TransTexas Intercompany Loan
for redemptions made during the period from January 1, 1998 through June 14,
2000,
12
19
(c) at a price equal to 105.750% of the accreted value of the TARC Intercompany
Loan and the principal amount of the TransTexas Intercompany Loan for
redemptions made during the period from June 15, 2000 through June 14, 2001 and
(d) 100.000% of the accreted value of the TARC Intercompany Loan and the
principal amount of the TransTexas Intercompany Loan for redemptions made on or
after June 15, 2001, in each case, plus accrued and unpaid interest, if any, to
and including the redemption date.
"Intercreditor Agreements" means the TARC Intercreditor Agreement and
the TransTexas Intercreditor Agreement.
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"Interest Rate or Currency Agreement" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates.
"Inventory" means and includes, (i) as to TransTexas, all of
TransTexas' now owned or hereafter acquired casing, drill pipe and other
supplies accounted for as inventory by TransTexas on its financial statements
(excluding any Hydrocarbons), all proceeds thereof, and all documents of title,
books, records, ledger cards, files, correspondence, and computer files,
tapes, disks and related data processing software that at any time evidence or
contain information relating to the foregoing and (ii) as to TARC, feedstocks,
refined products, chemicals and catalysts, other supplies and storeroom items
and similar items accounted for as inventory by TARC on its financial
statements, all proceeds thereof, and all documents of title, books, records,
ledger cards, files, correspondence, and computer files, tapes, disks and
related data processing software that at any time evidence or contain
information relating to the foregoing.
"Investment" by any Person in any other Person means (a) the
acquisition (whether for cash, property, services, securities or otherwise) of
capital stock, bonds, notes, debentures, partnership, or other ownership
interests or other securities of such other Person or any agreement to make any
such acquisition; (b) the making by such Person of any deposit with, or
advance, loan or other extension of credit to, such other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
Person) and (without duplication) any amount committed to be advanced, loaned
or extended to such other Person; (c) the entering into of any guarantee of, or
other contingent obligation with respect to, Debt or other liability of such
other Person; (d) the entering into of any Swap Obligation with such other
Person; or (e) the making of any capital contribution by such Person to such
other Person.
"Investment Grade Rating" means, with respect to any Person or issue
of debt securities or preferred stock, a rating in one of the four highest
letter rating categories (without regard to "+" or "-" other modifiers) by any
rating agency or if any such rating agency has ceased using letter rating
categories or if the four highest of such letter rating categories are not
considered to represent "investment grade" ratings, then the comparable
"investment grade" ratings (as designated by any such rating agency).
"Issue Date" means the date of first issuance of the Notes under this
Indenture.
"Legal Holiday" shall have the meaning provided in Section 13.7.
13
20
"Lobo Sale" shall have the meaning given to it in the Offering
Circular.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, regardless of whether filed, recorded, or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Liquidated Damages" has the meaning provided in the Registration
Rights Agreement relating to the Notes.
"Material Change" means an increase or decrease of more than 10% since
the then most recent Reserve Report in the discounted future net cash flows
(excluding changes that result from changes in prices) from proved oil and gas
reserves of TransTexas and its consolidated Subsidiaries (before any state or
federal income tax); provided, however, that the following will be excluded
from the Material Change calculation: (i) any acquisitions since the then most
recent Reserve Report of oil and gas reserves that have been estimated by
independent petroleum engineers and on which a report or reports have been
prepared by such independent petroleum engineers within 12 months of the
acquisition, (ii) any reserves added since the then most recent Reserve Report
attributable to the drilling or recompletion of wells not included in previous
reserve estimates and (iii) any disposition of properties existing on the date
of then most recent Reserve Report that have been disposed of.
"Maturity Date," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity, Change of Control Payment Date,
Purchase Date or by declaration of acceleration, call for redemption or
otherwise.
"Measurement Quarter" means any fiscal quarter ending on or after April
30, 1998.
"Mechanical Completion" means with respect to the Capital Improvement
Program, Phase I, Phase II or any specified unit or component thereof,
sufficient completion of the construction of the Capital Improvement Program,
Phase I, Phase II or any specified unit or component, as the case may be, in
accordance with the Plans, so that the Capital Improvement Program, Phase I,
Phase II or such unit or component, as the case may be, can be operated for its
intended purpose.
"Naphtha Pretreater" means the naphtha pretreater being constructed as
part of the Capital Improvement Program.
"Net Cash Proceeds" means an amount equal to the aggregate amount of
cash received by the Company and its Subsidiaries in respect of an Asset Sale
or a Non-Collateral Asset Sale, less the sum of (i) all reasonable out-of-
pocket fees, commissions, and other expenses incurred in connection with such
Asset Sale or Non-Collateral Asset Sale, as the case may be, including the
amount (estimated in good faith by the Company) of income, franchise, sales and
other applicable taxes to be paid, payable or accrued by the Company or any
Subsidiary of the Company (in each case as estimated in good faith by the
Company or such Subsidiary without giving effect to tax attributes unrelated to
such Asset Sale) in connection with such Asset Sale or Non-Collateral Asset
Sale, as the case may be, and (ii) the aggregate amount of cash so received
which is used to retire any then existing Debt of the Company or its
Subsidiaries (other than the Intercompany Loans or the Notes), as the case may
be, which is required by the terms of such Debt to be repaid in connection with
such Asset Sale or Non-Collateral Asset Sale, as the case may be.
14
21
"Net Debt" of a Person means such Person's outstanding Debt to the
extent recorded in accordance with GAAP, less cash and Cash Equivalents of such
Person, in each case as measured on a consolidated basis and as of the last day
of the measuring period.
"Net Proceeds" means (a) in the case of any sale by a Person of
Qualified Capital Stock, the aggregate net cash proceeds received by such
Person from the sale of Qualified Capital Stock (other than to a Subsidiary)
after payment of reasonable out-of-pocket expenses, commissions and discounts
incurred in connection therewith, and (b) in the case of any exchange,
exercise, conversion or surrender of any outstanding securities or Debt of such
Person for or into shares of Qualified Capital Stock of such Person, the net
book value of such outstanding securities as adjusted on the books of such
Person or Debt of such Person to the extent recorded in accordance with GAAP,
in each case, on the date of such exchange, exercise, conversion or surrender
(plus any additional amount required to be paid by the holder of such Debt or
securities to such Person upon such exchange, exercise, conversion or surrender
and less (i) any and all payments made to the holders of such Debt or
securities and (ii) all other expenses incurred by such Person in connection
therewith, in each case, insofar as such payments or expenses are incident to
such exchange, exercise, conversion, or surrender).
"Net Working Capital" of any Person means (i) all current assets of
such Person and its consolidated Subsidiaries, minus (ii) all current
liabilities of such Person and its consolidated Subsidiaries other than the
current portion of long term Debt, each item to be determined in conformity
with GAAP.
"Net Worth" of any Person means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of such Person and its Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation), less any amounts included therein attributable to Disqualified
Capital Stock or any equity security convertible into or exchangeable for Debt,
the cost of treasury stock (not otherwise deducted from stockholder's equity),
and the principal amount of any promissory notes receivable from the sale of
the Capital Stock of such Person or any of its Subsidiaries, each item to be
determined in conformity with GAAP.
"No. 2 Reformer" means the no. 2 reformer being constructed as part of
the Capital Improvement Program.
"NNM" means the Nasdaq National Market.
"Nominee" means any Person who has or holds any right, title or
interest in any oil and gas or mineral lease as a nominee for TransTexas or any
of its Subsidiaries.
"Nominee Property" means any property, lease, interest or other asset
with respect to which any Person has or holds any right, title or interest as a
Nominee.
"Non-Collateral Asset Sale" means any direct or indirect conveyance,
sale, transfer or other disposition (including through damage or destruction
for which Insurance Proceeds are paid or by condemnation), in one or a series
of related transactions, of any of the properties, businesses or assets of the
Company or any Subsidiary of the Company (other than properties, businesses or
assets of any of the TTXD Entities after the TTXD Spin-off), whether owned on
the Issue Date or thereafter acquired, which properties, businesses or assets
do not constitute Collateral.
15
22
"Non-Recourse Debt" of any Accounts Receivable Subsidiary means Debt
of such Accounts Receivable Subsidiary that (a) is not guaranteed by the
Company or any of its Subsidiaries (other than a guaranty by the Company
limited in recourse to the stock of the Accounts Receivable Subsidiary), (b) is
not recourse to and does not obligate the Company or any of its Subsidiaries
(other than as described in clause (a) above), and (c) does not subject any
assets of the Company (other than Capital Stock of such Accounts Receivable
Subsidiary) or any of its Subsidiaries, to the payment thereof.
"Noteholder" means the Person in whose name a Note is registered on
the Registrar's book.
"Note Redemption" means a redemption of Notes by the Company pursuant
to the redemption provisions of this Indenture.
"Note Repurchase" means a purchase of Notes by the Company, other than
pursuant to a Note Redemption, a Change of Control Offer or an Excess Cash
Offer; provided that all Notes purchased are delivered to the Trustee for
cancellation promptly upon their receipt by the Company.
"Notes" means, collectively, the Senior Secured Notes and the Senior
Secured Discount Notes.
"NYSE" means the New York Stock Exchange.
"Offering Circular" means the offering circular dated as of June 5,
1997 pursuant to which the Notes were offered.
"Office Leases" means the existing leases of office space at 1300
North Sam Houston Parkway East, Houston, Texas 77032-2949.
"Officer" means, with respect to the Company, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers or by an Officer and an Assistant Secretary
of the Company and otherwise complying with the requirements of Sections 13.4
and 13.5.
"Offsite Facilities" means additional supporting equipment and
facilities being constructed as part of the Capital Improvement Program.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of
Sections 13.4 and 13.5. Unless otherwise required by the Trustee, the counsel
may be outside counsel to the Company.
"Paying Agent" shall have the meaning specified in Section 2.3.
16
23
"Permitted Hedging Transactions" means non-speculative transactions in
futures, forwards, swaps or option contracts (including both physical and
financial settlement transactions) engaged in by the TARC Entities or the
TransTexas Entities as part of their normal business operations as a
risk-management strategy or hedge against adverse changes in the prices of
natural gas, feedstock or refined products; provided, that such transactions
do not in the case of TransTexas or its Subsidiaries, on a monthly basis,
relate to more than 90% of the TransTexas Entities' average net natural gas
production per month from the Continuing Operations for the most recent 3-month
period measured at the time of such incurrence; provided, further, that, at
the time of such transaction (i) the counter party to any such transaction is
an Eligible Institution or a Person that has an Investment Grade Rating or has
an issue of debt securities or preferred stock outstanding with an Investment
Grade Rating or (ii) such counter party's obligation pursuant to such
transaction is unconditionally guaranteed in full by, or secured by a letter of
credit issued by, an Eligible Institution or a Person that has an Investment
Grade Rating or that has an issue of debt securities or preferred stock
outstanding with an Investment Grade Rating.
"Permitted Investment" means, when used with reference to the Company
or its Subsidiaries, (i) trade credit extended to persons in the ordinary
course of business; (ii) purchases of Cash Equivalents; (iii) Investments by
TransTexas or its wholly owned Subsidiaries in wholly owned Subsidiaries of
TransTexas (other than TTXD) that are engaged in Related TransTexas Businesses
and Investments by TARC or its wholly owned Subsidiaries in wholly owned
Subsidiaries of TARC that are engaged in Related TARC Businesses; (iv) Swap
Obligations; (v) the receipt of capital stock in lieu of cash in connection
with the settlement of litigation; (vi) advances to officers and employees in
connection with the performance of their duties in the ordinary course of
business in an amount not to exceed $3,000,000 in the aggregate outstanding at
any time in the case of each of (i) the TARC Entities and (ii) the TransTexas
Entities; (vii) margin deposits in connection with Permitted Hedging
Transactions; (viii) an Investment in one or more Unrestricted Subsidiaries of
(a) TransTexas in an aggregate amount, net of return on such Investment, not in
excess of $25,000,000 less the amount of any Unrestricted Non-Recourse Debt
outstanding of TransTexas or any of its Subsidiaries and (b) TARC of the assets
comprising the CATOFIN(R) Unit owned by TARC as of the date hereof; (ix)
Investments and expenditures made in the ordinary course of business by
TransTexas or its Subsidiaries, and of a nature that is or shall have become
customary in, the oil and gas business as a means of actively exploiting,
exploring for, acquiring, developing, processing, gathering, marketing or
transporting oil or gas through agreements, transactions, interests or
arrangements which permit a person to share risks or costs, comply with
regulatory requirements regarding local ownership or satisfy other objectives
customarily achieved through the conduct of the oil and gas business jointly
with third parties, including, without limitation, (a) ownership interests in
oil and gas properties or gathering systems and (b) Investments and
expenditures in the form of or pursuant to operating agreements, processing
agreements, farm-in agreements, farm-out agreements, development agreements,
area of mutual interest agreements, unitization agreements, pooling
arrangements, joint bidding agreements, service contracts, joint venture
agreements, partnership agreements (whether general or limited), subscription
agreements, stock purchase agreements and other similar agreements with third
parties (including Unrestricted Subsidiaries); provided, that in the case of
any joint venture engaged in processing, gathering, marketing or transporting
oil or gas (i) all Debt of such joint venture (other than a joint venture that
is an Unrestricted Subsidiary) that would not otherwise constitute Debt of one
of the TransTexas Entities shall be deemed Debt of TransTexas in proportion to
its direct or indirect ownership interest in such joint venture and (ii) such
joint venture shall be reasonably calculated to enhance the value of the
reserves of the TransTexas Entities or marketability of production from such
reserves; (x) a guaranty by any Subsidiary of the Company permitted under
Section 4.11; (xi) deposits permitted by the definition of Permitted Liens or
any extension, renewal, or replacement of any of them, (xii) the TTXD Equity
Investment (in addition to any contribution by TransTexas pursuant to clause
(xiii) below), (xiii) capital contributions by
17
24
TransTexas to TTXD or to a joint venture, a partnership, a limited liability
company or a similar entity of TransTexas' drilling and energy services
business and pipeline services business and related assets, (xiv) any
acquisition by TARC of tank storage facilities (or the company that owns such
facilities) in the vicinity of the TARC refinery, (xv) guarantees by TransTexas
of Debt of TTXD to the extent that such Debt relates to assets contributed to
TTXD pursuant to clause (xiii) hereof, (xvi) Investments in Accounts
Receivables Notes by TARC in amounts not to exceed the greater of $20,000,000
or 20% of the TARC Borrowing Base at any one time, (xvii) loans from the
Company to its Subsidiaries (other than the TTXD Entities prior to the TTXD
Spin-off) with (i) the excess of the Excess Cash Offer Amount (after reserving
the full Interest Reserve Amount) over the Excess Cash Acceptance Amount,
provided, that such loans are on terms no less favorable to the Company than
were disclosed to the Holders of the Notes in the Excess Cash Offer or (ii) the
excess of the Additional Interest Excess Cash Offer Amount over the Additional
Interest Excess Cash Acceptance Amount, provided, that such loans are on terms
no less favorable to the Company than were disclosed to the Holders of the
Notes in the Additional Interest Excess Cash Offer, (xviii) an Investment in
Capital Stock resulting from an Asset Sale pursuant to clause (xiii) of Section
4.14, (xix) Investments by the Company in an Accounts Receivable Subsidiary, or
by the Company or TARC in a reincorporation subsidiary in each case in
connection with the initial capitalization thereof and not to exceed $1,000,
(xx) Investments by the Company or TARC or a wholly owned Subsidiary of either
of them solely for the purpose of facilitating a repurchase of the TARC
Warrants in connection with a merger, (xxi) other Investments not in excess of
$5,000,000 at any time outstanding, (xxii) loans made (X) to officers,
directors and employees of the Company or any of its Subsidiaries approved by
the applicable Board of Directors (or by an authorized officer), the proceeds
of which are used solely to purchase stock or to exercise stock options
received pursuant to an employee stock option plan or other incentive plan, in
a principal amount not to exceed the purchase price of such stock or the
exercise price of such stock options, as applicable and (Y) to refinance loans,
together with accrued interest thereon, made pursuant to this clause, in each
case not in excess of $3,000,000 in the aggregate outstanding at any one time,
(xxiii) Investments by the Company in its Subsidiaries in an aggregate amount
not to exceed the proceeds of Subordinated Debt permitted to be incurred
pursuant to clause (5)(d) of Section 4.11, (xxiv) Investments by the Company in
TARC in an amount not to exceed the amounts received by the Company from an
Accounts Receivable Subsidiary, (xxv) a capital contribution by TTXD of any or
all of its assets to a joint venture, a partnership, a limited liability
company or a similar entity, (xxvi) a capital contribution by the Company to
TARC in an amount not to exceed $226,000,000 (inclusive of any equity
contribution made as described in the Offering Circular under the heading "The
Transactions -- TARC Equity Contribution"), (xxvii) any deposit or escrow of
funds in connection with adjustments to the Lobo Sale purchase price or
(xxviii) loans made by the Company to TransTexas or TARC which in the aggregate
do not exceed $50,000,000 principal amount outstanding at any one time.
"Permitted Liens" means Permitted TARC Liens, Permitted TEC Liens and
Permitted TransTexas Liens.
"Permitted Production Payment Obligations" means Volumetric Production
Payments and Dollar-Denominated Production Payments each as permitted to be
made hereunder, and similar burdens on the property of TransTexas or any
Subsidiary of TransTexas to the extent such burdens are limited in recourse to
(x) the properties subject to such interests or agreements, (y) the
Hydrocarbons produced from such properties, and (z) the proceeds of such
Hydrocarbons.
"Permitted TARC Liens" means (a) Liens imposed by governmental
authorities for taxes, assessments, or other charges not yet due or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of any of the TARC
18
25
Entities in accordance with GAAP; (b) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen, repairmen, mineral interest owners, or
other like Liens arising by operation of law in the ordinary course of business
provided that (i) the underlying obligations are not overdue for a period of
more than 60 days, or (ii) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of any of the TARC Entities in accordance with GAAP;
(c) deposits of cash or Cash Equivalents to secure (i) the performance of bids,
trade contracts (other than borrowed money), leases, statutory obligations,
surety bonds, performance bonds, and other obligations of a like nature
incurred in the ordinary course of business (or to secure reimbursement
obligations or letters of credit issued to secure such performance or other
obligations) in an aggregate amount outstanding at any one time not in excess
of $5,000,000 or (ii) appeal or supersedeas bonds (or to secure reimbursement
obligations or letters of credit in support of such bonds); (d) easements,
rights-of-way, zoning, similar restrictions and other similar encumbrances or
title defects incurred in the ordinary course of business which, in the
aggregate, are not material in amount and which do not, in any case, materially
detract from the value of the property subject thereto (as such property is
used by any of the TARC Entities) or materially interfere with the ordinary
conduct of the business of any of the TARC Entities; (e) Liens arising by
operation of law in connection with judgments, only to the extent, for an
amount and for a period not resulting in an Event of Default with respect
thereto; (f) Liens securing Debt or other obligations not in excess of
$3,000,000; (g) pledges or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, other types of
social security legislation, property insurance and liability insurance; (h)
Liens on Equipment, Receivables and Inventory; (i) Liens on the assets of any
entity existing at the time such assets are acquired by any of the TARC
Entities, whether by merger, consolidation, purchase of assets or otherwise so
long as such Liens (i) are not created, incurred or assumed in contemplation of
such assets being acquired by any of the TARC Entities and (ii) do not extend
to any other assets of any of the TARC Entities; (j) Liens (including
extensions and renewals thereof) on real or personal property, acquired after
the Issue Date ("New TARC Property"); provided, however, that (i) such Lien is
created solely for the purpose of securing Debt Incurred to finance the cost
(including the cost of improvement or construction) of the item of New TARC
Property subject thereto and such Lien is created at the time of or within six
months after the later of the acquisition, the completion of construction, or
the commencement of full operation of such New TARC Property, (ii) the
principal amount of the Debt secured by such Lien does not exceed 100% of such
cost plus reasonable financing fees and other associated reasonable
out-of-pocket expenses (iii) any such Lien shall not extend to or cover any
property or assets other than such item of New TARC Property and any
improvements on such New TARC Property and (iv) such Lien does not extend to
assets or property which are part of the fixed refinery assets which are part
of the Capital Improvement Program; (k) leases or subleases granted to others
that do not materially interfere with the ordinary course of business of any of
the TARC Entities, taken as a whole; (l) Liens on the assets of one of the TARC
Entities in favor of another TARC Entity; (m) Liens securing reimbursement
obligations with respect to letters of credit that encumber documents relating
to such letters of credit and the products and proceeds thereof; provided,
that, such reimbursement obligations are not matured for a period of over 60
days; (n) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation
of goods; (o) Liens encumbering customary initial deposits and margin deposits
securing Swap Obligations or Permitted Hedging Transactions; (p) Liens on cash
deposits to secure reimbursement obligations with respect to letters of credit
after the Delayed Coking Unit is completed; (q) Liens that secure Unrestricted
Non-Recourse Debt; provided, however, that at the time of incurrence the
aggregate fair market value of the assets securing such Lien (exclusive of the
stock of the applicable Unrestricted Subsidiary) shall not exceed the amount of
allowed Unrestricted Non-Recourse Debt of TARC; (r) Liens on the proceeds of
any property subject to a Permitted TARC Lien or on deposit accounts containing
any such proceeds; (s) Liens on the proceeds of any property that is not
Collateral; (t) Liens imposed in
19
26
connection with the Port Commission Bond Financing; provided, that such liens
do not extend to property other than the Port Facility Assets; (u) any
extension, renewal or replacement of the Liens created pursuant to any of
clauses (a) through (g), (i) through (t) or (w) provided that such Liens would
have otherwise been permitted under such clauses, and provided further that the
Liens permitted by this clause (u) do not secure any additional Debt or
encumber any additional property; (v) Liens of the trustee under indenture and
related collateral documents governing the terms of the Senior TARC Mortgage
Notes and the Senior TARC Discount Notes; (w) Liens in favor of the Company or
its assignee under the Security Documents and (y) Liens on tank storage
facilities in the vicinity of the TARC refinery acquired after the date hereof.
"Permitted TEC Liens" means (a) Liens imposed by governmental
authorities for taxes, assessments, or other charges not yet due or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of any of the Company
in accordance with GAAP; (b) Liens arising by operation of law in connection
with judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto; (c) any extension,
renewal, or replacement of Liens created pursuant to either of clauses (a) or
(b) of this definition, provided that such Liens would have otherwise been
permitted under such clauses, and further provided that the Liens permitted by
this clause (c) shall not be spread to cover any additional Debt or property;
(d) Liens of the trustee under this Indenture and related collateral documents
governing the terms of the Senior TARC Mortgage Notes and the Senior TARC
Discount Notes; (e) deposits of cash or Cash Equivalents to secure appeal or
supersedeas bonds (or to secure reimbursement obligations or letters of credit
in support of such bonds), (f) pledges or deposits made in the ordinary course
of business in connection with worker's compensation, unemployment insurance,
and other types of social security legislation, property insurance and
liability insurance or (g) a Lien on the stock of an Accounts Receivable
Subsidiary securing a guaranty of the Debt of an Accounts Receivable Subsidiary
described in the definition of Unrestricted Non-Recourse Debt.
"Permitted TransTexas Liens" means (a) Liens imposed by governmental
authorities for taxes, assessments, or other charges not yet due or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of any of the
TransTexas Entities in accordance with GAAP; (b) statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen, repairmen, mineral interest
owners, or other like Liens arising by operation of law in the ordinary course
of business, provided that (i) the underlying obligations are not overdue for a
period of more than 60 days, or (ii) such Liens are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of any of the TransTexas Entities in accordance
with GAAP; (c) (i) pledges of assets or deposits of cash or Cash Equivalents to
secure the performance of bids, trade contracts (other than borrowed money),
leases, statutory obligations, surety bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business (or to
secure reimbursement obligations or letters of credit in support of such bonds)
in an aggregate amount not in excess of 5% of the SEC PV10 indicated on
TransTexas' most recent Reserve Report at the time such pledges or deposits are
made or (ii) pledges of assets, the fair market value of which is not in excess
of $40,000,000 in the aggregate pledged at any one time, or deposits of cash or
Cash Equivalents, in each case, to secure appeal or supersedeas bonds (or to
secure reimbursement obligations or letters of credit in support of such
bonds); (d) Liens encumbering customary initial deposits and margin deposits
securing Swap Obligations or Permitted Hedging Transactions; (e) pledges of
assets including, without limitation, the mortgage of a production payment by a
Hedging Subsidiary, to secure margin obligations, settlement obligations,
reimbursement obligations or letters of credit in connection with Permitted
Hedging Transactions; provided that, at the time such pledge is made (or, if
such pledge secures future Permitted Hedging Transactions, at the time any such
Permitted Hedging Transaction is entered into), the maximum
20
27
aggregate exposure under such Permitted Hedging Transactions does not exceed
the greater of (i) $25,000,000 or (ii) 10% of the SEC PV10 indicated on
TransTexas' then most recent Reserve Report; (f) easements, rights-of-way,
zoning, similar restrictions and other similar encumbrances or title defects
incurred in the ordinary course of business which, in the aggregate, are not
material in amount, and which do not in any case materially detract from the
value of the property subject thereto (as such property is used by any of the
TransTexas Entities) or materially interfere with the ordinary conduct of the
business of any of the TransTexas Entities; (g) Liens arising by operation of
law in connection with judgments, only to the extent, for an amount and for a
period not resulting in an Event of Default with respect thereto; (h) Liens
securing Debt or other obligations not in excess of $3,000,000 in the aggregate
outstanding at any one time and Liens existing on the date of this Indenture;
(i) pledges or deposits made in the ordinary course of business in connection
with worker's compensation, unemployment insurance, and other types of social
security legislation, property insurance and liability insurance; (j) Liens
granted on Equipment, Inventory or Receivables; (k) Liens granted in connection
with the Presale of Gas, provided that all of the proceeds from such Presale of
Gas shall be applied to an Intercompany Loan Redemption; (l) Liens created on
acreage drilled or to be drilled pursuant to Drilling Programs, on Hydrocarbons
produced therefrom and on the proceeds of such Hydrocarbons to secure
TransTexas' obligations thereunder, provided that (i) the number of wells
included in such program commenced in any fiscal year does not exceed 30 per
fiscal year (plus the number of wells included in programs commenced in prior
years but not yet completed), (ii) such obligations are limited to a percentage
of production from such wells, (iii) such Liens survive only until the Person
to whom such Lien was granted has received production with a value equal to the
reimbursable costs, expenses and fees related to property and services provided
or paid for by such Person plus an agreed-upon interest component, and (iv)
such Liens secure obligations that are nonrecourse to each of the Company or
its Subsidiaries; (m) Liens on the assets of any entity existing at the time
such assets are acquired by any of the TransTexas Entities, whether by merger,
consolidation, purchase of assets or otherwise so long as such Liens (i) are
not created, incurred or assumed in contemplation of such assets being acquired
by any of the TransTexas Entities and (ii) do not extend to any other assets of
any of the Company or its Subsidiaries; (n) any extension, renewal, or
replacement of Liens created pursuant to any of clauses (a) through (g), (i),
(k) through (m) or (q) through (t) of this definition, provided that such Liens
would have otherwise been permitted under such clauses, and further provided
that the Liens permitted by this clause (n) do not secure any additional Debt
or encumber any additional property; (o) Liens securing (i) Royalty Payment
Obligations and (ii) Permitted Production Payment Obligations; (p) Liens on the
assets of any of the TransTexas Entities in favor of another TransTexas Entity;
(q) Liens that secure Unrestricted Non-Recourse Debt; provided however, that at
the time of incurrence the aggregate fair market value of the assets securing
such Lien (exclusive of the stock of the applicable Unrestricted Subsidiary)
shall not exceed the amount of allowed Unrestricted Non-Recourse Debt of
TransTexas; (r) Liens on the proceeds of any property subject to a Permitted
TransTexas Lien or on deposit accounts containing any such proceeds; (s) Liens
on the proceeds of any property that is not Collateral; (t) Liens (including
extensions and renewals thereof) on real or personal property, acquired after
the Issue Date ("New TransTexas Property"); provided, however, that (i) such
Lien is created solely for the purpose of securing Debt Incurred to finance the
cost (including the cost of improvements or construction) of New TransTexas
Property subject thereto and such Lien is created at the time of or within six
months after the later of the acquisition, the completion of construction, or
the commencement of full operation of such New TransTexas Property, (ii) the
principal amount of the Debt secured by such Lien does not exceed 100% of such
cost including costs and fees related to the financing thereof, (iii) any such
Lien shall not extend to or cover any property or assets other than such item
of New TransTexas property and any improvements on such New TransTexas
Property; (u) Liens of the trustee under the Indenture and related collateral
documents governing the terms of the TransTexas Senior Notes and (v) Liens in
favor of the Company or its assignee under the Security Documents.
21
28
"Person" means any corporation, individual, joint stock company, joint
venture, partnership, unincorporated association, governmental regulatory
entity, country, state, or political subdivision thereof, trust, municipality,
or other entity.
"Phase I" means the first phase of the Capital Improvement Program
including the following process units and supporting facilities: the Delayed
Coking Unit, the HDS Unit, the Naphtha Pretreater, the No. 2 Reformer, the
Sulfur Recovery System and the Offsite Facilities.
"Phase I Completion Date" means the date on which the Construction
Supervisor issues a written notice (the "Phase I Completion Notice") to the
Company and the Disbursement Agent certifying that (a) the process units and
supporting facilities included in the definition of "Phase I" have reached
Mechanical Completion in accordance with the Plans, and (b) for a period of at
least 15 consecutive days, TARC's refinery has sustained (i) the successful
performance of the Delayed Coking Unit, the HDS Unit and the Sulfur Recovery
System, (ii) an average feedstock throughput level of at least 150,000 barrels
per day, and (iii) no net production of vacuum tower bottoms when using as
input a combined feedstock slate with an average API Gravity of 22 degrees or
less.
"Phase II" means the second phase of the Capital Improvement Program
including the following process units and supporting facilities: the FCC Unit,
the Alkylation Unit and the Offsite Facilities.
"Phase II Completion Date" means the date on which the Construction
Supervisor issues a written notice (the "Phase II Completion Notice") to the
Company and the Disbursement Agent certifying that (a) the process units and
supporting facilities included in the definition of "Phase II" have reached
Mechanical Completion in accordance with the Plans, and (b) for a period of at
least 72 uninterrupted hours, TARC's refinery has sustained (i) the successful
performance of all of the Phase I facilities plus the Fluid Catalytic Cracking
(FCC) Unit, the FCC Flue Gas Scrubber and the Alkylation Unit, (ii) an average
feedstock throughput level of at least 180,000 barrels per day, and (iii)
average production yields (measured as the liquid volume percent of feedstock
throughput) of refined products with a specific gravity of gasoline or lighter
of at least 40% and of middle distillates or lighter of at least 70%, when
using a combined Crude Unit feedstock slate with an average API Gravity of 22
degrees or less.
"Plans" means (a) the plans and specifications prepared by or on
behalf of TARC as used in the Disbursement Agreement, which describe and show
the proposed expansion and modification of TARC's refinery and (b) a budget
prepared by or on behalf of TARC as used in the Disbursement Agreement.
"Pledged Stock" shall have the meaning given to it in Section 12.7
hereof.
"Port Commission Bond Financing" means a financing transaction
involving the following elements: (a) the transfer of TARC's interest in all or
some of the following assets which are under construction in or near TARC's
refinery: (i) the Prospect Road tank farm; (ii) certain dock improvements;
(iii) the dock vapor recovery system; (iv) the coke handling system; (v) the
refinery waste water treatment facility and (vi) tankage for liquefied
petroleum gas (the "Port Facility Assets") to the Port of South Louisiana
Commission (the "Tax-Exempt Issuer") or its affiliate and a leaseback of the
Port Facility Assets to TARC or one of its Subsidiaries; (b) the issuance of
tax-exempt bonds by the Tax-Exempt Issuer; and (c) the loan of proceeds from
such bonds to TARC or one of its Subsidiaries for the purpose of financing the
completion of the Port Facility Assets.
22
29
"Preferred Stock" means, with respect to any corporation, any class or
classes (however designated) of Capital Stock of such Person that is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation over
shares of Capital Stock of any other class of such corporation.
"Presale of Gas" means any advance payment agreement or other
arrangement pursuant to which TransTexas or any Guarantor of the TransTexas
Intercompany Loan, having received full payment of the purchase price for a
specified quantity of Hydrocarbons prior to the first scheduled date of
delivery, is required to deliver, in one or more installments subsequent to the
date of such agreement or arrangement, such quantity of Hydrocarbons to the
purchaser of such Hydrocarbons pursuant to and during the term of such
agreement or arrangement; provided, however, that the term "Presale of Gas"
shall not include (i) any such agreement or other arrangement covering
deliveries of Hydrocarbons for a period not exceeding three calendar months and
pursuant to which TransTexas or such Guarantor has received full payment of the
purchase price within 120 days of the last scheduled date of delivery, (ii) a
transaction to the extent and only to the extent that it results in the
creation of any Permitted TransTexas Lien under clauses (l) or (o) of the
definition of "Permitted TransTexas Liens," (iii) Permitted Hedging
Transactions or (iv) an Asset Sale involving Hydrocarbon reserves.
"principal amount" when used with respect to the Senior Secured
Discount Notes means the principal amount of such Debt as indicated on the face
of such Debt instrument.
"Prior Notes" means, collectively, the Senior TransTexas Notes, the
Senior TARC Mortgage Notes and the Senior TARC Discount Notes.
"Project Costs" means, with respect to a proposed expansion or
modification of TARC's refinery, the aggregate costs required to complete such
expansion or modification of the refinery in accordance with the Plans therefor
and applicable legal requirements, including direct costs related thereto such
as construction, engineering and design costs and the cost of site work,
construction permits, certificates and bonds, fixtures, machinery, and
equipment.
"Property" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Public Equity Offering" means an underwritten public offering by a
nationally recognized member of the National Association of Securities Dealers
of Qualified Capital Stock of any Person pursuant to an effective registration
statement filed with the SEC pursuant to the Securities Act.
"QIB" shall mean "qualified institutional buyer" as defined in Rule
144A.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Receivables" means and includes, as to any Person, any and all of
such Person's now owned or hereafter acquired "accounts" as such term is
defined in Article 9 of the Uniform Commercial Code in the State of New York,
all products and proceeds thereof, and all books, records, ledger cards, files,
correspondence, and computer files, tapes, disks or software that at any time
evidence or contain information relating to the foregoing.
23
30
"Record Date" means a Record Date specified in the Notes regardless of
whether such Record Date is a Business Day.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to this Indenture and
Paragraph 5 in the forms of Note attached hereto as Exhibit A and Exhibit B.
"Redemption Price" when used with respect to any Note to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
forms of Note attached hereto as Exhibit A and Exhibit B, which shall include,
without duplication, in each case, accrued and unpaid interest to the
Redemption Date.
"Reference Period" with regard to any Person means the four full
fiscal quarters of such Person ended on or immediately preceding any date upon
which any determination is to be made pursuant to the terms of the Notes or
this Indenture.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreements" means the Registration Rights
Agreements in connection with the registration under federal securities laws of
(i) the Notes and (ii) the capital stock of TARC, TransTexas and TTXD pledged
or to be pledged to the Trustee, in each case among the Company and the
Trustee, as in effect on the Issue Date and as amended from time to time,
provided that any such amendment is not materially adverse to the holders of
the Notes.
"Reimbursement and Credit Facility" means the Reimbursement and Credit
Agreement dated January 25, 1996, pursuant to which a third party caused a
$20,000,000 letter of credit to be issued to collateralize a supersedeas bond
on behalf of TransTexas, as amended from time to time in a manner not adverse
to the Holders of the Notes.
"Related Business" means any of the Related TARC Business, the Related
TransTexas Business and the Related TTXD Business.
"Related Person" means (i) any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any Subsidiary of the Company or any officer, director, or
employee of the Company or any Subsidiary of the Company or of such Person,
(ii) the spouse, any immediate family member, or any other relative who has the
same principal residence of any Person described in clause (i) above, and any
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with, such spouse, family member, or other relative,
and (iii) any trust in which any Person described in clause (i) or (ii), above,
is a fiduciary or has a beneficial interest. For purposes of this definition
the term "control" means (a) the power to direct the management and policies of
a Person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise, or (b) the
beneficial ownership of 10% or more of the voting common equity of such Person
(on a fully diluted basis) or of warrants or other rights to acquire such
equity (whether or not presently exercisable).
"Related TARC Business" means the business of (i) processing,
blending, terminalling, storing, marketing (other than through operating retail
gasoline stations), refining, or distilling crude oil, condensate, natural gas
liquids, petroleum blendstocks or refined products thereof, (ii) owning and
24
31
\operating an Accounts Receivable Subsidiary and (iii) after the Phase II
Completion Date, the exploration for, acquisition of, development of,
production, transportation and gathering of crude oil, natural gas, condensate
and natural gas liquids from outside of the United States.
"Related TransTexas Business" means (i) the exploration for,
acquisition of, development of, production, transportation, gathering, and
processing (in connection with natural gas and natural gas liquids only) of,
crude oil, natural gas, condensate, and natural gas liquids; provided that the
Related TransTexas Business shall not include any refining or distilling of
Hydrocarbons other than processing and fractionating natural gas and natural
gas liquids, (ii) the drilling and energy services business and pipeline
services business or (iii) owning and operating a Hedging Subsidiary.
"Related TTXD Business" means the drilling and energy services
business and pipeline services business.
"Release Request" means a written request of the Company (or with
respect to the Security Documents, the grantor of the security interest
thereunder) in the form of an Officers' Certificate delivered pursuant to
Article XII.
"Required Phase I Completion Date" means March 31, 1999.
"Reserve Report" means a report prepared by independent petroleum
engineers with respect to Hydrocarbon reserves in accordance with guidelines
published by the SEC.
"Restricted Investment" means any direct or indirect Investment by the
Company or any Subsidiary of the Company other than a Permitted Investment.
"Restricted Notes" means, collectively, the Restricted Senior Secured
Notes and the Restricted Senior Secured Discount Notes.
"Restricted Payment" means, with respect to any Person, (i) any
Restricted Investment, (ii) any dividend or other distribution on shares of
Capital Stock of such Person or any Subsidiary of such Person, (iii) any
payment on account of the purchase, redemption, or other acquisition or
retirement for value of any shares of Capital Stock of such Person, and (iv)
any defeasance, redemption, repurchase, or other acquisition or retirement for
value, or any payment in respect of any amendment in anticipation of or in
connection with any such retirement, acquisition, or defeasance, in whole or in
part, of any Subordinated Debt, directly or indirectly, of such Person or a
Subsidiary of such Person prior to the scheduled maturity or prior to any
scheduled repayment of principal in respect of such Subordinated Debt;
provided, however, that the term "Restricted Payment" does not include (i) any
dividend, distribution, or other payment on shares of Capital Stock of an
issuer solely in shares of Qualified Capital Stock of such issuer that is at
least as junior in ranking as the Capital Stock on which such dividend,
distribution, or other payment is to be made, (ii) any dividend, distribution,
or other payment to the Company from any of its Subsidiaries, (iii) any
defeasance, redemption, repurchase, or other acquisition or retirement for
value, in whole or in part, of any Subordinated Debt of such Person payable
solely in shares of Qualified Capital Stock of such Person, (iv) any payments
or distributions made pursuant to and in accordance with the Transfer
Agreement, the TransTexas Drilling Agreement, the Services Agreement, the
Office Leases or the Tax Allocation Agreement, (v) any dividend, distribution
or other payment to TARC by any of its Subsidiaries or TransTexas by any of its
Subsidiaries, (vi) any Intercompany Loan Redemptions, (vii) any redemption,
repurchase or other retirement for value of the TARC Warrants by the Company or
TARC, including any
25
32
premium paid thereon, (viii) any redemption, repurchase or other retirement for
value of the TEC Preferred Stock by the Company, including any premium paid
thereon, (ix) any redemption, defeasance, repurchase or other retirement for
value of the Senior TARC Mortgage Notes by TARC, including any premium paid
thereon, (x) any redemption, defeasance, repurchase or other retirement for
value of the Senior TARC Discount Notes by TARC, including any premium paid
thereon, (xi) any redemption, defeasance, repurchase or other retirement for
value of the Senior TransTexas Notes by TransTexas, including any premium paid
thereon, (xii) an Investment by TransTexas in, or distribution by TransTexas
on, its Capital Stock pursuant to share repurchases or dividends on its Capital
Stock in each case as described in the Offering Circular under the caption
"Transactions" in an aggregate amount not to exceed $400,000,000, (xiii) the
redemption, purchase, retirement or other acquisition of any Debt, including
any premium paid thereon, with the proceeds of any refinancing Debt permitted
to be incurred pursuant to clause (1)(g), (3)(j), 4(j) or 5(e) of Section 4.11,
(xiv) the distribution by TransTexas of shares of capital stock of TTXD in
connection with the TTXD Spin-off, (xv) after the repayment of the TARC
Intercompany Loan or the TransTexas Intercompany Loan, dividends or other
distributions on shares of common stock of TARC or TransTexas, respectively,
provided that each such dividend or distribution is paid to all holders of
common stock of such entity on a pro rata basis, (xvi) the purchase by TARC or
TransTexas of shares of Capital Stock of TARC, TransTexas or TTXD in connection
with each of their employee benefit plans, including without limitation any
employee stock ownership plans or any employee stock option plans, in an
aggregate amount not to exceed 7% of the aggregate market value of the voting
stock held by non-affiliates of the issuer measured from the date of the first
such purchase, (xvii) dividends or other payments not to exceed $23,000,000 in
the aggregate from the Company to TransAmerican, and (xviii) any repayment or
retirement for value by TARC or TransTexas of any loan from the Company
incurred pursuant to clause (1)(q), (1)(r), (2)(o), (2)(p), (3)(u), (3)(v),
(4)(s), or (4)(t) of Section 4.11.
"Restricted Senior Secured Discount Notes" means Senior Secured
Discount Notes that bear or are required to bear the legends set forth in
Exhibit B hereto.
"Restricted Senior Secured Notes" means Senior Secured Notes that bear
or are required to bear the legends set forth in Exhibit A hereto.
"Revolving Credit Facility" means any revolving credit facility
between TransTexas, on the one hand, and any banks or other lenders, on the
other hand.
"Royalty Payment Obligations" means (i) royalties, overriding
royalties, revenue interests, net revenue interests, net profit interests, and
reversionary interests, (ii) the interests of others in pooling or unitization
agreements, production sales contracts and operating agreements, (iii) Liens
arising under, in connection with or related to farm-out, farm-in, joint
operating, pooling, unitization or area of mutual interest agreements or other
similar or customary arrangements, agreements or interests, and (iv) similar
burdens on the property of TransTexas or any Subsidiary of TransTexas; each as
incurred in the ordinary course of business and to the extent such burdens are
limited in recourse to (x) the properties subject to such interests or
agreements, (y) the Hydrocarbons produced from such properties, and (z) the
proceeds of such Hydrocarbons.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
26
33
"Sale and Leaseback Transaction" means an arrangement relating to
property owned on the Issue Date or thereafter acquired whereby the Company or
a Subsidiary of the Company transfers such property to a Person and leases it
back from such Person.
"SEC" means the Securities and Exchange Commission.
"SEC PV10" means the standardized measure of future net cash flows
discounted at 10%, determined in all material respects in accordance with the
rules and regulations of the SEC, including the assumption of the continuation
of existing economic conditions and estimated by applying period-end gas and
condensate prices, adjusted for future price changes as allowed by contract, to
estimated future production of period-end proved reserves.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Security Documents" means the TARC Security Documents and the
TransTexas Security Documents and a collateral assignment by the Company of
each of these to the Trustee and a pledge by the Company of substantially all
of its assets, including its interest in the TEC Disbursement Account, the
Capital Stock of TARC, TransTexas and any other future Subsidiaries and the
Intercompany Notes and each other agreement relating to any Guarantee or the
pledge of assets to secure the Notes or the TransTexas Intercompany Loan or the
TARC Intercompany Loan that may be entered into on or after the Issue Date
pursuant to the terms of this Indenture.
"Security Interests" means the Liens on the Collateral created by the
Security Documents in favor of the Trustee (and TEC with respect to the TARC
Security Documents and the TransTexas Security Documents) for the benefit of
the Holders.
"Senior Debt" means, with respect to any Person, any Debt that is not
Subordinated Debt.
"Senior Secured Discount Notes" means, collectively, the Series A
Senior Secured Discount Notes and the Series B Senior Secured Discount Notes.
"Senior Secured Notes" means, collectively, the Series A Senior
Secured Notes and the Series B Senior Secured Notes.
"Senior TARC Discount Notes" means the Guaranteed First Mortgage
Discount Notes due 2002 issued by TARC and guaranteed by the Company.
"Senior TARC Mortgage Notes" means the Guaranteed First Mortgage Notes
due 2002 issued by TARC and guaranteed by the Company.
"Senior TransTexas Notes" means the 11 1/2% Senior Secured Notes due
2002 of TransTexas.
"Series A Senior Secured Discount Notes" means the Company's 13%
Series A Senior Secured Discount Notes due 2002, as authenticated and issued
under this Indenture.
"Series A Senior Secured Notes" means the Company's 11 1/2% Series A
Senior Secured Notes due 2002, as authenticated and issued under this
Indenture.
27
34
"Series B Senior Secured Discount Notes" means the Company's 13%
Series B Senior Secured Discount Notes due 2002, as authenticated and issued
under this Indenture.
"Series B Senior Secured Notes" means the Company's 11 1/2% Series B
Senior Secured Notes due 2002, as authenticated and issued under this
Indenture.
"Services Agreement" means the Services Agreement among TNGC Holdings
and its Subsidiaries, as in effect on the Issue Date and as amended from time
to time, provided that any such amendment is not materially adverse to the
holders of the Notes.
"Special Record Date" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Note, means June 15,
2002.
"Subordinated Debt" means Debt of TARC or TransTexas that (i) requires
no payment of principal prior to or on the date on which all principal of and
interest on the respective Intercompany Loans is paid in full and (ii) is
subordinate and junior in right of payment to the respective Intercompany Loans
in the event of a liquidation.
"Subordinated Notes" means the $189,000,000 principal amount of 13
1/4% Series A Senior Subordinated Discount Notes due 2003 of TransTexas, in the
form in existence on the date hereof, the 13 1/4% Series B Senior Subordinated
Discount Notes due 2003 of TransTexas, the 13 3/4% Series C Senior Subordinated
Notes due 2001 of TransTexas and the 13 3/4% Series D Senior Subordinated Notes
due 2001 of TransTexas.
"Subordination Agreement" means each instrument of subordination
executed and delivered or to be executed and delivered by the Trustee (and any
trustee or collateral agent under or with respect to any of the Security
Documents) pursuant to Section 12.2(b).
"Subordination Request" means a written request of the Company (or
with respect to the Security Documents, the grantor of the security interest
thereunder) in the form of an Officers' Certificate delivered pursuant to
Section 12.2(b).
"Subsidiary" with respect to any Person, means (i) a corporation with
respect to which such Person or its Subsidiaries owns, directly or indirectly,
at least fifty percent of such corporation's Capital Stock with voting power,
under ordinary circumstances, to elect directors, or (ii) a partnership in
which such Person or a subsidiary of such Person is, at the time, a general
partner of such partnership and has more than 50% of the total voting power of
partnership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of managers thereof, or (iii) any other
Person (other than a corporation or a partnership) in which such Person, one or
more Subsidiaries of such Person, or such Person and one or more Subsidiaries
of such Person, directly or indirectly, at the date of determination thereof
has (x) at least a fifty percent ownership interest or (y) the power to elect
or direct the election of the directors or other governing body of such other
Person; provided, however, that "Subsidiary" shall not include (i) for the
purposes of Section 4.16, a joint venture an investment in which would
constitute a Permitted Investment under clause (ix) of the definition thereof,
(ii) any Unrestricted Subsidiary of such Person, except for purposes of Section
4.10 or (iii) an Accounts Receivable Subsidiary.
28
35
"Substitute Collateral" means property that is substituted for
Collateral in accordance with Section 12.6.
"Sulfur Recovery System" means the two sulfur units being constructed
as part of the Capital Improvement Program.
"Surviving Person" shall have the meaning specified in Section 5.1(a).
"Swap Obligation" of any Person means any Interest Rate or Currency
Agreement entered into with one or more financial institutions or one or more
futures exchanges in the ordinary course of business and not for purposes of
speculation that is designed to protect such Person against fluctuations in (x)
interest rates with respect to Debt Incurred and which shall have a notional
amount no greater than 105% of the principal amount of the Debt being hedged
thereby, or (y) currency exchange rate fluctuations.
"TARC" means TransAmerican Refining Corporation, a Texas corporation.
"TARC Borrowing Base" means, as of any date, an amount equal to the
sum of (a) 90% of the book value of all accounts receivable owned by TARC and
its Subsidiaries (excluding any accounts receivable that are more than 90 days
past due, less (without duplication) the allowance for doubtful accounts
attributable to such current accounts receivable) calculated on a consolidated
basis and in accordance with GAAP and (b) 85% of the current market value of
all inventory owned by TARC and its Subsidiaries as of such date. To the extent
that information is not available as to the amount of accounts receivable as of
a specific date, TARC may utilize, to the extent reasonable, the most recent
available information for purposes of calculating the TARC Borrowing Base.
"TARC Collateral" means (x) the assets of TARC which are mortgaged or
pledged to the Company as security for the TARC Intercompany Loan in accordance
with the TARC Security Documents and (y) the Guarantees by the Subsidiaries of
TARC of the TARC Intercompany Loan.
"TARC Disbursement Account" means a segregated deposit account from
which funds will be disbursed pursuant to the terms of the Disbursement
Agreement.
"TARC Entities" means TARC and each of its Subsidiaries.
"TARC Guarantor Mortgage" means each mortgage, deed of trust,
assignment, security agreement and financing statement by each Guarantor of the
TARC Intercompany Loan to the trustee named therein for the benefit of the
Company.
"TARC Guarantor Security Agreement" means each Security Agreement,
Pledge and Financing Statement by each Guarantor of the TARC Intercompany Loan
in favor of the Company.
"TARC Intercompany Loan" means the senior secured promissory note from
TARC to the Company in the fully accreted principal amount of $920,000,000 upon
substantially the terms described in the form attached hereto as Exhibit I.
"TARC Intercreditor Agreement" means the Intercreditor and Collateral
Agency Agreement among the Trustee, the trustee under the indenture relating to
the Senior TARC Mortgage Notes and the
29
36
Senior TARC Discount Notes, the Company and Firstar Bank of Minnesota, N.A., as
collateral agent, in substantially the form attached hereto as Exhibit M.
"TARC Interest Increase" means the .25% per annum increase in the rate
of interest borne by the TARC Intercompany Loan on or after June 15, 1999 which
occurs if the cost to complete Phase I is in excess of $245,000,000.
"TARC Mortgage" means the Mortgage, Assignment of Leases and Rents,
Security Agreement and Financing Statement from TARC in favor of the Company.
"TARC Pledge Agreement" means the Pledge Agreement between TARC and the
Company.
"TARC Security Agreement" means the Security Agreement between TARC and
the Company.
"TARC Security Documents" means the TARC Security Agreement, the TARC
Pledge Agreement, the Disbursement Agreement, the TARC Mortgage, the TARC
Intercreditor Agreement, a registration rights agreement relating to the shares
of TARC Common Stock pledged to the Indenture Trustee and each other agreement
relating to the pledge of assets to secure the TARC Intercompany Loan and any
guarantee of the obligations of TARC under the TARC Intercompany Loan by any
Guarantor that may be entered into after the date of the TARC Intercompany
Loan, pursuant to the terms of the TARC Intercompany Loan.
"TARC Shared Collateral" means the Collateral securing the Senior TARC
Mortgage Notes, the Senior TARC Discount Notes, and the TARC Intercompany Loan.
"TARC Warrants" means the Common Stock Purchase Warrants of TARC
issued on February 23, 1995.
"Tax Allocation Agreement" means the Tax Allocation Agreement, dated
as of August 24, 1993, among TNGC Holdings Corporation, the Company and certain
Subsidiaries, as in effect on the Issue Date and as amended from time to time,
provided that any such amendment is not materially adverse to the holders of
the Notes.
"TEC Disbursement Account" means a segregated deposit account from
which funds will be disbursed pursuant to the Disbursement Agreement.
"TEC Preferred Stock" means the 1,000 shares of Preferred Stock issued
on February 23, 1995.
"Third Party Consent Agreement" means any mineral lease, right-of-way,
easement, or any farm-out, farm-in, joint operating, joint venture or area of
mutual interest agreement to which TransTexas or any of its Subsidiaries is a
party (i) that is included in the Collateral or relates to an asset included in
the Collateral, (ii) that requires the consent or approval of any Person (a)
for the creation, perfection, maintenance or protection of a valid security
interest in, or Lien against, any of the Collateral in favor of the Company or
the Trustee or (b) upon foreclosure of the Trustee's Lien, for the Company or
the Trustee to acquire or sell, assign, dispose of or otherwise transfer such
mineral lease, right-of-way, easement, or farm-out, farm-in, joint operating,
joint venture or area of mutual interest agreement or any right or interest of
TransTexas or any of its Subsidiaries thereunder, or for the Company or the
Trustee to exercise any or
30
37
all of its rights or remedies under any of the Security Documents and (iii)
with respect to which such consent or approval has not yet been obtained.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"Trading Day" means any day on which the securities in question are
quoted on the NYSE, or if such securities are not approved for listing on the
NYSE, on the principal national securities market or exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities market or exchange, on the NNM.
"TransAmerican" means TransAmerican Natural Gas Corporation, a Texas
corporation.
"Transfer Agreement" means the Transfer Agreement, dated as of August
24, 1993, among TransAmerican, TransTexas, TransTexas Transmission Corporation,
and John R. Stanley, as in effect on the Issue Date and as amended from time to
time, provided that any such amendment is not materially adverse to the holders
of the Notes.
"TransTexas" means TransTexas Gas Corporation, a Delaware corporation.
"TransTexas Borrowing Base" means, as of any date, an amount equal to
the sum of (a) 85% of the book value of all accounts receivable owned by
TransTexas and its Subsidiaries (excluding any accounts receivable that are
more than 90 days past due, less (without duplication) the allowance for
doubtful accounts attributable to such current accounts receivable) calculated
on a consolidated basis and in accordance with GAAP and (b) 70% of the current
market value of all inventory owned by TransTexas and its Subsidiaries as of
such date. To the extent that information is not available as to the amount of
accounts receivable as of a specific date, TransTexas may utilize, to the
extent reasonable, the most recent available information for purposes of
calculating the TransTexas Borrowing Base.
"TransTexas Collateral" means (x) the assets of TransTexas which are
mortgaged or pledged to the Company pursuant to the terms of the TransTexas
Security Documents and (y) the guarantees by the Subsidiaries of TransTexas of
the TransTexas Intercompany Loan.
"TransTexas Disbursement Agreement" means the Disbursement Agreement
among TransTexas, the Company, the Trustee and the disbursement agent named
therein, as amended pursuant to the terms thereof.
"TransTexas Drilling Agreement" means a drilling services agreement
between TransTexas and TTXD relating to the provision by TTXD to TransTexas of
drilling and related services at market rates, upon the terms approved by the
board of directors of each of TTXD and TransTexas.
"TransTexas Entities" means TransTexas and each of its Subsidiaries.
"TransTexas Guarantor Mortgage" means each mortgage, deed of trust,
assignment, security agreement and financing statement by each Guarantor of the
TransTexas Intercompany Loan to the trustee named therein for the benefit of
the Company.
31
38
"TransTexas Guarantor Security Agreement" means each security
agreement, pledge and financing statement by each Guarantor of the TransTexas
Intercompany Loan in favor of the Company.
"TransTexas Intercompany Loan" means the senior secured promissory
note from TransTexas to the Company in the principal amount of $450,000,000
upon substantially the terms described in the form attached hereto as Exhibit
L.
"TransTexas Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement among the Trustee, the trustee under the indenture
relating to the Senior TransTexas Notes, the Company and Firstar Bank of
Minnesota, N.A., as collateral agent, upon substantially the terms described in
the form attached hereto as Exhibit N.
"TransTexas Interest Increase" means an increase in the rate of
interest borne by the TransTexas Intercompany Loan from 10 7/8% to 12 7/8%
during a TransTexas Interest Increase Quarter.
"TransTexas Interest Increase Quarter" means any fiscal quarter
immediately following a Capital Expenditure Testing Quarter, in which Capital
Expenditure Testing Quarter the Capital Expenditures of TransTexas exceeded the
Consolidated EBITDA of TransTexas for the fiscal quarter immediately preceding
such Capital Expenditure Testing Quarter.
"TransTexas Mortgage" means the several Mortgage, Deed of Trust,
Assignment of Production, Security Agreement and Financing Statements by
TransTexas to the trustee named therein for the benefit of the Company.
"TransTexas Security Agreement" means the Security Agreement, Pledge
and Financing Statement by TransTexas, in favor of the Company.
"TransTexas Security Documents" means the TransTexas Mortgage, the
TransTexas Security Agreement, the TransTexas Disbursement Agreement, the
TransTexas Intercreditor Agreement, a registration rights agreement relating to
the shares of TransTexas common stock pledged to the Indenture Trustee and each
other agreement relating to the pledge of assets to secure the TransTexas
Intercompany Loan and any guarantee of the obligations of TransTexas under the
TransTexas Intercompany Loan by any Guarantor that may be entered into after
the date of the TransTexas Intercompany Loan, pursuant to the terms of the
TransTexas Intercompany Loan.
"TransTexas Shared Collateral" means the Collateral securing the
Senior TransTexas Notes and the TransTexas Intercompany Loan.
"Trust Officer" means any officer within the corporate trust
department (or any successor group) of the Trustee including any vice
president, assistant vice president, secretary, assistant secretary or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at that time shall be
such officers, and also means, with respect to a particular corporate trust
matter, any other officer of the corporate trust department (or any successor
group) of the Trustee to whom such trust matter is referred because of his
knowledge of and familiarity with the particular subject.
32
39
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TTXD" means TransTexas Drilling Services, Inc., a Delaware
corporation or a newly formed corporation which is initially a wholly owned
Subsidiary of TransTexas formed for the purpose of receiving the Investments
described herein under clauses (xii) and (xiii) under the definition of
"Permitted Investments" contained herein.
"TTXD Entities" means TTXD and each of its Subsidiaries.
"TTXD Equity Investment" means an equity Investment by TransTexas in
TTXD in an aggregate amount not in excess of $75,000,000.
"TTXD Spin-off" means (i) the transfer of the drilling and integrated
services business and pipeline services business and related assets from
TransTexas to TTXD and (ii) the (x) dividend of shares of common stock of TTXD
to holders of TransTexas common stock or (y) any other transaction that would
result, in the case of (x) or (y), in TransTexas being the beneficial owner of
less than 50% of the common stock of TTXD.
"Unrestricted Non-Recourse Debt" of the Company or any of its
Subsidiaries means (i) Debt of such Person that is secured solely (other than
with respect to clause (ii) below) by a Lien upon the stock of an Unrestricted
Subsidiary of such Person and as to which there is no recourse (other than with
respect to clause (ii) below) against such Person or any of its assets other
than against such stock (and the dollar amount of any Debt of such Person as
described in this clause (i) shall be deemed to be zero for purposes of all
other provisions of the Indenture) and (ii) guarantees of the Debt of
Unrestricted Subsidiaries of such Person; provided, that the aggregate of all
Debt of such Person Incurred and outstanding pursuant to clause (ii) of this
definition, together with all Permitted Investments (net of any return on such
Investment) in Unrestricted Subsidiaries of such Person, does not exceed (x)
$25,000,000 in the case of TransTexas or (y) 20% of TARC's Consolidated EBITDA
since the Phase II Completion Date in the case of TARC plus in the case of
clause (ii) of this definition of Unrestricted Non-Recourse Debt, Restricted
Payments permitted to be made pursuant to clauses (i) or (ii), as applicable,
of Section 4.3.
"Unrestricted Subsidiary" of any Person means any other Person ("Other
Person") that would, but for this definition of "Unrestricted Subsidiary" be a
Subsidiary of such Person organized or acquired after the Issue Date as to
which all of the following conditions apply: (i) neither such Person nor any of
its other Subsidiaries provides credit support of any Debt of such Other Person
(including any undertaking, agreement or instrument evidencing such Debt),
other than Unrestricted Non-Recourse Debt; (ii) such Other Person is not
liable, directly or indirectly, with respect to any Debt other than
Unrestricted Subsidiary Debt; (iii) neither such Person nor any of its
Subsidiaries has made an Investment in such Other Person unless such Investment
was permitted by the provisions of Section 4.3 and (iv) the Board of Directors
of such Person, as provided below, shall have designated such Other Person to
be an Unrestricted Subsidiary on or prior to the date of organization or
acquisition of such Other Person. Any such designation by the Board of
Directors of such Person shall be evidenced to the Trustee by delivering to the
Trustee a resolution thereof giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. The Board of Directors of any Person may designate any Unrestricted
Subsidiary of such Person as a Subsidiary of such Person; provided, that, (a)
if the Unrestricted Subsidiary has any Debt outstanding or is otherwise liable
for any Debt or has a negative Net Worth, then immediately after giving pro
forma effect to such designation, such Person could incur
33
40
at least $1.00 of additional Debt pursuant to the provisions described in
Section 4.11 (assuming, for purposes of this calculation, that each dollar of
negative Net Worth is equal to one dollar of Debt), (b) all Debt of such
Unrestricted Subsidiary shall be deemed to be incurred by a Subsidiary of the
Person on the date such Unrestricted Subsidiary becomes a Subsidiary, and (c)
no Default or Event of Default would occur or be continuing after giving effect
to such designation. Any subsidiary of an Unrestricted Subsidiary shall be an
Unrestricted Subsidiary for purposes of this Indenture. Notwithstanding the
foregoing TransTexas Exploration Corporation shall be deemed to be an
Unrestricted Subsidiary of TransTexas.
"Unrestricted Subsidiary Debt" means, as to any Unrestricted
Subsidiary of any Person, Debt of such Unrestricted Subsidiary (i) as to
which neither such Person nor any Subsidiary of such Person is directly or
indirectly liable (by virtue of such Person or any such Subsidiary being the
primary obligor on, guarantor of, or otherwise liable in any respect to, such
Debt), unless such liability constitutes Unrestricted Non-Recourse Debt and
(ii) which, upon the occurrence of a default with respect thereto, does not
result in, or permit any holder (other than the Company or any Subsidiary of
the Company) of any Debt of such Person or any Subsidiary of such Person to
declare, a default on such Debt of such Person or any Subsidiary of such Person
or cause the payment thereof to be accelerated or payable prior to its stated
maturity, unless, in the case of this clause (ii), such Debt constitutes
Unrestricted Non-Recourse Debt.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Value" means, as of any date, (a) when used with respect to Senior
Secured Discount Notes prior to June 15, 1999, the Accreted Value of such
Senior Secured Discount Notes, and (b) when used with respect to (i) Senior
Secured Discount Notes on or after June 15, 1999 or (ii) Senior Secured Notes,
the outstanding principal amount of such Notes, plus all accrued and unpaid
interest thereon.
"Vehicles" means all trucks, automobiles, trailers and other vehicles
covered by a certificate of title.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" means Capital Stock of a Person having generally the
right to vote in the election of directors of such Person.
"Weighted Average Life" means, as of the date of determination, with
respect to any debt instrument, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such debt instrument
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
Section 2 Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, such provision is incorporated by reference
in and made a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
34
41
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Notes means the Company and any other obligor on the
Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 3 Rules of Construction. Unless the context otherwise
requires:
(l) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless
stated otherwise.
ARTICLE II
THE NOTES
Section 1 Form and Dating. The Senior Secured Notes and the
Trustee's certificate of authentication, in respect thereof, shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Senior Secured Discount Notes and the
Trustee's certificate of authentication, in respect thereof, shall be
substantially in the form of Exhibit B hereto, the terms of which are
incorporated in and made a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Notes and any
notation, legend or endorsement on them. Any such notations,
35
42
legends or endorsements not contained in the forms of Note attached as Exhibit
A or Exhibit B hereto shall be delivered in writing to the Trustee. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the forms of Note shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. In the event of any inconsistency between the Notes and this
Indenture, this Indenture controls.
The Senior Secured Notes will be issued (i) in global form (the
"Global Senior Secured Note"), substantially in the form of Exhibit A attached
hereto (including the text referred to in footnotes 1 and 2 thereto) and (ii)
in definitive form (the "Definitive Senior Secured Notes"), substantially in
the form of Exhibit A attached hereto (excluding the text referred to in
footnotes 1 and 2 thereto). The Global Senior Secured Note shall represent the
aggregate amount of outstanding Senior Secured Notes from time to time endorsed
thereon; provided, that the aggregate amount of outstanding Senior Secured
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the
Global Senior Secured Note to reflect the amount of any increase or decrease in
the amount of outstanding Senior Secured Notes represented thereby shall be
made by the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
The Senior Secured Discount Notes will be issued (i) in global form
(the "Global Senior Secured Discount Note"), substantially in the form of
Exhibit B attached hereto (including the text referred to in footnotes 1 and 2
thereto) and (ii) in definitive form (the "Definitive Senior Secured Notes"),
substantially in the form of Exhibit B attached hereto (excluding the text
referred to in footnotes 1 and 2 thereto). The Global Senior Secured Discount
Note shall represent the aggregate amount of outstanding Notes from time to
time endorsed thereon; provided, that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the
Global Senior Secured Discount Note to reflect the amount of any increase or
decrease in the amount of outstanding Senior Secured Discount Notes represented
thereby shall be made by the Trustee, in accordance with instructions given by
the Holder thereof as required by Section 2.6 hereof.
Section 2 Execution and Authentication. Two Officers shall sign,
or one Officer shall sign and one Officer or any Assistant Secretary shall
attest to, the Notes for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Notes and may be in facsimile form.
If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note but such signature
shall be conclusive evidence that the Note has been authenticated pursuant to
the terms of this Indenture.
The Trustee shall authenticate Senior Secured Notes for original issue
in the aggregate principal amount of up to $475,000,000, and Senior Secured
Discount Notes for original issue in the aggregate principal amount of up to
$1,130,000,000, upon a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated. The
aggregate principal amount of Senior Secured Notes
36
43
outstanding at any time may not exceed $475,000,000, and the aggregate
principal amount of Senior Secured Discount Notes outstanding at any time may
not exceed $1,130,000,000, except as provided in Section 2.7. Upon the written
order of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Notes in substitution of Notes originally issued to reflect any
name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in the appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
an Agent to deal with any Obligor, any Affiliate of any Obligor, or any of
their respective Subsidiaries.
Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Section 3 Registrar and Paying Agent. The Company shall maintain
an office or agency in the Borough of Manhattan in the City of New York, New
York, where Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency in the Borough of Manhattan in the City
of New York, New York, where Notes may be presented for payment ("Paying
Agent"). Notices and demands to or upon the Company in respect of the Notes
may be served as is provided in Section 13.2. The Company or any Affiliate of
the Company may act as Registrar or Paying Agent, except that, for the purposes
of Articles III, VIII and XI and Sections 4.14 and 4.16, neither the Company
nor any Affiliate of the Company shall act as Paying Agent. The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-Registrars and one or more additional Paying
Agents. The term "Paying Agent" includes any additional Paying Agent. The
Company hereby initially appoints the Trustee as Registrar and Paying Agent,
and the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee in writing in advance of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
The Company initially appoints DTC to act as Depository with respect
to the Global Notes. The Trustee shall act as custodian for the Depository
with respect to the Global Notes.
Section 4 Paying Agent to Hold Assets in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that each
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
assets held by the Paying Agent for the payment of principal of, or interest
on, the Notes (whether such assets have been distributed to it by the Company
or any other obligor on the Notes), and shall notify the Trustee in writing of
any Default in making any such payment. If the Company or any Affiliate of the
Company acts as Paying Agent, it shall segregate such assets and hold them as a
separate trust fund for the benefit of the Holders or the Trustee. The Company
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed and the Trustee may at any
time during the continuance of any payment Default, upon written request to a
Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to
the Trustee of all assets that shall have been delivered by the
37
44
Company to the Paying Agent, the Paying Agent (if other than the Company, or
any Affiliate of the Company) shall have no further liability for such assets.
Section 5 Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee on or before the third Business Day
preceding each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee
reasonably may require of the names and addresses of Holders.
Section 6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Senior Secured Notes. When
Definitive Senior Secured Notes are presented by a Holder to the Registrar with
a request (1) to register the transfer of the Definitive Senior Secured Notes
or (2) to exchange such Definitive Senior Secured Notes for an equal principal
amount of Definitive Senior Secured Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, that the Definitive
Senior Secured Notes so presented (A) have been duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing; and (B)
in the case of a Restricted Senior Secured Note, such request shall be
accompanied by the following additional documents:
(i) if such Restricted Senior Secured Note is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification to that effect (in substantially
the form of Exhibit C attached hereto); or
(ii) if such Restricted Senior Secured Note is being
transferred to a QIB in accordance with Rule 144A or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of Exhibit C
attached hereto); or
(iii) if such Restricted Senior Secured Note is being transferred
in reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit C attached hereto) and an opinion of counsel
reasonably acceptable to the Company and the Registrar to the effect
that such transfer is in compliance with the Securities Act.
(b) Transfer of a Definitive Senior Secured Note for a Beneficial
Interest in a Global Senior Secured Note. A Definitive Senior Secured Note may
be exchanged for a beneficial interest in a Global Senior Secured Note only
upon receipt by the Trustee of a Definitive Senior Secured Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) written instructions directing the Trustee to make an
endorsement on the Global Senior Secured Note to reflect an increase
in the aggregate principal amount of the Senior Secured Notes
represented by the Global Senior Secured Note, and
(ii) if such Definitive Senior Secured Note is a Restricted
Senior Secured Note, a certification (in substantially the form of
Exhibit C attached hereto) to the effect that
38
45
such Definitive Senior Secured Note is being transferred to a QIB in
accordance with Rule 144A;
in which case the Trustee shall cancel such Definitive Senior Secured Note and
cause the aggregate principal amount of Senior Secured Notes represented by the
Global Senior Secured Note to be increased accordingly. If no Global Senior
Secured Note is then outstanding, the Company shall issue and the Trustee shall
authenticate a new Global Senior Secured Note in the appropriate principal
amount.
(c) Transfer and Exchange of Global Senior Secured Notes. The
transfer and exchange of Global Senior Secured Notes or beneficial interests
therein shall be effected through the Depository in accordance with this
Indenture and the procedures of the Depository therefor, which shall include
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Senior Secured Note
for a Definitive Senior Secured Note. Upon receipt by the Trustee of written
transfer instructions (or such other form of instructions as is customary for
the Depository), from the Depository (or its nominee) on behalf of any Person
having a beneficial interest in a Global Senior Secured Note, the Trustee
shall, in accordance with the standing instructions and procedures existing
between the Depository and the Trustee, cause the aggregate principal amount of
Global Senior Secured Notes to be reduced accordingly and, following such
reduction, the Company shall execute and the Trustee shall authenticate and
make available for delivery to the transferee a Definitive Senior Secured Note
in the appropriate principal amount; provided, that in the case of a Restricted
Senior Secured Note, such instructions shall be accompanied by the following
additional documents:
(i) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit
C attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit C attached hereto); or
(iii) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit C attached hereto) and, if the Trustee deems it
appropriate, an opinion of counsel reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act.
Definitive Senior Secured Notes issued in exchange for a beneficial
interest in a Global Senior Secured Note shall be registered in such names and
in such authorized denominations as the Depository shall instruct the Trustee.
(e) Transfer and Exchange of Global Senior Secured Notes.
Notwithstanding any other provision of this Indenture, the Global Senior
Secured Note may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository; provided,
that if:
39
46
(i) the Depository notifies the Company that the Depository is
unwilling or unable to continue as Depository and a successor
Depository is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Senior
Secured Notes under this Indenture,
then the Company shall execute and the Trustee shall authenticate and make
available for delivery, Definitive Senior Secured Notes in an aggregate
principal amount equal to the aggregate principal amount of the Global Senior
Secured Note in exchange for such Global Senior Secured Note.
(f) Cancellation and/or Adjustment of Global Senior Secured Notes.
At such time as all beneficial interests in the Global Senior Secured Note have
either been exchanged for Definitive Senior Secured Notes, redeemed,
repurchased or cancelled, the Global Senior Secured Note shall be returned to
or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in the Global Senior Secured Note is
exchanged for Definitive Senior Secured Notes, redeemed, repurchased or
cancelled, the aggregate principal amount of Senior Secured Notes represented
by such Global Senior Secured Note shall be reduced accordingly and an
endorsement shall be made on such Global Senior Secured Note by the Trustee to
reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges of Senior
Secured Notes. To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Senior Secured
Notes and Global Senior Secured Notes at the Registrar's request. All
Definitive Senior Secured Notes and Global Senior Secured Notes issued upon any
registration of transfer or exchange of Definitive Senior Secured Notes or
Global Senior Secured Notes shall be legal, valid and binding obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Definitive Senior Secured Notes or Global Senior Secured
Notes surrendered upon such registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.1, 4.14, 4.21, 4.24, Article XI and 9.5 of this Indenture).
The Company shall not be required to (i) issue, register the transfer
of or exchange Senior Secured Notes during a period beginning at the opening of
business 15 days before the day of any selection of Senior Secured Notes for
redemption under Section 3.2 hereof and ending at the close of business on the
day of selection; or (ii) register the transfer of or exchange any Senior
Secured Note so selected for redemption in whole or in part, except the
unredeemed portion of any Senior Secured Note being redeemed in part; or (iii)
register the transfer of or exchange a Senior Secured Note between a record
date and the next succeeding interest payment date.
Prior to due presentment for the registration of a transfer of any
Senior Secured Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Senior Secured Note is registered as the absolute
owner of such Senior Secured Note for all purposes, and neither the Trustee,
any Agent nor the Company shall be affected by notice to the contrary.
40
47
(h) Exchange of Series A Senior Secured Notes for Series B Senior
Secured Notes. The Series A Senior Secured Notes may be exchanged for Series B
Senior Secured Notes pursuant to the terms of the Exchange Offer. The Trustee
and Registrar shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Senior Secured Notes, the
transactions contemplated by the Exchange Offer have been
consummated; and
(B) the principal amount of Series A Senior Secured Notes properly
tendered in the Exchange Offer that are represented by a
Global Senior Secured Note and the principal amount of Series
A Senior Secured Notes properly tendered in the Exchange Offer
that are represented by Definitive Senior Secured Notes, the
name of each Holder of such Definitive Senior Secured Notes,
the principal amount at maturity properly tendered in the
Exchange Offer by each such Holder and the name and address to
which Definitive Senior Secured Notes for Series B Senior
Secured Notes shall be registered and sent for each such
Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Senior Secured Notes
have been registered under Section 5 of the Securities Act and this Indenture
has been qualified under the TIA and (y) with respect to the matters set forth
in Section 6 of the Registration Rights Agreement and (iii) a Company Order,
shall authenticate (A) a Global Senior Secured Note for Series B Senior Secured
Notes in an aggregate principal amount equal to the aggregate principal amount
of Series A Senior Secured Notes represented by a Global Senior Secured Note
indicated in such Officers' Certificate as having been properly tendered and
(B) Definitive Senior Secured Notes representing Series B Senior Secured Notes
registered in the names of, and in the principal amounts indicated in such
Officers' Certificate.
If the principal amount at maturity of the Global Senior Secured Note
for the Series B Senior Secured Notes is less than the principal amount at
maturity of the Global Senior Secured Note for the Series A Senior Secured
Notes, the Trustee shall make an endorsement on such Global Senior Secured Note
for Series A Senior Secured Notes indicating a reduction in the principal
amount at maturity represented thereby.
The Trustee shall deliver such Definitive Senior Secured Notes for
Series B Senior Secured Notes to the Holders thereof as indicated in such
Officers' Certificate.
(i) Transfer and Exchange of Definitive Senior Secured Discount
Notes. When Definitive Senior Secured Discount Notes are presented by a Holder
to the Registrar with a request (1) to register the transfer of the Definitive
Senior Secured Discount Notes or (2) to exchange such Definitive Senior Secured
Discount Notes for an equal principal amount of Definitive Senior Secured
Discount Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met; provided, that the Definitive Senior Secured Discount
Notes so presented (A) have been duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing; and (B) in the case
of a Restricted Senior Secured Discount Note, such request shall be accompanied
by the following additional documents:
41
48
(i) if such Restricted Senior Secured Discount Note is being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification to that effect (in
substantially the form of Exhibit D attached hereto); or
(ii) if such Restricted Senior Secured Discount Note is being
transferred to a QIB in accordance with Rule 144A or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of Exhibit D
attached hereto); or
(iii) if such Restricted Senior Secured Discount Note is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect
(in substantially the form of Exhibit D attached hereto) and an
opinion of counsel reasonably acceptable to the Company and the
Registrar to the effect that such transfer is in compliance with the
Securities Act.
(j) Transfer of a Definitive Senior Secured Discount Note for a
Beneficial Interest in a Global Senior Secured Discount Note. A Definitive
Senior Secured Discount Note may be exchanged for a beneficial interest in a
Global Senior Secured Discount Note only upon receipt by the Trustee of a
Definitive Senior Secured Discount Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) written instructions directing the Trustee to make an
endorsement on the Global Senior Secured Discount Note to reflect an
increase in the aggregate principal amount of the Senior Secured
Discount Notes represented by the Global Senior Secured Discount Note,
and
(ii) if such Definitive Senior Secured Discount Note is a
Restricted Senior Secured Discount Note, a certification (in
substantially the form of Exhibit D attached hereto) to the effect
that such Definitive Senior Secured Discount Note is being transferred
to a QIB in accordance with Rule 144A;
in which case the Trustee shall cancel such Definitive Senior Secured Discount
Note and cause the aggregate principal amount of Senior Secured Discount Notes
represented by the Global Senior Secured Discount Note to be increased
accordingly. If no Global Senior Secured Discount Note is then outstanding,
the Company shall issue and the Trustee shall authenticate a new Global Senior
Secured Discount Note in the appropriate principal amount.
(k) Transfer and Exchange of Global Senior Secured Discount Notes.
The transfer and exchange of Global Senior Secured Discount Notes or beneficial
interests therein shall be effected through the Depository in accordance with
this Indenture and the procedures of the Depository therefor, which shall
include restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act.
(l) Transfer of a Beneficial Interest in a Global Senior Secured
Discount Note for a Definitive Senior Secured Discount Note. Upon receipt by
the Trustee of written transfer instructions (or such other form of
instructions as is customary for the Depository), from the Depository (or its
nominee) on behalf of any Person having a beneficial interest in a Global
Senior Secured Discount Note, the Trustee shall, in accordance with the
standing instructions and procedures existing between the Depository and the
Trustee,
42
49
cause the aggregate principal amount of Global Senior Secured Discount Notes to
be reduced accordingly and, following such reduction, the Company shall execute
and the Trustee shall authenticate and make available for delivery to the
transferee a Definitive Senior Secured Discount Note in the appropriate
principal amount; provided, that in the case of a Restricted Security, such
instructions shall be accompanied by the following additional documents:
(i) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit D
attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit D attached hereto); or
(iii) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit D attached hereto) and, if the Trustee deems it
appropriate, an opinion of counsel reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act.
Definitive Senior Secured Discount Notes issued in exchange for a
beneficial interest in a Global Senior Secured Discount Note shall be
registered in such names and in such authorized denominations as the Depository
shall instruct the Trustee.
(m) Transfer and Exchange of Global Senior Secured Discount Notes.
Notwithstanding any other provision of this Indenture, the Global Senior
Secured Discount Note may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository; provided, that if:
(i) the Depository notifies the Company that the Depository
is unwilling or unable to continue as Depository and a successor
Depository is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Senior
Secured Discount Notes under this Indenture,
then the Company shall execute and the Trustee shall authenticate and make
available for delivery, Definitive Senior Secured Discount Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Global Senior Secured Discount Note in exchange for such Global Senior Secured
Discount Note.
(n) Cancellation and/or Adjustment of Global Senior Secured Discount
Notes. At such time as all beneficial interests in the Global Senior Secured
Discount Note have either been exchanged for Definitive Senior Secured Discount
Notes, redeemed, repurchased or cancelled, the Global Senior Secured Discount
Note shall be returned to or retained and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in the Global
Senior Secured Discount Note is exchanged for Defini-
43
50
tive Senior Secured Discount Notes, redeemed, repurchased or cancelled, the
aggregate principal amount of Senior Secured Discount Notes represented by such
Global Senior Secured Discount Note shall be reduced accordingly and an
endorsement shall be made on such Global Senior Secured Discount Note by the
Trustee to reflect such reduction.
(o) General Provisions Relating to Transfers and Exchanges of Senior
Secured Discount Notes. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive Senior
Secured Discount Notes and Global Senior Secured Discount Notes at the
Registrar's request. All Definitive Senior Secured Discount Notes and Global
Senior Secured Discount Notes issued upon any registration of transfer or
exchange of Definitive Senior Secured Discount Notes or Global Senior Secured
Discount Notes shall be legal, valid and binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Definitive Senior Secured Discount Notes or Global Senior
Secured Discount Notes surrendered upon such registration of transfer or
exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another person) pursuant to Sections
2.10, 3.7, 4.10, 4.14, 4.21, 4.24 and 9.5 of this Indenture).
The Company shall not be required to (i) issue, register the transfer
of or exchange Senior Secured Discount Notes during a period beginning at the
opening of business 15 days before the day of any selection of Senior Secured
Discount Notes for redemption under Section 3.2 hereof and ending at the close
of business on the day of selection; or (ii) register the transfer of or
exchange any Senior Secured Discount Note so selected for redemption in whole
or in part, except the unredeemed portion of any Senior Secured Discount Note
being redeemed in part; or (iii) register the transfer of or exchange a Senior
Secured Discount Note between a record date and the next succeeding interest
payment date.
Prior to due presentment for the registration of a transfer of any
Senior Secured Discount Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Senior Secured Discount Note is
registered as the absolute owner of such Senior Secured Discount Note for all
purposes, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(p) Exchange of Series A Senior Secured Discount Notes for Series B
Senior Secured Discount Notes. The Series A Senior Secured Discount Notes may
be exchanged for Series B Senior Secured Discount Notes pursuant to the terms
of the Exchange Offer. The Trustee and Registrar shall make the exchange as
follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Senior Secured Discount Notes,
the transactions contemplated by the Exchange Offer have been
consummated; and
(B) the principal amount of Series A Senior Secured Discount Notes
properly tendered in the Exchange Offer that are represented
by a Global Senior Secured Discount Note and the principal
amount of Series A Senior Secured Discount Notes properly
tendered in the Exchange Offer that are represented by
Definitive Senior Secured Discount Notes, the name
44
51
of each Holder of such Definitive Senior Secured Discount
Notes, the principal amount at maturity properly tendered in
the Exchange Offer by each such Holder and the name and
address to which Definitive Senior Secured Discount Notes for
Series B Senior Secured Discount Notes shall be registered and
sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Senior Secured Discount
Notes have been registered under Section 5 of the Securities Act and this
Indenture has been qualified under the TIA and (y) with respect to the matters
set forth in Section 6 of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Senior Secured Discount Note for Series
B Senior Secured Discount Notes in an aggregate principal amount equal to the
aggregate principal amount of Series A Senior Secured Discount Notes
represented by a Global Senior Secured Discount Note indicated in such
Officers' Certificate as having been properly tendered and (B) Definitive
Senior Secured Discount Notes representing Series B Senior Secured Discount
Notes registered in the names of, and in the principal amounts indicated in
such Officers' Certificate.
If the principal amount at maturity of the Global Senior Secured
Discount Note for the Series B Senior Secured Discount Notes is less than the
principal amount at maturity of the Global Senior Secured Discount Note for the
Series A Senior Secured Discount Notes, the Trustee shall make an endorsement
on such Global Senior Secured Discount Note for Series A Senior Secured
Discount Notes indicating a reduction in the principal amount at maturity
represented thereby.
The Trustee shall deliver such Definitive Senior Secured Discount
Notes for Series B Senior Secured Discount Notes to the Holders thereof as
indicated in such Officers' Certificate.
Section 7 Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder of a Note claims and submits an affidavit or other
evidence, satisfactory to the Company and Trustee, to the Trustee to the effect
that the Note has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Note is replaced. The
Company and the Trustee may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
Section 8 Outstanding Notes. Notes outstanding at any time are all
the Notes that have been authenticated by the Trustee except those cancelled by
it, those delivered to it for cancellation, those reductions in the interest in
a Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.8 as not outstanding. A Note does not
cease to be outstanding because the Company or an Affiliate of the Company
holds the Note, except as provided in Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds U.S. Legal Tender or
U.S. Government Obligations sufficient to pay all
45
52
of the principal and interest due on the Notes payable on that date, then on
and after that date such Notes cease to be outstanding and interest on them
ceases to accrue.
Section 9 Treasury Notes. In determining whether the Holders of
the required Value of Notes have concurred in any direction, amendment,
supplement, waiver or consent, Notes owned by the Company and Affiliates of the
Company shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
amendment, supplement, waiver or consent, only Notes that the Trustee knows or
has reason to know are so owned shall be disregarded.
Section 10 Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as permanent Notes
authenticated and delivered hereunder.
Section 11 Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or any Affiliate of the Company, and no
one else, shall cancel and, at the written direction of the Company, shall
dispose of all Notes surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Notes to
replace Notes it has paid or delivered to the Trustee for cancellation. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section 2.11, except as expressly permitted in the forms of
Note and as permitted by this Indenture.
Section 12 Defaulted Interest. Interest on any outstanding Note
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the person in whose name that Note (or one or
more predecessor Notes) is registered at the close of business on the Record
Date for such interest.
Any interest on any outstanding Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Notes (or their respective
predecessor Notes) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as provided in this clause (1). Thereupon
the Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less
46
53
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address set forth upon the registry books of the Company on the 10th day prior
to such Special Record Date. The Trustee may, in its discretion, in the name
and at the expense of the Company, cause a similar notice to be published at
least once in a newspaper, customarily published in the English language on
each Business Day and of general circulation in the Borough of Manhattan, The
City of New York, but such publication shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the persons in
whose names the Notes (or their respective predecessor Notes) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause accompanied by an
Opinion of Counsel stating that the manner of payment complies with this
clause, such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon transfer of or in exchange for or in lieu
of any other Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.
Section 13 Computation of Interest. Interest on the Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Section 14 Legends.
(a) Except as permitted by subsections (b) or (c) hereof, each Note
shall bear legends relating to restrictions on transfer pursuant to the
securities laws in substantially the form set forth on Exhibit A or Exhibit B
attached hereto, as applicable.
(b) Upon any sale or transfer of a Restricted Note (including any
Restricted Note represented by a Global Note) pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act:
(i) in the case of any Restricted Note that is a Definitive
Note, the Registrar shall permit the Holder thereof to exchange such
Restricted Note for a Definitive Note that does not bear the legends
required by subsection (a) above; and
(ii) in the case of any Restricted Note represented by a Global
Note, such Restricted Note shall not be required to bear the legends
required by subsection (a) above, but shall continue to be subject to
the provisions of Section 2.6(c) or (k), as applicable, hereof;
provided, that with respect to any request for an exchange of a
Restricted Note that is represented by a Global Note for a Definitive
Note that does not bear the legends required by subsection (a) above,
which request is made in reliance upon
47
54
Rule 144, the Holder thereof shall certify in writing to the Registrar
that such request is being made pursuant to Rule 144.
(c) The Company shall issue and the Trustee shall authenticate Series
B Senior Secured Notes in exchange for Series A Senior Secured Notes and Series
B Senior Secured Discount Notes for Series A Senior Secured Discount Notes
accepted for exchange in the Exchange Offer. The Series B Senior Secured Notes
and the Series B Senior Secured Discount Notes shall not bear the legends
required by subsection (a) above unless the Holder of such Series B Senior
Secured Notes or Series B Senior Secured Discount Notes is either (A) a
broker-dealer who purchased such Series B Senior Secured Notes or Series B
Senior Secured Discount Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (B) a
Person participating in the distribution of the Series B Senior Secured Notes
or Series B Senior Secured Discount Notes or (C) a Person who is an affiliate
(as defined in Rule 144A) of the Company.
ARTICLE III
REDEMPTION
Section 1 Right of Redemption. Redemption of Notes, as permitted
or required by any provision of this Indenture, shall be made in accordance
with such provision and this Article III. The Company may redeem at its
election, with the net proceeds of any Public Equity Offering, at any time on
or after the Issue Date and before June 15, 2000, up to 35% of the aggregate
principal amount of the Senior Secured Notes and up to 35% of the Accreted
Value of the Senior Secured Discount Notes, in each case, in cash at the
applicable Redemption Prices specified in Paragraph 5 of the forms of Note
attached as Exhibit A and Exhibit B hereto, set forth therein under the caption
"Optional Redemption," in each case, including accrued and unpaid interest, if
any, to the Redemption Date. The Notes may be redeemed at the election of the
Company, as a whole or from time to time in part, at any time on or after June
15, 2000, at the applicable Redemption Prices specified in Paragraph 5 of the
forms of Note attached as Exhibit A and Exhibit B hereto, set forth therein
under the caption "Optional Redemption," in each case, including accrued and
unpaid interest to the Redemption Date.
Section 2 Notices to Trustee. If the Company elects to redeem
Notes pursuant to Paragraph 5 of the Notes, it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Notes to be redeemed
and whether it wants the Trustee to give notice of redemption to the Holders.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 30 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
Section 3 Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed pursuant to Paragraph 5 thereof, the Company may
elect to redeem from either the Senior Secured Notes or the Senior Secured
Discount Notes or a combination thereof, and the Trustee shall select the Notes
to be redeemed from within the Senior Secured Notes or the Senior Secured
Discount Notes, pro rata, by lot or in such other manner as in its sole
discretion it deems appropriate and fair, and in such manner as complies with
any applicable legal and stock exchange requirements.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and,
48
55
in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes in denominations of $1,000 may be redeemed only
in whole. The Trustee may select for redemption portions (equal to $1,000 or
any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
Section 4 Notice of Redemption. At least 15 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first class mail, postage prepaid, to the Trustee and each Holder whose
Notes are to be redeemed. At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense. The
date fixed for redemption contained in any notice of redemption and the
obligation of the Company to redeem any Notes upon such date may be subject to
the satisfaction or waiver of conditions determined by the Company in its sole
discretion. Each notice for redemption shall identify the Notes to be redeemed
and shall state the following and such other matters as the Trustee shall deem
proper:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued
and unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying
Agent;
(4) that Notes called for redemption must be surrendered
to the Paying Agent at the address specified in such
notice to collect the Redemption Price;
(5) that, unless the Company defaults in its obligation
to deposit U.S. Legal Tender with the Paying Agent in
accordance with Section 3.6, interest on Notes called
for redemption ceases to accrue and/or the original
issue discount ceases to accrete on Notes called for
redemption on and after the Redemption Date and the
only remaining right of the Holders of such Notes is
to receive payment of the Redemption Price, including
accrued and unpaid interest, upon surrender to the
Paying Agent of the Notes called for redemption and
to be redeemed;
(6) if any Note is being redeemed in part, the portion of
the principal amount, equal to $1,000 or any integral
multiple thereof, of such Note that will not be
redeemed and that, after the Redemption Date, and
upon surrender of such Note, a new Note or Notes in
aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(7) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate
principal amount of such Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding
after such partial redemption;
(8) the CUSIP number of the Notes to be redeemed; and
(9) that the notice is being sent pursuant to this
Section 3.4 and pursuant to the redemption provisions
of Paragraph 5 of the Notes.
49
56
Section 5 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.4, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price, including accrued and unpaid interest. Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at the Redemption
Price, including interest, if any, accrued and unpaid on the Redemption Date;
provided that if the Redemption Date is after a regular Record Date and on or
prior to the Interest Payment Date, the accrued interest through the date of
redemption shall be payable to the Holder of the redeemed Notes registered on
the relevant Record Date; and provided, further, that if a Redemption Date is a
Legal Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
Upon compliance by the Company with the provisions of this Article
III, including but not limited to Section 3.6, and upon satisfaction or waiver
of any conditions precedent to the Company's obligation to effect such
redemption contained in the related notice of redemption, interest on the Notes
called for redemption will cease to accrue, and/or the original issue discount
will cease to accrete on the Notes called for redemption, on and after the
Redemption Date, regardless of whether such Notes are presented for payment.
Section 6 Deposit of Redemption Price. On or prior to the
Redemption Date, the Company shall deposit with the Paying Agent (other than
the Company or an Affiliate of the Company) U.S. Legal Tender sufficient to pay
the Redemption Price of, including accrued and unpaid interest on, all Notes to
be redeemed on such Redemption Date (other than Notes or portions thereof
called for redemption on that date that have been delivered by the Company to
the Trustee for cancellation). The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited which is not required for that
purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III, interest on the Notes to be redeemed will cease
to accrue on the applicable Redemption Date, and/or the original issue discount
will cease to accrete on the Notes to be redeemed on the applicable Redemption
Date, regardless of whether such Notes are presented for payment.
Notwithstanding anything herein to the contrary, if any Note surrendered for
redemption in the manner provided in the Notes shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall continue to accrue and be paid from the
Redemption Date until such payment is made on the unpaid principal and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate and in the manner provided in Section 4.1 and the Note.
Section 7 Notes Redeemed in Part. Upon surrender of a Note that is
to be redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge, a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE IV
COVENANTS
Section 1 Payment of Notes. The Company shall pay the principal of
and interest on the outstanding Notes on the dates and in the manner provided
in the Notes to the Trustee at its New York agent's office unless otherwise
instructed in writing by the Trustee. An installment of principal of or
interest on the Notes shall be considered paid on the date it is due if the
Trustee or Paying Agent (other
50
57
than the Company or an Affiliate of the Company) holds for the benefit of the
Holders, on or before 11:00 a.m. Houston, Texas time on that date, U.S. Legal
Tender deposited and designated for and sufficient to pay the installment. The
Company shall pay any and all amounts, including without limitation, Liquidated
Damages, if any, on the dates and in the manner required under the Registration
Rights Agreement.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded
semi-annually, to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company or the Trustee may, to the extent required by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal, premium or interest payments on the Notes.
Section 2 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan in the City of New York, New York, an
office or agency where Notes may be presented or surrendered for payment, where
Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prior written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan in the City of New York, New York, for such purposes. The
Company shall give prior written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. The Company hereby initially designates the corporate trust office of
the Trustee in the Borough of Manhattan in the City of New York, New York, as
such office of the Company.
Section 3 Limitation on Restricted Payments. The Company shall
not, and shall not permit any of its Subsidiaries (other than any of the
TTXD Entities after the TTXD Spin-off) to, directly or indirectly, make any
dividend or other distribution on shares of Capital Stock of the Company or any
Subsidiary of the Company or make any payment on account of the purchase,
redemption, or other acquisition or retirement for value of any such shares of
Capital Stock (except (x) to TransTexas by any of its Subsidiaries or (y) to
TARC by any of its Subsidiaries) unless such dividends, distributions, or
payments are made in cash or Capital Stock or a combination thereof (other than
the TTXD Spin-off or a dividend of the common stock of TransTexas by TARC to
the Company). In addition, the Company shall not, and shall not permit any of
its Subsidiaries (other than any of the TTXD Entities after the TTXD Spin-off)
to, directly or indirectly, make any Restricted Payment; provided, however,
that TransTexas or TARC may make a Restricted Payment if, at the time or after
giving effect thereto on a pro forma basis no Default or Event of Default would
occur or be continuing, and:
(i) in the case of Restricted Payments by TransTexas:
(a) the Consolidated Fixed Charge Coverage Ratio of TransTexas
exceeds 2.25 to 1;
51
58
(b) TransTexas' Adjusted Consolidated Tangible Assets are
equal to or greater than 150% of the total consolidated principal amount or
accreted value, as the case may be, of Debt of TransTexas and its Subsidiaries
(excluding, for purposes of the calculation of Debt, any Swap Obligations); and
(c) the aggregate amount of all Restricted Payments made by
TransTexas and its Subsidiaries, including such proposed Restricted Payment and
all payments that may be made pursuant to the proviso at the end of this
sentence (if not made in cash, then the fair market value of any property used
therefor) from and after the Issue Date and on or prior to the date of such
Restricted Payment, would not exceed the sum of (x) 25% of Adjusted
Consolidated Net Income of TransTexas accrued for the period (taken as one
accounting period), commencing with the first full fiscal quarter that
commenced after the Issue Date, to and including the fiscal quarter ended
immediately prior to the date of each calculation (or, in the event Adjusted
Consolidated Net Income for such period is a deficit, then minus 100% of such
deficit), minus (y) 100% of the amount of any write-downs, write-offs, other
negative revaluations, and other negative extraordinary charges not otherwise
reflected in Adjusted Consolidated Net Income of TransTexas during such period,
plus (z) the aggregate Net Proceeds received by TransTexas from the issuance or
sale (other than to the Company or a Subsidiary of the Company) of its
Qualified Capital Stock from and after the Issue Date and on or prior to the
date of such Restricted Payment); or
(ii) in the case of Restricted Payments by TARC:
(a) TARC's Consolidated Fixed Charge Coverage Ratio exceeds
2.25 to 1; and
(b) the aggregate amount of all Restricted Payments made by
all of the TARC Entities, including such proposed Restricted Payment and all
payments that may be made pursuant to the proviso at the end of this sentence
(if not made in cash, then the fair market value of any property used
therefor), from and after the Issue Date and on or prior to the date of such
Restricted Payment, would not exceed an amount equal to (x) 25% of Adjusted
Consolidated Net Income of TARC accrued for the period (taken as one accounting
period) from the first full fiscal quarter that commenced after the Issue Date
to and including the fiscal quarter ended immediately prior to the date of each
calculation for which financial statements are available (or, if TARC's
Adjusted Consolidated Net Income for such period is a deficit, then minus 100%
of such deficit), plus (y) the aggregate Net Proceeds received by TARC from the
issuance or sale (other than to the Company or a Subsidiary of the Company) of
its Qualified Capital Stock from and after the Issue Date and on or prior to
the date of such Restricted Payment, minus (z) 100% of the amount of any
write-downs, write-offs, other negative revaluations, and other negative
extraordinary charges not otherwise reflected in TARC's Adjusted Consolidated
Net Income during such period; and
provided, that nothing in this Section 4.3 shall prohibit the payment
of any dividend within 60 days after the date of its declaration if such
dividend could have been made on the date of its declaration in compliance with
the foregoing provisions.
Section 4 Corporate Existence. Subject to Article V, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate or other existence
of each of its Subsidiaries in accordance with the respective organizational
documents of each of them and the rights (charter and statutory) and corporate
franchises of the Company and each of its Subsidiaries; provided, however, that
the Company shall not be required to preserve, with respect to itself, any
right or franchise, and with respect to any of its Subsidiaries, any such
existence, right or franchise, if (a) the Board of Directors of the Company
shall determine that the preservation thereof is no
52
59
longer desirable in the conduct of the business of the Company and (b) the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 5 Payment of Taxes and Other Claims. The Company shall,
and shall cause each of its Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or any of its Subsidiaries or any of their respective properties and assets;
provided, however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment or charge whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
Section 6 Maintenance of Properties and Insurance.
(a) Each of the Company and its Subsidiaries shall cause the
properties used or useful to the conduct of its business and the business of
each of its Subsidiaries to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
(b) Each of the Company and its Subsidiaries shall provide, or shall
cause to be provided, for itself and each of its Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds
that, in its reasonable, good faith opinion, are adequate and appropriate for
the conduct of its business and the business of such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as is customary, in its reasonable, good faith
opinion, and adequate and appropriate for the conduct of its business and the
business of its Subsidiaries in a prudent manner for companies engaged in a
similar business. In addition, all such insurance shall be payable to the
Trustee as loss payee under a "standard" or "Texas" loss payee clause. Without
limiting the foregoing, each of the Company and its Subsidiaries shall (i) keep
all of its physical property insured with hazard insurance on an "all risks"
basis, with broad form flood and earthquake coverages and electronic data
processing coverage, with a full replacement cost endorsement and an "agreed
amount" clause in an amount equal to 100% of the full replacement cost of such
property, (ii) maintain all such workers' compensation or similar insurance as
may be required by law and (iii) maintain, in amounts and with deductibles
equal to those generally maintained by businesses engaged in similar activities
in similar geographic areas, general public liability insurance against claims
of bodily injury, death or property damage occurring on, in or about the
properties of the Company and its Subsidiaries.
All policies of insurance shall provide for at least fifteen days'
prior written cancellation notice to the Trustee. In the event of failure by
the Company and its Subsidiaries to provide and maintain insurance as herein
provided, the Trustee may, at its option, provide such insurance and charge the
amount thereof to the Company and its Subsidiaries. The Company and its
Subsidiaries shall furnish the Trustee with certificates of insurance and
policies evidencing compliance with the foregoing insurance provision.
Section 7 Compliance Certificate; Notice of Default.
53
60
(a) The Company shall deliver to the Trustee within 60 days after the
end of each of its fiscal quarters, or 90 days after the end of a fiscal
quarter that is also the end of a fiscal year, an Officers' Certificate
complying with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
quarter has been made under the supervision of the signing Officers with a view
to determining whether the Company and its Subsidiaries have kept, observed,
performed and fulfilled its obligations (excluding those obligations addressed
by Section 12.3) under this Indenture and further stating, as to each such
Officer signing such certificate, regardless of whether the signer knows of any
failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture, or of the occurrence of any Default,
and, if such signor does know of such a failure to comply or Default, the
certificate shall describe such failure or Default with particularity.
(b) The Company shall deliver to the Trustee within 105 days after
the end of each of its fiscal years a written report of a firm of independent
certified public accountants with an established national reputation stating
that in conducting their audit for such fiscal year, nothing has come to their
attention that caused them to believe that the Company or any Subsidiary of the
Company was not in compliance with the provisions set forth in Section 4.3,
4.11 or 4.14.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, immediately upon becoming aware of any Default or Event
of Default under this Indenture, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto. The Trustee shall not be deemed to have
knowledge of a Default or an Event of Default unless one of its trust officers
receives notice of the Default giving rise thereto from the Company or any of
the Holders.
(d) The Company shall deliver to the Trustee an Officers' Certificate
specifying any changes in the composition of the Board of Directors of the
Company or any of its Subsidiaries or of any amendment to the charter or bylaws
of the Company or any of its Subsidiaries. The Officers' Certificate shall
include a description in reasonable detail of such amendment or change and an
explanation why such amendment or change does not constitute a Default or Event
of Default.
Section 8 SEC Reports. The Company shall deliver to the Trustee
and each Holder, within 15 days after it files the same with the SEC, copies of
all reports and information (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe), if any, which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company agrees to continue to be subject to and comply with
the filing and reporting requirements of the Commission as long as any of the
Notes are outstanding.
Concurrently with the reports delivered pursuant to the preceding
paragraph, the Company shall deliver to the Trustee and to each Holder annual
and quarterly financial statements with appropriate footnotes of the Company
and its Subsidiaries, all prepared and presented in a manner substantially
consistent with those of the Company required by the preceding paragraph. The
Company shall also comply with the other provisions of TIA Section 314(a).
So long as is required for an offer or sale of the Notes to qualify
for an exemption under Rule 144A, the Company shall, upon request, provide the
information required by clause (d)(4) thereunder to each Holder and to each
beneficial owner and prospective purchaser of Notes identified by any Holder of
Restricted Notes.
54
61
Section 9 Limitation on Status as Investment Company or Public
Utility Company. The Company shall not, and shall not permit any of its
Subsidiaries to, become an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or a "holding company," or "public
utility company" (as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended) or otherwise become subject to regulation
under the Investment Company Act or the Public Utility Holding Company Act.
Section 10 Limitation on Transactions with Related Persons.
(a) The Company shall not, and shall not permit any of its
Subsidiaries (other than any of the TTXD Entities after the date of the TTXD
Spin-off) to, enter directly or indirectly into, or permit to exist, any
transaction or series of related transactions with any Related Person
(excluding any Related Person which is a Related Person solely because the
party engaging in such transaction has the ability to control the Related
Person under the definition of "Control" contained within the definition of
"Related Person") (including, without limitation: (i) the sale, lease,
transfer or other disposition of properties, assets or securities to such
Related Person, (ii) the purchase or lease of any property, assets or
securities from such Related Person, (iii) an Investment in such Related Person
(excluding Investments permitted to be made pursuant to clauses (iii), (vi),
(viii), (x), (xii), (xiii), (xv), (xvi), (xvii), (xix), (xx), (xxii), (xxiii),
(xxiv) or (xxvi) of the definition of "Permitted Investment"), and (iv)
entering into or amending any contract or agreement with or for the benefit of
a Related Person (each, a "Related Person Transaction")), except for (A)
permitted Restricted Payments, including for this purpose the transactions
excluded from the definition of Restricted Payments by the proviso contained in
the definition of "Restricted Payments", (B) transactions made in good faith,
the terms of which are (x) fair and reasonable to the Company or such
Subsidiary, as the case may be, and (y) at least as favorable as the terms
which could be obtained by the Company or such Subsidiary, as the case may be,
in a comparable transaction made on an arm's length basis with Persons who are
not Related Persons, (C) transactions (w) between the Company and any of its
Wholly Owned Subsidiaries or transactions between Wholly Owned Subsidiaries of
the Company, (x) among the TTXD Entities, (y) among the TARC Entities, or (z)
among the TransTexas Entities, (D) transactions pursuant to the Services
Agreement, the Transfer Agreement, the Tax Allocation Agreement, the Gas
Purchase Agreement, the Drilling Agreement, the Intercompany Notes, the
Security Documents, and the Registration Rights Agreements (E) the lease of
office space to the Company or an Affiliate of the Company by TransAmerican or
an Affiliate of TransAmerican, provided that payments thereunder do not exceed
in the aggregate $2,000,000 per year, (F) any sale and leaseback or other
transfer of TransTexas' headquarters building located at 1300 North Sam Houston
Parkway East, Houston, Texas, (G) any employee compensation arrangement in an
amount which together with the amount of all other cash compensation paid to
such employee by the Company and its Subsidiaries does not provide for cash
compensation in excess of $2,000,000 in any fiscal year of the Company or any
Subsidiary and which has been approved by a majority of the Company's
Independent Directors and found in good faith by such directors to be in the
best interests of the Company or such Subsidiary, as the case may be, (H) loans
to TARC and TransTexas which are permitted to be Incurred pursuant to the terms
of Section 4.11; (I) the amounts payable by the Company and its Subsidiaries to
Southeast Contractors for employee services provided to TARC not exceeding the
actual costs to Southeast Contractors of the employees, which costs consist
solely of payroll and employee benefits, plus related administrative costs and
an administrative fee, not exceeding $2,000,000 per year in the aggregate; and
(J) the Company and its Subsidiaries may pay a management fee to TransAmerican
in an amount not to exceed $2,500,000 per year.
Notwithstanding the foregoing, the Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly (excluding clauses
(I) and (J) of Section 4.10(a)), loan or advance any funds to
55
62
John R. Stanley, and the aggregate amount of total compensation to John R.
Stanley shall not exceed (i) $1,000,000 per year in the aggregate from the
Company and TransTexas and (ii) following the Phase II Completion Date,
$1,000,000 from TARC.
(b) Without limiting the foregoing, except for sales of accounts
receivable to an Accounts Receivable Subsidiary in accordance with Section
4.20, (i) with respect to any Related Person Transaction or series of Related
Person Transactions (other than any Related Person Transaction described in
clause (A) (with respect to Permitted Restricted Payments by virtue of clauses
(i), (ii), (iv)-(xii), (xiv), (xv), (xvi) and (xvii) of the proviso contained
in the definition of "Restricted Payments"), (C), (D), (E), (F) or (H) of
Section 4.10(a)) with an aggregate value in excess of $1,000,000, such
transaction must first be approved by a majority of the Board of Directors of
the Company or its Subsidiary which is the transacting party and a majority of
the directors of such entity who are disinterested in the transaction pursuant
to a Board Resolution, as (x) fair and reasonable to the Company or such
Subsidiary, as the case may be, and (y) on terms which are at least as
favorable as the terms which could be obtained by the Company or such
Subsidiary, as the case may be, on an arm's length basis with Persons who are
not Related Persons, and (ii) with respect to any Related Person Transaction or
series of related Person Transactions (other than any Related Person
Transaction described in clause (A) (with respect to permitted Restricted
Payments by virtue of clauses (i), (ii), (iv)- (xii), (xiv), (xv), (xvi) and
(xvii) of the proviso contained in the definition of "Restricted Payments")
(C), (D), (E), (F), (G) or (H) of Section 4.10(a)) with an aggregate value in
excess of $5,000,000, the Company must first obtain a favorable written opinion
as to the fairness of such transaction to the Company or such Subsidiary, as
the case may be, from a financial point of view, from a "big 6 accounting firm"
or a nationally recognized investment banking firm; provided that such opinion
shall not be necessary if approval of the Board of Directors to such Related
Person Transaction has been obtained after receipt of bona fide bids of at
least two other independent parties and such Related Person Transaction is in
the ordinary course of business.
Section 11 Limitation on Incurrences of Additional Debt and
Issuances of Disqualified Capital Stock. Except as set forth in this Section
4.11, from and after the Issue Date, the Company shall not, and shall not
permit any of its Subsidiaries (other than any of the TTXD Entities after the
TTXD Spin-off) to, directly or indirectly, create, incur, assume, guarantee, or
otherwise become liable for, contingently or otherwise (to "Incur" or, as
appropriate, an "Incurrence"), any Debt or issue any Disqualified Capital
Stock, except:
(1) in the case of TransTexas or its Subsidiaries prior to
the earlier to occur of (x) the Phase I Completion Date or (y) the Notes being
rated "B2" or better by Moody's Investors Services, Inc. or "BB-" or better by
Standard and Poor's Corporation, Inc.:
(a) Debt evidenced by the TransTexas Intercompany Loan or the
Guarantees;
(b) Subordinated Debt of TransTexas solely to any wholly owned
Subsidiary of TransTexas, or Debt of any wholly owned Subsidiary of TransTexas
solely to TransTexas or to any wholly owned Subsidiary of TransTexas;
(c) Debt outstanding under a Revolving Credit Facility in an
aggregate principal amount not to exceed at any one time the greater of
$30,000,000 or the TransTexas Borrowing Base;
(d) Debt in an aggregate principal amount outstanding not to exceed
at any one time $35,000,000;
56
63
(e) Debt of TransTexas secured by a Permitted TransTexas Lien that
meets the requirements of clause (c), (d), (e), (i), (k), (l), (m), (o) or (r)
of the definition of "Permitted TransTexas Liens," to the extent that such
Liens would give rise to Debt under clauses (i), (ii), or (iii) of the
definition of "Debt";
(f) any guaranty of Debt permitted by clauses (c), (d), (e) or (g)
hereof, which guaranty is subordinated in right of payment to the TransTexas
Intercompany Loan to the same extent that the Debt permitted to be incurred
pursuant to such clauses would be required to be subordinated to the TransTexas
Intercompany Loan and which guaranty shall not be included in the determination
of the amount of Debt which may be Incurred pursuant to (c), (d), (e) or (g)
hereof;
(g) TransTexas may Incur Debt as an extension, renewal, replacement,
or refunding of any of the Debt permitted to be Incurred by clauses (m) or (o)
hereof, or this clause (g) (such Debt is collectively referred to as "Pre-Phase
I TransTexas Refinancing Debt"), provided, that (1) the maximum principal
amount of Pre-Phase I TransTexas Refinancing Debt (or, if such Pre-Phase I
TransTexas Refinancing Debt is issued with original issue discount, the
original issue price of such Pre-Phase I TransTexas Refinancing Debt) permitted
under this clause (g) may not exceed the lesser of (x) the principal amount of
the Debt being extended, renewed, replaced, or refunded plus reasonable
financing fees and other associated reasonable out-of-pocket expenses including
consent payments, premium, if any, and related fees, in each case other than
those paid to a Related Person (collectively, "Refinancing Fees"), or (y) if
such Debt being extended, renewed, replaced, or refunded was issued at an
original issue discount, the original issue price, plus amortization of the
original issue discount as of the time of the Incurrence of the Pre- Phase I
TransTexas Refinancing Debt plus Refinancing Fees, (2) the Pre-Phase I
TransTexas Refinancing Debt has a Weighted Average Life and a final maturity
that is equal to or greater than the Debt being extended, renewed, replaced, or
refunded at the time of such extension, renewal, replacement, or refunding and
(3) the Pre-Phase I TransTexas Refinancing Debt shall rank with respect to the
Notes and the TransTexas Intercompany Loan to an extent no less favorable in
respect thereof to the Holders than the Debt being refinanced;
(h) Debt represented by trade payables or accrued expenses, in each
case incurred on normal, customary terms in the ordinary course of business,
not overdue for a period of more than 90 days (or, if overdue for a period of
more than 90 days, being contested in good faith and by appropriate proceedings
and adequate reserves with respect thereto being maintained on the books of
Trans Texas in accordance with GAAP) and not constituting any amounts due to
banks or other financial institutions;
(i) Swap Obligations of TransTexas;
(j) Unrestricted Non-Recourse Debt of TransTexas;
(k) Debt evidenced by the Senior TransTexas Notes;
(l) TransTexas may enter into an agreement for the Presale of Gas for
cash if the net proceeds from such sale are used to make an Intercompany Loan
Redemption;
(m) Debt relating to the Reimbursement and Credit Facility;
(n) letters of credit and reimbursement obligations relating thereto
to the extent collateralized by cash or Cash Equivalents;
57
64
(o) Debt evidenced by the Subordinated Notes;
(p) guarantees of Debt of TTXD to the extent that such Debt was Debt
of TransTexas on the Issue Date and relates to assets contributed to TTXD
pursuant to clause (xiii) of the definition of "Permitted Investment";
(q) Debt of TransTexas or any of its Subsidiaries owed to the Company
which is loaned pursuant to terms of the fourth paragraph of either Section
4.21 and Section 4.24; and
(r) Debt of TransTexas owed to the Company which together with any
Debt incurred pursuant to clauses (2)(p), (3)(v) and (4)(t) hereof does not in
the aggregate exceed $50,000,000 principal amount outstanding at any one time;
provided that such Debt must have a maturity date which is not after the
maturity date of the Notes; and provided further, that such loan must bear cash
interest which, together with any cash interest payable (i) on Debt Incurred
pursuant to clauses (2)(p), (3)(v) and (4)(t) hereof, (ii) the TARC
Intercompany Loan, (iii) the TransTexas Intercompany Loan and (iv) any other
intercompany loan payable to the Company, is sufficient to satisfy all interest
payments on the Notes through their stated maturity.
(2) in the case of TARC or its Subsidiaries prior to the
earlier to occur of (x) the Phase I Completion Date or (y) the Notes being
rated "B2" or better by Moody's Investors Services, Inc. or "BB" or better by
Standard and Poor's Corporation, Inc.:
(a) Debt evidenced by the TARC Intercompany Loan or the Guarantees;
(b) Subordinated Debt of TARC solely to any wholly owned Subsidiary
of TARC, or Debt of any wholly owned Subsidiary of TARC solely to TARC or to
any wholly owned Subsidiary of TARC;
(c) Debt of TARC outstanding at any time in an aggregate principal
amount not to exceed the greater of (x) $100,000,000 or (y) the TARC Borrowing
Base, less, in each case, the amount of any Debt of an Accounts Receivable
Subsidiary (other than Debt owed to TARC).
(d) Debt in an aggregate principal amount not to exceed at any one
time $10,000,000;
(e) Debt incurred in connection with the Port Commission Bond
Financing, and any Attributable Debt related thereto, in each case in an
aggregate amount not to exceed $65,000,000;
(f) Debt secured by a Permitted TARC Lien that meets the requirements
of clause (c), (g), (m), (o) and (r) of the definition of "Permitted TARC
Liens", to the extent that such Liens would give rise to Debt under clauses
(i), (ii), or (iii) of the definition of "Debt";
(g) Any guaranty of Debt permitted by clauses (c), (d) or (f) hereof
which guaranty is subordinated in right of payment to the Notes and the TARC
Intercompany Loan to the same extent that the Debt permitted to be incurred
pursuant to such clauses would be required to be subordinated to the Notes and
the TARC Intercompany Loan and which guaranty shall not be included in the
determination of the amount of Debt which may be Incurred pursuant to (c), (d)
or (f) hereof;
58
65
(h) Debt of TARC represented by trade payables or accrued expenses,
in each case, incurred on normal, customary terms in the ordinary course of
business, not overdue for a period of more than 90 days (or, if overdue for a
period of more than 90 days, being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto being maintained on the
books of TARC in accordance with GAAP) and not constituting any amounts due to
banks or other financial institutions;
(i) Swap Obligations of TARC;
(j) Unrestricted Non-Recourse Debt of TARC;
(k) Debt evidenced by the Senior TARC Mortgage Notes;
(l) Debt or Attributable Debt Incurred in connection with the
acquisition of tank storage facilities in the vicinity of the refinery or a
substantially contemporaneous Sale and Leaseback Transaction with respect
thereto;
(m) letters of credit and reimbursement obligations relating thereto
to the extent collateralized by cash or Cash Equivalents;
(n) Debt evidenced by the Senior TARC Discount Notes;
(o) Debt of TARC or any of its Subsidiaries owed to the Company which
is loaned pursuant to terms of the fourth paragraph of either Section 4.21 or
4.24;
(p) Debt of TARC owed to the Company which together with any Debt
Incurred pursuant to clauses (l)(r), (3)(v) and (4)(t) hereof does not in the
aggregate exceed $50,000,000 principal amount outstanding at any one time;
provided that such Debt must have a maturity date which is not after the
maturity date of the Notes; and provided further, that such loan must bear cash
interest which, together with any cash interest payable (i) on Debt Incurred
pursuant to clauses (l)(r), (3)(v) and (4)(t) hereof, (ii) the TARC
Intercompany Loan, (iii) the TransTexas Intercompany Loan and (iv) any other
intercompany loan payable to the Company, is sufficient to satisfy all interest
payments on the Notes through their stated maturity; and
(q) TARC may Incur Debt as an extension, renewal, replacement, or
refunding of any of the Debt permitted to be Incurred by clause (e) hereof, or
this clause (q) (such Debt is collectively referred to as "Pre-Phase I TARC
Refinancing Debt"), provided, that (l) the maximum principal amount of
Pre-Phase I TARC Refinancing Debt (or, if such Pre-Phase I TARC Refinancing
Debt is issued with original issue discount, the original issue price of such
Pre-Phase I TARC Refinancing Debt) permitted under this clause (q) may not
exceed the lesser of (x) the principal amount of the Debt being extended,
renewed, replaced, or refunded plus Refinancing Fees or (y) if such Debt being
extended, renewed, replaced, or refunded was issued at an original issue
discount, the original issue price, plus amortization of the original issue
discount as of the time of the Incurrence of the Pre-Phase I TARC Refinancing
Debt plus Refinancing Fees, (2) the Pre-Phase I TARC Refinancing Debt has a
Weighted Average Life and a final maturity that is equal to or greater than the
Debt being extended, renewed, replaced, or refunded at the time of such
extension, renewal, replacement, or refunding and (3) the Pre-Phase I TARC
Refinancing Debt shall rank with respect to the Notes and the TARC Intercompany
Loan to an extent no less favorable in respect thereof to the Holders than the
Debt being refinanced.
59
66
(3) in the case of TransTexas or its Subsidiaries after the
earlier to occur of (x) the Phase I Completion Date or (y) the Notes being
rated "B2" or better by Moody's Investors Services, Inc. or "BB-" or better by
Standard and Poor's Corporation, Inc.:
(a) Debt evidenced by the TransTexas Intercompany Loan or the
Guarantees;
(b) Subordinated Debt of TransTexas solely to any wholly owned
Subsidiary of TransTexas, or Debt of any wholly owned Subsidiary of TransTexas
solely to TransTexas or to any wholly owned Subsidiary of TransTexas;
(c) (i) if the Phase I Completion Date has not occurred but the Notes
have been rated "B2" by Moody's Investors Services, Inc. or "BB-" by Standard
and Poor's Corporation, Inc., TransTexas may Incur Subordinated Debt with
initial net proceeds to TransTexas not in excess of $75,000,000 in the
aggregate, (ii) if the Phase I Completion Date has not occurred but the Notes
are rated at least "B1" or better by Moody's Investors
Services, Inc. or "BB" or better by Standard and Poor's Corporation, Inc.,
TransTexas may Incur Subordinated Debt with initial net proceeds to TransTexas
not in excess of $125,000,000 in the aggregate, less any Subordinated Debt
Incurred pursuant to subclause (i) above, and (iii) if the Phase I Completion
Date has occurred, TransTexas may Incur Subordinated Debt with initial net
proceeds to TransTexas not in excess of $125,000,000 in the aggregate, less any
Subordinated Debt Incurred pursuant to subclauses (i) and (ii) above;
(d) Debt outstanding under a Revolving Credit Facility in an
aggregate principal amount not to exceed at any one time the greater of
$40,000,000 or the TransTexas Borrowing Base, less any Debt outstanding
pursuant to clause (c) of clause (l) above;
(e) Debt in an aggregate principal amount outstanding not to exceed
at any one time $35,000,000, less any Debt outstanding pursuant to clause (d)
of clause (l) above;
(f) Debt secured by Liens permitted pursuant to clauses (j) or (t) of
Permitted TransTexas Liens, in an aggregate principal amount not to exceed
$35,000,000;
(g) The Attributable Debt Incurred in connection with a Sale and
Leaseback Transaction of TransTexas' headquarters building located at 1300
North Sam Houston Parkway East, Houston, Texas, and the properties, including
various buildings and site improvements, located (i) on U.S. Highway 359, known
as "TransTexas Gas Corporation," in Webb County, Texas and (ii) two (2) miles
west of Zapata, Texas, on Farm-To-Market Road 496, known as "TransTexas Gas
Corporation," in Zapata County, Texas;
(h) Debt of TransTexas secured by a Permitted TransTexas Lien that
meets the requirements of clause (c), (d), (e), (i), (k), (l), (m), (o) or (r)
of the definition of "Permitted TransTexas Liens," to the extent that such
Liens would give rise to Debt under clauses (i), (ii), or (iii) of the
definition of "Debt";
(i) any guaranty of Debt permitted by clauses (c), (d), (e), (f), (h)
or (j) hereof, which guaranty is subordinated in right of payment to the
TransTexas Intercompany Loan to the same extent that the Debt permitted to be
incurred pursuant to such clauses would be required to be subordinated to the
TransTexas Intercompany Loan and which guaranty shall not be included in the
determination of the amount of Debt which may be Incurred pursuant to (c), (d),
(e), (f), (h) or (j) hereof;
60
67
(j) TransTexas may Incur Debt as an extension, renewal, replacement,
or refunding of any of the Debt permitted to be Incurred by clauses (c), (j),
(q) or (s) hereof, or the third paragraph of this section or Debt permitted to
be refinanced pursuant to clause (l) (g) hereof (such Debt is collectively
referred to as "TransTexas Refinancing Debt"), provided, that (1) the maximum
principal amount of TransTexas Refinancing Debt (or, if such TransTexas
Refinancing Debt is issued with original issue discount, the original issue
price of such TransTexas Refinancing Debt) permitted under this subclause (j)
may not exceed the lesser of (x) the principal amount of the Debt being
extended, renewed, replaced, or refunded plus Refinancing Fees, or (y) if such
Debt being extended, renewed, replaced, or refunded was issued at an original
issue discount, the original issue price, plus amortization of the original
issue discount as of the time of the Incurrence of the TransTexas Refinancing
Debt plus Refinancing Fees, (2) the TransTexas Refinancing Debt has a Weighted
Average Life and a final maturity that is equal to or greater than the Debt
being extended, renewed, replaced, or refunded at the time of such extension,
renewal, replacement, or refunding and (3) the TransTexas Refinancing Debt
shall rank with respect to the Notes and the TransTexas Intercompany Loan to an
extent no less favorable in respect thereof to the Holders than the Debt being
refinanced;
(k) Debt represented by trade payables or accrued expenses, in each
case incurred on normal, customary terms in the ordinary course of business,
not overdue for a period of more than 90 days (or, if overdue for a period of
more than 90 days, being contested in good faith and by appropriate proceedings
and adequate reserves with respect thereto being maintained on the books of
TransTexas in accordance with GAAP) and not constituting any amounts due to
banks or other financial institutions;
(l) Swap Obligations of TransTexas;
(m) Unrestricted Non-Recourse Debt of TransTexas;
(n) Debt evidenced by the Senior TransTexas Notes;
(o) Dollar-Denominated Production Payment Obligations that TransTexas
elects to treat as Debt not to exceed $40,000,000 in the aggregate at any one
time outstanding;
(p) TransTexas may enter into an agreement for the Presale of Gas for
cash if the net proceeds from such sale are used to make an Intercompany Loan
Redemption;
(q) Debt relating to the Reimbursement and Credit Facility;
(r) letters of credit and reimbursement obligations relating thereto
to the extent collateralized by cash or Cash Equivalents;
(s) Debt evidenced by the Subordinated Notes;
(t) guarantees of Debt of TTXD to the extent that such Debt was Debt
of TransTexas on the Issue Date and relates to assets contributed to TTXD
pursuant to clause (xiii) of the definition of "Permitted Investment";
(u) Debt of TransTexas or any of its Subsidiaries owed to the Company
which is loaned pursuant to terms of the fourth paragraph of either of Section
4.21 or 4.24; and
61
68
(v) Debt of TransTexas owed to the Company which together with any
Debt Incurred pursuant to clauses (1) (r), (2) (p) and (4) (t) hereof does not
in the aggregate exceed $50,000,000 principal amount outstanding at any one
time; provided that such Debt must have a maturity date which is not after the
maturity date of the Notes; and provided further, that such loan must bear cash
interest which, together with any cash interest payable (i) on Debt Incurred
pursuant to clauses (1)(r), (2)(p) and (4)(t) hereof, (ii) the TARC
Intercompany Loan, (iii) the TransTexas Intercompany Loan and (iv) any other
intercompany loan payable to the Company, is sufficient to satisfy all interest
payments on the Notes through their stated maturity.
(4) in the case of TARC or its Subsidiaries after the earlier to
occur of (x) the Phase I Completion Date or (y) the Notes being rated "B2" or
better by Moody's Investors Services, Inc. or "BB-" or better by Standard and
Poor's Corporation, Inc.:
(a) Debt evidenced by the TARC Intercompany Loan or the Guarantees;
(b) Subordinated Debt of TARC solely to any wholly owned Subsidiary
of TARC, or Debt of any wholly owned Subsidiary of TARC solely to TARC or to
any wholly owned Subsidiary of TARC;
(c) Subordinated Debt of TARC with initial net proceeds to TARC not
in excess of $150,000,000 in the aggregate;
(d) Debt of TARC outstanding at any time in an aggregate principal
amount not to exceed the greater of (x) $100,000,000 or (y) the TARC Borrowing
Base, less, in each case, the amount of any Debt of an Accounts Receivable
Subsidiary (other than Debt owed to TARC) and any Debt outstanding pursuant to
clause (c) of clause (2) above;
(e) Debt in an aggregate principal amount not to exceed at any one
time $10,000,000, less any Debt outstanding pursuant to clause (d) of clause
(2) above;
(f) Debt secured by Liens permitted pursuant to clauses (h) and (j)
of Permitted TARC Liens, in an aggregate principal amount not to exceed
$35,000,000;
(g) Debt incurred in connection with the Port Commission Bond
Financing, and any Attributable Debt related thereto, in each case in an
aggregate amount not to exceed $65,000,000, less any Debt incurred pursuant to
clause (e) of clause (2) above;
(h) Debt secured by a Permitted TARC Lien that meets the requirements
of clause (c), (g), (m), (o) and (r) of the definition of "Permitted TARC
Liens," to the extent that such Liens would give rise to Debt under clauses
(i), (ii), or (iii) of the definition of "Debt";
(i) Any guaranty of Debt permitted by clauses (c), (d), (e), (f), (h)
or (j) hereof which guaranty is subordinated in right of payment to the Notes
and the TARC Intercompany Loan to the same extent that the Debt permitted to be
incurred pursuant to such clauses would be required to be subordinated to the
Notes and the TARC Intercompany Loan and which guaranty shall not be included
in the determination of the amount of Debt which may be Incurred pursuant to
(c), (d), (e), (f), (h) or (j) hereof;
(j) TARC may Incur Debt as an extension, renewal, replacement, or
refunding of any of the Debt permitted to be Incurred by clauses (c) or (g)
above, the fourth paragraph of this section or this subclause
62
69
(j) or Debt permitted to be refinanced pursuant to clause (2)(q) hereof (such
Debt is collectively referred to as "TARC Refinancing Debt"), provided, that
(1) the maximum principal amount of TARC Refinancing Debt (or, if such TARC
Refinancing Debt is issued with original issue discount, the original issue
price of such TARC Refinancing Debt) permitted under this subclause (j) may not
exceed the lesser of (x) the principal amount of the Debt being extended,
renewed, replaced, or refunded plus Refinancing Fees, or (y) if such Debt being
extended, renewed, replaced, or refunded was issued at an original issue
discount, the original issue price, plus amortization of the original issue
discount at the time of the Incurrence of the TARC Refinancing Debt plus
Refinancing Fees, (2) the TARC Refinancing Debt has a Weighted Average Life and
a final maturity that is equal to or greater than the Debt being extended,
renewed, replaced, or refunded at the time of such extension, renewal,
replacement, or refunding and (3) the TARC Refinancing Debt shall rank with
respect to the Notes and the TARC Intercompany Loan to an extent no less
favorable in respect thereof to the Holders than the Debt being refinanced;
(k) Debt of TARC represented by trade payables or accrued expenses,
in each case, incurred on normal, customary terms in the ordinary course of
business, not overdue for a period of more than 90 days (or, if overdue for a
period of more than 90 days being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto being maintained on the
books of TARC in accordance with GAAP) and not constituting any amounts due to
banks or other financial institutions;
(l) Swap Obligations of TARC;
(m) Unrestricted Non-Recourse Debt of TARC;
(n) Debt evidenced by the Senior TARC Mortgage Notes;
(o) Debt or Attributable Debt Incurred in connection with the
acquisition of tank storage facilities in the vicinity of the refinery or a
substantially contemporaneous Sale and Leaseback Transaction with respect
thereto;
(p) letters of credit and reimbursement obligations relating thereto
to the extent collateralized by cash;
(q) Debt evidenced by the Senior TARC Discount Notes;
(r) Debt of TARC Incurred in connection with the acquisition,
construction or improvement of a CATOFIN(R) Unit not in excess of 20% of TARC's
Consolidated EBITDA accrued for the period (taken as one accounting period)
commencing with the first full fiscal quarter that commenced after the Phase I
Completion Date, to and including the fiscal quarter ended immediately prior to
the date of such calculation, provided, that, no such Debt may be Incurred
unless (i) the Phase II Completion Date has occurred or (ii) the Construction
Supervisor shall have provided the Trustee with written certification that,
based upon its bi-monthly evaluation of the Capital Improvement Program, the
amounts remaining in the disbursement accounts to complete Phase II are
sufficient to complete Phase II in accordance with the Plans approved by the
Construction Supervisor;
(s) Debt of TARC or any of its Subsidiaries owed to the Company which
is loaned pursuant to terms of the fourth paragraph of either Section 4.21 or
4.24; and
63
70
(t) Debt of TARC owed to the Company which together with any Debt
Incurred pursuant to clauses (l)(r), (2)(p) and (3)(v) hereof does not in the
aggregate exceed $50,000,000 principal amount outstanding at any one time;
provided that such Debt must have a maturity date which is not after the
maturity date of the Notes; and provided further, that such loan must bear cash
interest which, together with any cash interest payable (i) on Debt Incurred
pursuant to clauses (l)(r), (2)(p) and (3)(v) hereof, (ii) the TARC
Intercompany Loan, (iii) the TransTexas Intercompany Loan and (iv) any other
intercompany loan payable to the Company, is sufficient to satisfy all interest
payments on the Notes through their stated maturity.
(5) in the case of the Company or its Accounts Receivable
Subsidiary;
(a) Debt evidenced by the Notes pursuant to this Indenture;
(b) guarantees of the Senior TARC Mortgage Notes and the Senior TARC
Discount Notes;
(c) Debt of an Accounts Receivable Subsidiary in an amount permitted
by Section 4.20;
(d) Subordinated Debt of the Company with initial net proceeds to the
Company not in excess of $150,000,000 in the aggregate; and
(e) The Company may Incur Debt as an extension, renewal, replacement,
or refunding of any of the Debt permitted to be Incurred by subclauses (d)
hereof, or this subclause (e) (such Debt is collectively referred to as "TEC
Refinancing Debt"), provided, that (1) the maximum principal amount of TEC
Refinancing Debt (or, if such TEC Refinancing Debt is issued with original
issue discount, the original issue price of such Refinancing Debt) permitted
under this subclause (e) may not exceed the lesser of (x) the principal amount
of the Debt being extended, renewed, replaced, or refunded plus Refinancing
Fees, or (y) if such Debt being extended, renewed, replaced, or refunded was
issued at an original issue discount, the original issue price, plus
amortization of the original issue discount as of the time of the Incurrence of
the TEC Refinancing Debt plus Refinancing Fees, (2) the TEC Refinancing Debt
has a Weighted Average Life and a final maturity that is equal to or greater
than the Debt being extended, renewed, replaced, or refunded at the time of
such extension, renewal, replacement, or refunding and (3) the TEC Refinancing
Debt shall rank with respect to the Notes to an extent no less favorable in
respect thereof to the Holders than the Debt being refinanced.
For the purpose of determining the amount of outstanding Debt that has
been Incurred pursuant to clause (o) or (m) of clause (1) above, clause (e) of
clause (2) above, clause (c), (s) or (q) of clause (3) above, clause (c) or (g)
of clause (4) above or clause (d) of clause (5) above, there shall be included
in each such case the principal amount then outstanding of any Debt originally
Incurred pursuant to such clause and, after any refinancing or refunding of
such Debt, any outstanding Debt Incurred pursuant to clause (g) of clause (1)
above, clause (q) of clause (2) above, clause (j) of clause (3) above, clause
(j) of clause (4) above and clause (e) of clause (5) above so as to refinance
or refund such Debt Incurred pursuant to such subclauses and any subsequent
refinancings or refundings thereof.
Notwithstanding the foregoing provisions of this covenant, after the
Phase I Completion Date, TransTexas may (1) Incur Senior Debt and may issue
Disqualified Capital Stock if, at the time such Senior Debt is Incurred or such
Disqualified Capital Stock is Issued, (i) no Default or Event of Default shall
have occurred and be continuing at the time or immediately after giving effect
to such transaction on a pro forma
64
71
basis, and (ii) immediately after giving effect to the Consolidated Fixed
Charges in respect of such Debt being incurred and the application of the
proceeds therefrom to the extent used to reduce Debt or retire Disqualified
Capital Stock, on a pro forma basis, the Consolidated Fixed Charge Coverage
Ratio of TransTexas for the Reference Period is greater than 2.5 to 1, and
(iii) TransTexas' Adjusted Consolidated Tangible Assets are equal to or greater
than 150% of the total consolidated principal amount or accreted value, as the
case may be, of Debt of the TransTexas Entities (excluding, for purposes of
this calculation, the negative Net Worth of any Subsidiary which was formerly
designated as an Unrestricted Subsidiary); and (2) Incur Subordinated Debt if,
at the time such Subordinated Debt is incurred, (i) no Default or Event of
Default shall have occurred and be continuing at the time or immediately after
giving effect to such transaction on a pro forma basis, (ii) immediately after
giving effect to the Consolidated Fixed Charges in respect of such Subordinated
Debt being incurred and the application of the proceeds therefrom to the extent
used to reduce Debt, on a pro forma basis, the Consolidated Fixed Charge
Coverage Ratio of TransTexas for the Reference Period is greater than 2.0 to 1,
and (iii) TransTexas' Adjusted Consolidated Tangible Assets are equal to or
greater than 125% of the total consolidated principal amount or accreted value,
as the case may be, of Debt of the TransTexas Entities (excluding, for purposes
of this calculation, the negative Net Worth of any Subsidiary which was
formerly designated as an Unrestricted Subsidiary).
Notwithstanding the foregoing provisions of this covenant, (a) TARC
may Incur Senior Debt and TARC may issue Disqualified Capital Stock if, at the
time such Senior Debt is Incurred or such Disqualified Capital Stock is issued,
(i) no Default or Event of Default shall have occurred and be continuing at the
time or immediately after giving effect to such transaction on a pro forma
basis, and (ii) immediately after giving effect to the Consolidated Fixed
Charges in respect of such Debt being Incurred or such Disqualified Capital
Stock being issued and the application of the proceeds therefrom to the extent
used to reduce Debt or Disqualified Capital Stock, on a pro forma basis, the
Consolidated Fixed Charge Coverage Ratio of TARC for the Reference Period is
greater than 2.5 to 1, and (b) TARC may Incur Subordinated Debt if, at the time
such Subordinated Debt is incurred, (i) no Default or Event of Default shall
have occurred and be continuing at the time or immediately after giving effect
to such transaction on a pro forma basis, and (ii) immediately after giving
effect to the Consolidated Fixed Charges in respect of such Subordinated Debt
being incurred and the application of the proceeds therefrom to the extent used
to reduce Debt, on a pro forma basis, the Consolidated Fixed Charge Coverage
Ratio of TARC for the Reference Period is greater than 2.0 to 1.
Debt Incurred and Disqualified Capital Stock issued by any Person that
is not a Subsidiary of TransTexas or TARC, as the case may be, which Debt or
Disqualified Capital Stock is outstanding at the time such Person becomes a
Subsidiary of, or is merged into, or consolidated with TransTexas or TARC or
one of their Subsidiaries, as the case may be, shall be deemed to have been
Incurred or issued, as the case may be, at the time such Person becomes a
Subsidiary of, or is merged into, or consolidated with TransTexas or TARC,
respectively, or one of their respective Subsidiaries.
For the purpose of determining compliance with this covenant, (A) if
an item of Debt meets the criteria of more than one of the types of Debt
described in the above clauses, the Company or the Subsidiary in question shall
have the right to determine in its sole discretion the category to which such
Debt applies and shall not be required to include the amount and type of such
Debt in more than one of such categories and may elect to apportion such item
of Debt between or among any two or more of such categories otherwise
applicable, and (B) the amount of any Debt which does not pay interest in cash
or which was issued at a discount to face value shall be deemed to be equal to
the amount of the liability in respect thereof determined in accordance with
GAAP.
65
72
Section 12 Limitations on Restricting Subsidiary Dividends. The
Company shall not, and shall not permit any of its Subsidiaries (other than
TARC, TransTexas or any of the TTXD Entities) to, directly or indirectly,
create, assume, or suffer to exist any consensual encumbrance or restriction on
the ability of any Subsidiary of the Company (other than TARC, TransTexas or
any of the TTXD Entities) to pay dividends or make other distributions on the
Capital Stock of any Subsidiary of the Company, except encumbrances and
restrictions existing under this Indenture and any agreement of a Person
acquired by the Company or a Subsidiary of the Company, which restrictions
existed at the time of acquisition, were not put in place in anticipation of
such acquisition and are not applicable to any Person or property, other than
the Person or any property of the Person so acquired. Notwithstanding anything
contained herein to the contrary, neither TARC nor TransTexas may create an
encumbrance or restriction on their ability to pay premium, if any, principal
of, or interest on, the Intercompany Loans.
Section 13 Limitation on Liens. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, Incur, or suffer to
exist any Lien upon any of its respective property or assets, whether now owned
or hereafter acquired which property or assets constitute Collateral, other
than (a) in the case of the Company, Permitted TEC Liens, (b) in the case of
TARC, Permitted TARC Liens, and (c) in the case of TransTexas, Permitted
TransTexas Liens. For the purpose of determining compliance with this Section
4.13, if a Lien meets the criteria of more than one of the types of Permitted
Liens, the Company or the Subsidiary in question shall have the right to
determine in its sole discretion the category of Permitted Lien to which such
Lien applies, shall not be required to include such Lien in more than one of
such categories, and may elect to apportion such Lien between or among any two
or more categories otherwise applicable.
Section 14 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, consummate an Asset Sale unless (A) an amount equal to the Net
Cash Proceeds therefrom is (i) in the case of an Asset Sale by the Company,
applied as described under Section 4.21 (ii) in the case of an Asset Sale by
one of the TransTexas Entities, applied to an Intercompany Loan Redemption of
the TransTexas Intercompany Loan, (iii) in the case of an Asset Sale by one of
the TARC Entities, applied to an Intercompany Loan Redemption of the TARC
Intercompany Loan, (iv) used to make cash payments in the ordinary course of
business and consistent with past practices that are not otherwise prohibited
by this Indenture, provided that the aggregate amount so used pursuant to this
clause (iv) from and after the Issue Date does not exceed $25,000,000 with
respect to TransTexas, or $15,000,000 with respect to TARC (without duplication
of amounts used to acquire any Capital Assets in accordance with clauses (v),
(vi) and (vii) of this paragraph (a) below), (v) with respect to an Asset Sale
by TransTexas or any of its Subsidiaries (x) to the extent such Asset Sale
occurs prior to the payment in full of the TransTexas Intercompany Loan (and
any other loans from the Company pursuant to clauses (xvii) or (xxvii) of the
definition of "Permitted Investment") and includes proved reserve assets, used
for Capital Expenditures in a Related TransTexas Business within 180 days after
the date of such Asset Sale, provided that TransTexas' most recent Reserve
Report indicates that TransTexas and its Subsidiaries, after giving effect to
the Asset Sale and to the addition of proved reserves associated with any
assets acquired in connection with such Asset Sale, have proved reserves as
indicated on the most recent Reserve Report at least equal to (1) if such sale
occurs during the fiscal year ending January 31, 1998, 450 Bcfe of natural gas,
(2) if such sale occurs during the fiscal year ending January 31, 1999, 500
Bcfe of natural gas or with an SEC PV 10 of at least $600,000,000 and (3) if
such sale occurs during the fiscal year ending January 31, 2000 or thereafter,
600 Bcfe of natural gas or with an SEC PV 10 of at least $700,000,000, or (y)
to the extent such Asset Sale occurs substantially contemporaneously with or
after the payment in full of the TransTexas Intercompany Loan (and any other
loan to TransTexas
66
73
from the Company pursuant to clauses (xvii) or (xxviii) of the definition of
"Permitted Investment") or involves assets that do not include proved reserves,
used for Capital Expenditures in a Related TransTexas Business within 180 days
after the date of such Asset Sale; (vi) with respect to an Asset Sale by TARC
or any of its Subsidiaries after the Phase II Completion Date, used for Capital
Expenditures in a Related TARC Business within 180 days after the date of such
Asset Sale; provided that, prior to the payment in full of the TARC
Intercompany Loan (and any other loan to TARC from the Company pursuant to
clauses (xvii) or (xxviii) of the definition of "Permitted Investment"), the
aggregate amount does not exceed $10,000,000 or (vii) with respect to an Asset
Sale by TransTexas or TARC or any of their Subsidiaries resulting from (x) the
damage to or destruction of assets for which Insurance Proceeds are paid or (y)
condemnation, eminent domain or similar type proceedings, in each case, used
for Capital Expenditures in a Related TransTexas Business (in the case of Asset
Sales by any of the TransTexas Entities) or a Related TARC Business (in the
case of Asset Sales by any of the TARC Entities) within 360 days after the date
of such Asset Sale; and (B) in the case of any Asset Sale or series of related
Asset Sales for total proceeds in excess of $5,000,000, at least 85% of the
value of the consideration for such Asset Sale consists of cash, Cash
Equivalents or Exchange Assets or any combination thereof.
(b) Notwithstanding the foregoing limitations on Asset Sales and
restrictions on the use of Net Cash Proceeds therefrom:
(i) TransTexas or any Subsidiary of TransTexas may convey,
sell, lease, transfer, or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to TransTexas or a
wholly owned Subsidiary of TransTexas;
(ii) TARC or any Subsidiary of TARC may convey, sell, lease,
transfer, or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to TARC or any wholly owned
Subsidiary of TARC;
(iii) the Company and its Subsidiaries may engage in Asset
Sales in the ordinary course of business;
(iv) the Company and its Subsidiaries may engage in Asset
Sales not otherwise permitted in clauses (i) through (iii) or (v)
through (xiii) of this sentence provided that the aggregate proceeds
from all such Asset Sales do not exceed $5,000,000 in any twelve-month
period;
(v) the Company and its Subsidiaries may engage in Asset
Sales pursuant to and in accordance with the provisions of Article V;
(vi) the Company and its Subsidiaries may sell, assign, lease,
license, transfer, abandon or otherwise dispose of (a) damaged, worn
out, unserviceable or other obsolete property in the ordinary course
of business or (b) other property no longer necessary for the proper
conduct of their business;
(vii) TARC and its Subsidiaries may sell accounts receivable to
an Accounts Receivable Subsidiary in accordance with the provisions
described under Section 4.20;
(viii) TARC and its Subsidiaries may convey, sell, transfer or
otherwise dispose of crude oil and refined products in the ordinary
course of business;
67
74
(ix) the Company and its Subsidiaries may engage in Asset
Sales (a) the Net Cash Proceeds of which are used for payment of cash
interest on the Notes or the Intercompany Loans, (b) in connection
with the settlement of litigation or the payment of judgments or (c)
the Net Cash Proceeds of which are used in connection with the
settlement of litigation or for the payment of judgments; provided,
that the aggregate value of assets transferred pursuant to clauses (b)
and (c) above from and after the Issue Date does not exceed
$25,000,000;
(x) TransTexas may sell, convey, contribute or otherwise
transfer the assets comprising the Related TTXD Business to TTXD;
(xi) TARC may transfer the Port Facility Assets in connection
with the Port Commission Bond Financing;
(xii) TransTexas and its Subsidiaries may convey, sell,
transfer or otherwise dispose of Hydrocarbons or other mineral
products in the ordinary course of business;
(xiii) Prior to the TTXD Spin-off, TransTexas may sell, transfer,
contribute or otherwise dispose of the capital stock of TTXD or the
assets comprising the drilling and energy services business and
pipeline services business of TransTexas provided that (a) in the case
of a transfer, contribution or other distribution to a company which
has a class of equity securities publicly traded on a national
securities exchange or on the NNM, (x) at least 50% of the value of
the consideration for such Asset Sale consists of cash and up to 50%
of the value of the consideration for such Asset Sale may consist of
Capital Stock and (y) the Net Cash Proceeds from such Asset Sale are
applied pursuant to clause (a)(ii) of the prior paragraph or (b) in
the case of a transfer, contribution or other distribution to a joint
venture, partnership, limited liability company or similar entity
newly formed for the purpose of this transfer, up to 100% of the value
of the consideration for such Asset Sale may consist of Capital Stock
or other equity interests in such entity; provided, that any Net Cash
Proceeds from such Asset Sale are applied pursuant to clause (a)(ii)
of the prior paragraph;
(xiv) The Company and TARC may sell shares of TransTexas Common
Stock in connection with a transaction contemplated by the TransTexas
Disbursement Agreement and clause (xii) of the definition of
"Restricted Payments," and
(xv) Unless otherwise required by the foregoing clauses (i)
through (xiv), the proceeds of any Asset Sale permitted thereby shall
be used by the Company or its Subsidiaries for purposes not otherwise
prohibited by this Indenture.
(c) The Company shall not, and shall not permit any of its
Subsidiaries to, consummate a Non-Collateral Asset Sale unless an amount equal
to the Net Cash Proceeds therefrom is used for Capital Expenditures in (A) a
Related TARC Business in the case of Non-Collateral Asset Sales by any of the
TARC Entities or (B) a Related TransTexas Business in the case of
Non-Collateral Asset Sales by any of the TransTexas Entities, in each case
within 180 days after the date of such Non-Collateral Asset Sale.
68
75
Section 15 Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
It is the intention of the parties hereto to comply strictly with
applicable usury laws; accordingly, notwithstanding any provision to the
contrary in this Indenture or in any of the documents securing the payment of
the Notes or otherwise relating thereto, in no event shall this Indenture or
such documents require or permit the payment, charging, taking, reserving, or
receiving of any sums constituting interest under applicable laws which exceed
the maximum amount permitted by such laws. If any such excess interest is
contracted for, charged, taken, reserved, or received in connection with the
Notes or in any of the documents securing the payment thereof or otherwise
relating thereto, or in any communication by the Holders or any other person to
the Company or any other person, or in the event all or part of the principal
or interest on the Notes shall be prepaid or accelerated, so that under any of
such circumstances or under any other circumstance whatsoever the amount of
interest contracted for, charged, taken, reserved, or received on the amount of
principal actually outstanding from time to time under the Notes shall exceed
the maximum amount of interest permitted by applicable usury laws, then in any
such event it is agreed as follows: (i) the provisions of this paragraph shall
govern and control, (ii) any such excess shall be deemed an accidental and bona
fide error and canceled automatically to the extent of such excess, and shall
not be collected or collectible, (iii) any such excess which is or has been
paid or received notwithstanding this paragraph shall be credited against the
then unpaid principal balance on the Notes or refunded to the Company, at the
Holders' option, and (iv) the effective rate of interest shall be automatically
reduced to the maximum lawful rate allowed under applicable laws as construed
by courts having jurisdiction hereof or thereof. Without limiting the
foregoing, all calculations of the rate of interest contracted for, charged,
taken, reserved, or received in connection herewith which are made for the
purpose of determining whether such rate exceeds the maximum lawful rate
shall be made to the extent permitted by applicable laws by amortizing,
prorating, allocating and spreading during the period of the full term of the
Notes, including all prior and subsequent renewals and extensions, all interest
at any time contracted for, charged, taken, reserved, or received. The terms
of this paragraph shall be deemed to be incorporated in every document,
security instrument, and communication relating to this Indenture and the
Notes.
Section 16 Guarantee by Subsidiaries. If TARC or TransTexas or any
of their respective Subsidiaries shall make Investments in an aggregate amount,
or otherwise transfer (including by capital contribution) or cause to be
transferred, in a manner otherwise permitted pursuant to this Indenture, any
assets (tangible or intangible), businesses, divisions, real property, or
equipment having a book value as shown in the Company's most recent
consolidated balance sheet or the notes thereto (or if greater, a fair market
value at the time of transfer) in excess of $1,000,000 in or to any Subsidiary
of the Company that is not a Guarantor or an obligor on either the TransTexas
Intercompany Loan or the TARC Intercompany Loan, other than TTXD or any
Subsidiary of TTXD after the TTXD Spin-off, the Company shall (a) cause such
transferee Subsidiary to (x) guarantee payment of the TransTexas Intercompany
Loan, in the case of Subsidiaries of TransTexas, or the TARC Intercompany Loan
in the case of Subsidiaries of TARC, by executing a Guarantee and (y) execute
the appropriate security document, in substantially the form of the relevant
Security Document attached hereto, necessary to grant a security interest in
all of the assets of such
69
76
Subsidiary (other than Equipment, Inventory and Receivables) to secure such
Guarantee and (b) deliver to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, that such Guarantee is a valid, binding
and enforceable obligation of such Subsidiary, subject to customary exceptions
for bankruptcy, fraudulent transfer and equitable principles. If TARC or
TransTexas or any of their Subsidiaries shall subsequently sell or otherwise
transfer all of the Capital Stock of such Subsidiary held by TARC, TransTexas
or any of their Subsidiaries, the Guarantee required hereby shall be withdrawn
or cancelled. In addition, if the TTXD Spin-off has occurred the Guarantee by
TTXD or any of its Subsidiaries shall be withdrawn or cancelled.
The liability of each Guarantor under its Guarantee will be limited to
the amount of its Adjusted Net Assets. Each Guarantor that makes a payment
under its Guarantee of the TARC Intercompany Loan or the TransTexas
Intercompany Loan shall be entitled to assert a claim for reimbursement from
each other Guarantor of the respective Intercompany Loan, in each case in an
amount not to exceed the product of (x) the other Guarantor's Adjusted Net
Assets times (y) a fraction, the numerator of which is the other Guarantor's
Adjusted Net Assets and the denominator of which is the sum of the Adjusted Net
Assets of all Guarantors of the same Intercompany Loan.
Section 17 Intentionally Omitted.
Section 18 Limitations on Line of Business. Neither the TransTexas
Entities nor the TARC Entities shall directly or indirectly engage to any
substantial extent in any line or lines of business activity other than a
Related TransTexas Business or a Related TARC Business respectively and, in
each case, such other business activities as are reasonably related or
incidental thereto. Neither the Company nor any Affiliate of John R. Stanley
(other than Persons who are Affiliates solely by being directors or Affiliates
of directors of one or more companies affiliated with John R. Stanley and
other than TARC, TransTexas, TTXD or any of their Subsidiaries) may engage to
any substantial extent in any line or lines of business activity that is a
Related Business. The Company shall not have any direct Subsidiaries other than
TARC, TTXD, TransTexas, an Accounts Receivable Subsidiary, and any wholly owned
Subsidiary formed solely for the purpose of facilitating the reincorporation of
TARC in Delaware or the repurchase of the TARC Warrants.
Section 19 Separate Existence and Formalities. The Company hereby
covenants and agrees that:
(a) it will maintain procedures designed to prevent commingling of
the funds of the Company, its Subsidiaries' and TransAmerican, other than
pursuant to the Services Agreement;
(b) all actions taken by the Company and its Subsidiaries will be
taken pursuant to authority granted by the Board of Directors of the Company
and its Subsidiaries, to the extent required by law or the Company's and its
Subsidiaries' Certificate of Incorporation or By-laws;
(c) the Company and its Subsidiaries will maintain separate
records and books of account and such records and books of account shall be
separate from those of TransAmerican in each case in accordance with generally
accepted accounting principles;
(d) the Company and its Subsidiaries will maintain correct minutes
of the meetings and other corporate proceedings of the owners of its capital
stock and the Board of Directors and otherwise comply with requisite corporate
formalities required by law;
70
77
(e) the Company and its Subsidiaries will not knowingly mislead
any other Person as to the identity or authority of the Company and its
Subsidiaries; and
(f) it will maintain procedures designed to assure that all
written communications of the Company and its Subsidiaries, including, without
limitation, letters, invoices, purchase orders, contracts, statements and
applications, will appropriately identify the entity on whose behalf such
communication is made.
Section 20 Accounts Receivable Subsidiary.
(a) Notwithstanding the provisions of Section 4.3, TARC may, and may
permit any of its Subsidiaries to, make Investments in an Accounts Receivable
Subsidiary (i) the proceeds of which are applied within five Business Days of
the making thereof solely to finance the purchase of accounts receivable of
TARC and its Subsidiaries and (ii) in the form of Accounts Receivable
Subsidiary Notes to the extent permitted by clause (b) below; provided that the
aggregate amount of such Investments shall not exceed the greater of
$20,000,000 or 20% of the TARC Borrowing Base at any time;
(b) TARC shall not, and shall not permit any of its Subsidiaries to,
sell accounts receivable to an Accounts Receivable Subsidiary except for
consideration in an amount not less than that which would be obtained in an
arm's length transaction and solely in the form of cash or Cash Equivalents;
provided that an Accounts Receivable Subsidiary may pay the purchase price for
any such accounts receivable in the form of Accounts Receivable Subsidiary
Notes so long as, after giving effect to the issuance of any such Accounts
Receivable Subsidiary Notes, the aggregate principal amount of all Accounts
Receivable Subsidiary Notes outstanding shall not exceed the greater of
$20,000,000 or 20% of the aggregate purchase price paid for all outstanding
accounts receivable purchased by an Accounts Receivable Subsidiary since the
date of this Indenture (and not written off or required to be written off in
accordance with the normal business practice of an Accounts Receivable
Subsidiary);
(c) The Company shall not permit an Accounts Receivable Subsidiary to
sell any accounts receivable purchased from TARC and its Subsidiaries or
participation interests therein to any other Person except on an arm's length
basis and solely for consideration in the form of cash or Cash Equivalents;
(d) The Company shall not, and shall not permit any of its
Subsidiaries to, enter into any guarantee, subject any of their respective
properties or assets (other than the accounts receivable sold by them to an
Accounts Receivable Subsidiary or a guarantee limited in recourse solely to the
stock of an Accounts Receivable Subsidiary) to the satisfaction of any
liability or obligation or otherwise incur any liability or obligation
(contingent or otherwise), in each case, on behalf of an Accounts Receivable
Subsidiary or in connection with any sale of accounts receivable or
participation interests therein by or to an Accounts Receivable Subsidiary,
other than obligations relating to breaches of representations, warranties,
covenants, and other agreements of TARC or any of its Subsidiaries with respect
to the accounts receivable sold by TARC or any of its Subsidiaries to an
Accounts Receivable Subsidiary or with respect to the servicing thereof;
provided that neither TARC nor any of its Subsidiaries shall at any time
guarantee or be otherwise liable for the collectability of accounts receivable
sold by them;
(e) The Company shall not permit an Accounts Receivable Subsidiary to
engage in any business or transaction other than the purchase and sale of
accounts receivable or participation interests therein of TARC and its
Subsidiaries and activities incidental thereto, including incurring Debt
pursuant to clause (f) below;
71
78
(f) The Company shall not permit an Accounts Receivable Subsidiary to
incur any Debt other than the Accounts Receivable Subsidiary Notes, Debt owed
to TARC, and Non-Recourse Debt; provided that the aggregate principal amount of
all such Debt of an Accounts Receivable Subsidiary shall not exceed the book
value of its total assets as determined in accordance with GAAP;
(g) The Company shall cause any Accounts Receivable Subsidiary to
remit to the Company on a monthly basis as a distribution all available cash
and Cash Equivalents not held in a collection account pledged to lenders,
acquirors of accounts receivable or participation interests therein, to the
extent not applied (i) to pay interest or principal on the Accounts Receivable
Subsidiary Notes or any Debt of such Accounts Receivable Subsidiary permitted
by clause (f) above, (ii) to pay or maintain reserves for reasonable operating
expenses of such Accounts Receivable Subsidiary or to satisfy reasonable
minimum operating capital requirements, or (iii) to finance the purchase of
additional accounts receivable of TARC and its Subsidiaries; and
(h) TARC shall not, and shall not permit any of its Subsidiaries to,
sell accounts receivable to, or enter into any such transaction with or for the
benefit of, an Accounts Receivable Subsidiary (i) if such Accounts Receivable
Subsidiary pursuant to or within the meaning of any Bankruptcy Law (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes
general assignment for the benefit of its creditors, or (E) generally is not
paying its debts as they become due; or (ii) if a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for
relief against such Accounts Receivable Subsidiary in an involuntary case, (B)
appoints a Custodian of such Accounts Receivable Subsidiary or for all or
substantially all of the property of such Accounts Receivable Subsidiary, or
(C) orders the liquidation of such Accounts Receivable Subsidiary, and, with
respect to clause (ii) hereof, the order or decree remains unstayed and in
effect for 60 consecutive days.
Section 21 Excess Cash. Not later than 20 Business Days after any
date on which the Accumulated Amount (as defined below) exceeds $50,000,000,
the Company shall make an irrevocable, unconditional offer (an "Excess Cash
Offer") to the Holders to purchase the maximum amount of Notes which could be
acquired by application of the Accumulated Amount as defined below (the "Excess
Cash Offer Amount"), at a purchase price (the "Excess Cash Offer Price") equal
to 105% of the Accreted Value of the Senior Secured Discount Notes and the
principal amount of the Senior Secured Notes for offers made on or prior to
December 31, 1997, at a price equal to 108% of the Accreted Value of the Senior
Secured Discount Notes and the principal amount of the Senior Secured Notes for
offers made during the period from January 1, 1998 through June 15, 2000 and
thereafter at the optional redemption prices set forth under Article III, in
each case, plus accrued and unpaid interest, if any, to and including, the date
the Notes tendered are purchased and paid for in accordance with this
Indenture, which date shall be no later than 25 Business Days after the first
date on which the Excess Cash Offer is required to be made (the "Excess Cash
Purchase Date"). The Excess Cash Offer Amount required to be paid hereunder
shall be reduced by the amount needed to pay the cash interest on the Notes
through maturity (less any interest payable to the Company on the TARC
Intercompany Loan, and the TransTexas Intercompany Loan and any other
intercompany loan payable to the Company) after giving effect to the Notes
repurchased pursuant to the Excess Cash Offer (the "Interest Reserve Amount").
The Company shall send notice of an Excess Cash Offer at least 20 Business Days
prior to the close of business on the third Business Day prior to the Excess
Cash Purchase Date (the "Final Put Date"), by first-class mail, to each Holder
at his address set forth upon the registry of the Company, with a copy to the
Trustee. The notice to the Holders will contain all
72
79
information, instructions, and materials required by applicable law or
otherwise material to such Holders' decision to tender Notes pursuant to the
Excess Cash Offer. An amount equal to the aggregate of all Excess Cash received
by the Company is referred to as the "Accumulated Amount." Prior to making any
Excess Cash Offer, the Company shall invest the Accumulated Amount only in cash
and Cash Equivalents. The Company may, at its option, elect to make an Excess
Cash Offer in the manner specified herein prior to the time that the
Accumulated Amount exceeds $50,000,000.
To the extent applicable and if required by law, the Company shall
comply with Section 14 of the Exchange Act and the provisions of Regulation 14E
and any other tender offer rules under the Exchange Act and other securities
laws, rules, and regulations which may then be applicable to any Excess Cash
Offer by the Company to purchase the Notes. The Company shall give the Trustee
prompt notice if the Accumulated Amount exceeds $50,000,000.
On or before an Excess Cash Purchase Date, the Company shall (a)
accept for payment Notes or portions thereof properly tendered pursuant to the
Excess Cash Offer prior to the close of business on the Final Put Date (on a
pro rata basis between the issues (the maximum extent possible) based on the
Value of the Notes actually tendered if Notes with a Value in excess of the
Value of Notes to be acquired are tendered and not withdrawn), (b) deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the Excess Cash Offer
Price through the Excess Cash Purchase Date of all Notes or portions thereof so
accepted, and (c) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail or deliver to Holders of
Notes so accepted, payment in an amount equal to the Excess Cash Offer Price
through the Excess Cash Purchase Date for such Notes. The Trustee shall
promptly cancel all Notes accepted by the Company pursuant to the Excess Cash
Offer and authenticate and mail or deliver to the Holders of Notes so accepted
a new Note equal in Value to any unpurchased portion of the Note surrendered.
Any Notes not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. The Company shall publicly announce the results of the
Excess Cash Offer on or as soon as practicable after the Excess Cash Payment
Date.
If the amount required to acquire all Notes tendered by Holders
pursuant to the Excess Cash Offer (the "Excess Cash Acceptance Amount") shall
be less than the aggregate Excess Cash Offer Amount, the excess of the Excess
Cash Offer Amount over the Excess Cash Acceptance Amount shall be (i) invested
in cash or Cash Equivalents, (ii) used by the Company to make a Note Repurchase
or (iii) used by the Company to make loans to its Subsidiaries, provided that
such loans (x) are on terms no less favorable to the Company than the economic
terms described to the Holders of Notes in the Excess Cash Offer, (y) are made
to the parties described in the Excess Cash Offer, and (z) have a maturity date
which is not after the maturity date of the Notes. Upon consummation of any
Excess Cash Offer made in accordance with the terms of the Indenture, the
Accumulated Amount will be reduced to zero.
Notwithstanding anything contained in the foregoing to the contrary,
the Company shall immediately deposit any cash received by it that the Company
has allocated to the Interest Reserve Amount or the provision for income taxes,
in each case in the manner contemplated by the definition of "Excess Cash,"
into a segregated cash collateral account in which the Trustee has a perfected
first priority security interest pending such uses.
Notwithstanding anything contained in the foregoing to the contrary,
at any time after June 15, 2000, the Company may elect to make an optional
redemption at the prices and in the manner described under Article III in lieu
of making an Excess Cash Offer. In the event that the Company makes a
73
80
redemption pursuant to Article III, the Accumulated Amount shall be reduced by
an amount equal to the redemption price actually paid in connection with such
redemption.
Section 22 Third Party Consents. TransTexas shall use its best
efforts to obtain, as soon as reasonably practicable, all consents and
approvals that may be required under any Third Party Consent Agreement (i) for
the creation, perfection, maintenance or protection of a valid security
interest in, or lien against, any of the Collateral in favor of the Trustee or
(ii) upon foreclosure of the Trustee's lien, for the Trustee to acquire or
sell, assign, dispose of or otherwise transfer such Third Party Consent
Agreement, or any right or interest of the Company or any of its Subsidiaries
thereunder, or for the Trustee to exercise any or all of its rights or remedies
under any of the Security Documents. The use of its "best efforts" shall not
require TransTexas to pay consideration for such consents or approvals or to
take actions other than use its good faith efforts to request such consents and
approvals. TransTexas shall not, and shall not permit any of its Subsidiaries
to, permit to exist as of the end of any fiscal quarter, any Third Party
Consent Agreement if, after giving effect to such Third Party Consent
Agreement, the aggregate of all Third Party Consent Agreements entered into
after the date of this Indenture includes or relates to properties constituting
more than 25% of the net acreage owned or leased by TransTexas or any of its
Subsidiaries or Nominees after the date of this Indenture.
Section 23 Limitation on Assets Held by Nominees. Within 270 days
of the acquisition of any Nominee Property by any Nominee (to the extent the
aggregate expenditures for all then existing Nominee Property exceeds
$10,000,000), TransTexas and its Subsidiaries shall cause such Nominee to
assign and transfer to TransTexas, or such of its Subsidiaries, as the case may
be, all of such Nominee's right, title and interest in and to such Nominee
Property.
Section 24 Additional Interest Excess Cash Offer. Upon the
occurrence of a TARC Interest Increase or a TransTexas Interest Increase the
Company shall be obligated to make an offer to purchase the Notes upon the
terms and subject to the conditions described below. Not later than 20 Business
Days after any date on which the Additional Interest Accumulated Amount (as
defined below) exceeds $10,000,000, the Company shall make an irrevocable,
unconditional offer (an "Additional Interest Excess Cash Offer") to the Holders
to purchase the maximum amount of Notes which could be acquired by application
of the Additional Interest Accumulated Amount (as defined below) (the
"Additional Interest Excess Cash Offer Amount"), at a purchase price (the
"Additional Interest Excess Cash Offer Price") equal to 101% of the Accreted
Value of the Senior Secured Discount Notes and the principal amount of the
Senior Secured Notes, in each case, plus accrued and unpaid interest, if any,
to and including the date the Notes tendered are purchased and paid for in
accordance with the Indenture, which date shall be no later than 25 Business
Days after the first date on which the Additional Interest Excess Cash Offer is
required to be made (the "Additional Interest Excess Cash Purchase Date"). The
Company shall send notice of an Additional Interest Excess Cash Offer at least
20 Business Days prior to the close of business on the third Business Day prior
to the Additional Interest Excess Cash Purchase Date (the "Additional Interest
Final Put Date"), by first-class mail, to each Holder at his address set forth
upon the registry of the Company, with a copy to the Trustee. The notice to the
Holders will contain all information, instructions, and materials required by
applicable law or otherwise material to such Holders' decision to tender Notes
pursuant to the Additional Interest Excess Cash Offer. An amount equal to the
aggregate of all Additional Interest Excess Cash received by the Company is
referred to as the "Additional Interest Accumulated Amount." Prior to making
any Additional Interest Excess Cash Offer, the Company shall invest the
Additional Interest Accumulated Amount only in cash and Cash Equivalents. The
Company may, at its option, elect to make an Additional Interest Excess Cash
Offer in the manner specified herein prior to the time that the Additional
Interest Accumulated Amount exceeds $10,000,000.
74
81
To the extent applicable and if required by law, the Company shall
comply with Section 14 of the Exchange Act and the provisions of Regulation l4E
and any other tender offer rules under the Exchange Act and other securities
laws, rules, and regulations which may then be applicable to any Additional
Interest Excess Cash Offer by the Company to purchase the Notes. The Company
shall give the Trustee prompt notice if the Additional Interest Accumulated
Amount exceeds $10,000,000.
On or before an Additional Interest Excess Cash Purchase Date, the
Company shall (a) accept for payment Notes or portions thereof properly
tendered pursuant to the Additional Interest Excess Cash Offer prior to the
close of business on the Additional Interest Final Put Date (on a pro rata
basis between the issues (to the maximum extent possible) based on the Value of
the Notes actually tendered if Notes with a Value in excess of the Value of
Notes to be acquired are tendered and not withdrawn), (b) deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Additional Interest Excess
Cash Offer Price through the Additional Interest Excess Cash Purchase Date of
all Notes or portions thereof so accepted, and (c) deliver to the Trustee Notes
so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted, payment in an amount
equal to the Additional Interest Excess Cash Offer Price through the Additional
Interest Excess Cash Purchase Date for such Notes. The Trustee shall promptly
cancel all Notes accepted by the Company pursuant to the Additional Interest
Excess Cash Offer and authenticate and mail or deliver to the Holders of Notes
so accepted a new Note equal in Value to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Additional Interest Excess Cash Offer on or as soon as
practicable after the Additional Interest Excess Cash Payment Date.
If the amount required to acquire all Notes tendered by Holders
pursuant to the Additional Interest Excess Cash Offer (the "Additional Interest
Excess Cash Acceptance Amount") shall be less than the aggregate Additional
Interest Excess Cash Offer Amount, the excess of the Additional Interest Excess
Cash Acceptance Amount shall be (i) invested in cash or Cash Equivalents, (ii)
used by the Company to make a Note Repurchase or (iii) used by the Company to
make loans to its Subsidiaries, provided that such loans (x) are on terms no
less favorable to the Company than the economic terms described to the Holders
in the Additional Interest Excess Cash Offer, (y) are made to the parties
described in the Excess Cash Offer and (z) have a maturity date which is not
after the maturity date of the Notes. Upon consummation of any Additional
Interest Excess Cash Offer made in accordance with the terms of the Indenture,
the Additional Interest Accumulated Amount will be reduced to zero.
Notwithstanding anything contained in the foregoing to the contrary,
the Company shall immediately deposit any cash received by it that the Company
has allocated to the Additional Interest Reserve Amount into a segregated cash
collateral account in which the Trustee has a perfected first priority security
interest pending such uses.
75
82
ARTICLE V
SUCCESSOR CORPORATION
Section 1 When the Company May Merge, Etc.
(a) The Company shall not, and shall not permit TARC or TransTexas
to, consolidate with or merge with or into any other Person, or, directly or
indirectly, sell, lease, assign, transfer or convey all or substantially all of
its assets (computed on a consolidated basis), to another Person or group of
Persons acting in concert, whether in a single transaction or through a series
of related transactions, unless:
(1) either (a) the Company, TARC or TransTexas, as the case
may be, shall be the continuing Person, or (b) the Person (if other than the
Company) formed by such consolidation or into which the Company, TARC or
TransTexas, as the case may be, is merged or to which all or substantially all
of the properties and assets of the Company, TARC or TransTexas, as the case
may be, are transferred as an entirety or substantially as an entirety (the
Company, TARC or TransTexas, as the case may be, or such other Person being
hereinafter referred to as the "Surviving Person") shall be a corporation or
partnership organized and validly existing under the laws of the United States,
any State thereof or the District of Columbia, and shall expressly assume, by
an indenture supplemental hereto and any supplements to any Security Documents
as the Trustee in its sole discretion may require, executed and delivered to
the Trustee on or prior to the consummation of such transaction, in form
satisfactory to the Trustee, all the obligations of the Company, TARC or
TransTexas, as the case may be, under the Notes, the TARC Intercompany Loan,
the TransTexas Intercompany Loan, the Security Documents, the Registration
Rights Agreements, and this Indenture;
(2) No Default or Event of Default shall exist or shall
occur immediately after giving effect to such transaction;
(3) on a pro forma consolidated basis, immediately after
giving effect to such transaction and the assumption of the obligations
contemplated by clause (1), above, and the incurrence or anticipated incurrence
of any Debt or Disqualified Capital Stock to be incurred or issued in
connection therewith, (x) the Net Worth of the Surviving Person is at least
equal to the Net Worth of such predecessor or transferring entity immediately
prior to such transaction and (y) except for a merger of TARC into a wholly
owned Subsidiary of the Company or its wholly owned Subsidiary incorporated in
the State of Delaware solely for the purpose of facilitating a reincorporation
in Delaware or a repurchase of the TARC Warrants, the Surviving Person could
incur $1.00 of additional Senior Debt pursuant to the third or fourth paragraph
of Section 4.11, as applicable (in all cases for this purpose only, as if the
Phase I Completion Date has occurred);
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, assignment, or transfer and such supplemental indenture comply with
this Article V and that all conditions precedent herein provided relating to
such transaction have been satisfied; and
(5) except for a merger of TARC into a wholly owned
Subsidiary of the Company or its wholly owned Subsidiary incorporated in the
State of Delaware solely for the purpose of facilitating a reincorporation in
Delaware or a repurchase of the TARC Warrants, at the time of or within 120
days after the occurrence of the event specified above, the Notes have not been
or are not downgraded by Standard
76
83
& Poor's Corporation, Inc., Moody's Investors Service, Inc. or any successor
rating agencies to either entity to a rating below that which existed
immediately prior to the time the event specified above is first publicly
announced.
For purposes of this Section 5.1, the Consolidated Fixed Charge
Coverage Ratio shall be determined on a pro forma consolidated basis (giving
effect to such transaction) for the four fiscal quarters immediately preceding
such transaction.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, TARC or
TransTexas, which properties and assets, if held by the Company, TARC or
TransTexas instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Company, TARC or TransTexas, as the
case may be, on a consolidated basis, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company, TARC or
TransTexas, as the case may be.
(c) Notwithstanding anything contained in the foregoing to the
contrary, any Subsidiary of TARC or TransTexas with a Net Worth greater than
zero, may merge into TARC or TransTexas, respectively (or a wholly owned
Subsidiary of TARC or TransTexas, respectively) at any time, provided, that
TARC or TransTexas, as the case may be, shall have delivered to the Trustee an
Officers' Certificate stating that such Subsidiary has a Net Worth greater than
zero and such merger does not result in a Default or an Event of Default
hereunder. Notwithstanding anything contained in the foregoing, an Accounts
Receivable Subsidiary may merge into TARC, provided, that such merger does not
result in a Default or Event of Default hereunder.
(d) Notwithstanding anything contained in this Article V to the
contrary, none of TARC or TransTexas may merge into the Company or any of its
Subsidiaries.
Section 2 Successor Corporation Substituted. Upon any
consolidation or merger, or any transfer of assets in accordance with Section
5.1, the Surviving Person formed by such consolidation or into which the
Company, TARC or TransTexas, as the case may be, is merged or to which such
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company, TARC or TransTexas, as the case may be,
under this Indenture with the same effect as if such Surviving Person had been
named as the Company, TARC or TransTexas, as the case may be, herein. When a
Surviving Person duly assumes all of the obligations of the Company pursuant
hereto and pursuant to the Notes, the predecessor shall be released from such
obligations.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 1 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be caused voluntarily or involuntarily or
effected, without limitation, by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
77
84
(a) default in the payment of any interest upon any Note as and when
the same becomes due and payable, and the continuance of such default for a
period of 30 days;
(b) default in the payment of all or any part of the principal of (or
premium, if any, applicable to), the Notes when and as the same becomes due and
payable at maturity, redemption, by acceleration, or otherwise, including
default in the payment of the Change of Control Purchase Price in accordance
with Article XI, the Additional Interest Excess Cash Offer Price in accordance
with Section 4.24, or the Excess Cash Offer Price in accordance with Section
4.21;
(c) default in the observance or performance of, or breach of, any
covenant, agreement or warranty of the Company or any of its Subsidiaries
contained in the Notes or this Indenture or any of the Security Documents
(other than a default in the performance of any covenant, agreement or warranty
which is specifically dealt with elsewhere in this Section 6.1), and
continuance of such default or breach for the period and after the notice, if
any, specified below;
(d) a default which extends beyond any stated period of grace
applicable thereto, including any extension thereof, under any mortgage,
indenture or instrument under which there is outstanding any Debt of the
Company or any of its Subsidiaries with an aggregate principal amount in excess
of $25,000,000, or failure to pay such Debt at its stated maturity, provided
that a waiver by all of the lenders of such debt of such default shall
constitute a waiver hereunder for the same period;
(e) a decree, judgment, or order by a court of competent jurisdiction
shall have been entered adjudging the Company or any of its Subsidiaries as
bankrupt or insolvent, or ordering relief against the Company or any of its
Subsidiaries in response to the commencement of an involuntary bankruptcy case,
or approving as properly filed a petition seeking reorganization or liquidation
of the Company or any of its Subsidiaries under any bankruptcy or similar law,
and such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree or order of a court of competent jurisdiction
over the appointment of a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of the Company, any of its Subsidiaries, or of the
property of any such Person, or for the winding up or liquidation of the
affairs of any such Person, shall have been entered, and such decree, judgment,
or order shall have remained in force undischarged and unstayed for a period of
60 days;
(f) the Company or any of its Subsidiaries shall institute voluntary
bankruptcy proceedings, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization or liquidation under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or shall consent
to the appointment of a Custodian, receiver, liquidator, trustee, or assignee
in bankruptcy or insolvency of it or any of its assets or property, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or shall,
within the meaning of any Bankruptcy Law, become insolvent, fail generally to
pay its debts as they become due, or take any corporate action in furtherance
of or to facilitate, conditionally or otherwise, any of the foregoing;
(g) final judgments not covered by insurance for the payment of
money, or the issuance of any warrant of attachment against any portion of the
property or assets of the Company or any Subsidiary, which, in the aggregate,
equal or exceed $25,000,000 at any one time shall be entered against the
Company or any of its Subsidiaries by a court of competent jurisdiction and not
be stayed, bonded or discharged for a period (during which execution shall not
be effectively stayed) of 60 days (or, in the case of any such
78
85
final judgment which provides for payment over time, which shall so remain
unstayed, unbonded or undischarged beyond any applicable payment date provided
therein);
(h) any of the Security Documents shall for any reason cease to be in
full force and effect (except where no material adverse effect to the Holders
would result), or shall cease to give the Trustee for the ratable benefit of
the Holders the Liens, rights, powers and privileges purported to be created
thereby including but not limited to, a perfected security interest in, and
Lien on, the Collateral in accordance with the terms thereof, except where the
failure to have such Lien, rights, powers and privileges shall not have a
material adverse effect on the Holders;
(i) Independent Directors not constituting a majority of the Board of
Directors of the Company for a period of 90 days in the aggregate in any
twelve-month period;
(j) if the Phase I Completion Date has not occurred by the Required
Phase I Completion Date; or
(k) if the Phase II Completion Date has not occurred by January 31,
2000.
If a default occurs and is continuing and if it is known to the
Trustee, the Trustee must, within 90 days after the occurrence of such default,
give to the Holders notice of such default; provided, that, except in the case
of default in payment of principal of, premium, if any, or interest on the
Notes, including a default in the payment of the Excess Cash Offer Price,
Additional Interest Excess Cash Offer Price or Change of Control Purchase Price
as required by this Indenture, the Trustee will be protected in withholding
such notice if it in good faith determines that the withholding of such notice
is in the interest of the Holders.
A Default under clause (c) above (other than in the case of any
Defaults under Sections 4.3, 4.11, 4.14, 4.21, 4.24 or 5.1, which Defaults
shall be Events of Default without the notice specified in this paragraph or
Section 4.7(c) and upon the passage of 10 days) is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
principal amount of the outstanding Notes notify the Company and the Trustee of
the Default, and the Company does not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." Such notice shall
be given by the Trustee if so requested by the Holders of at least 25% in
principal amount of the Notes then outstanding.
In the case of any Event of Default pursuant to the provisions of this
Section 6.1 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company or any Subsidiary with the intention
of avoiding the period of time the Notes are not optionally redeemable or the
payment of the premium which the Company would have to pay if the Company then
had elected to redeem the Notes pursuant to Paragraph 5 of the Notes, an
equivalent premium (or, in the case of an Event of Default prior to the time
optional redemptions are permitted, to the extent permitted by law, a premium
equal to the stated interest rate of the Notes multiplied by the quotient of
(i) the number of full years left to maturity plus one, divided by (ii) seven)
shall also become and be immediately due and payable to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary
notwithstanding.
Section 2 Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
6.1(e) or (f) relating to the Company or its Subsidiaries) occurs and is
continuing, then, and in every such case, unless the principal of all of the
Notes
79
86
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate Value of then outstanding Notes, by a notice in
writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Notes (or the
Change of Control Purchase Price if the Event of Default includes failure to
pay the Change of Control Purchase Price), determined as set forth below,
including in each case accrued interest thereon, to be due and payable
immediately. If an Event of Default specified in Section 6.1(e) or (f)
relating to the Company or its Subsidiaries occurs, all principal and accrued
interest on the Notes shall be immediately due and payable on all outstanding
Notes without any declaration or other act on the part of the Trustee or the
Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate Value of then outstanding Notes, by written notice to the
Company and the Trustee, may waive, on behalf of all Holders, any such
declaration of acceleration if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(1) all accrued but unpaid interest on all Notes,
(2) the principal of (and premium, if any, applicable to) any Notes
which would become due otherwise than by such declaration of acceleration, and
accrued but unpaid interest thereon at the rate borne by the Notes,
(3) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Notes,
(4) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and
(b) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Notes which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.12, including, if applicable, any Event of Default
relating to the covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver
shall be effective for any Event of Default or event which with notice or lapse
of time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of (x) 66
2/3% in aggregate Value of the Notes or (y) the affected Holder of each of the
outstanding Notes, unless (x) 66 2/3% in aggregate Value of the Notes or (y)
all such affected Holders, respectively, agree, in writing, to waive such Event
of Default or event. No such waiver shall cure or waive any subsequent default
or impair any right consequent thereon.
Section 3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (1) or (2) of Section 6.1
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal, premium (if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Notes, and, in addition thereto, such further amount as shall
be sufficient to cover the
80
87
costs and expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts within 10 days of such
demand, the Trustee, in its own name and as trustee of an express trust in
favor of the Holders, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Notes and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
The Trustee shall also be authorized to take whatever additional
action at law or in equity may appear to be necessary or desirable to collect
the monies necessary to pay the principal, premium (if any) and interest on the
Notes.
Section 4 Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Notes or the
property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
or any obligor for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise to take
any and all actions under the TIA, including
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any debtor-in-possession or Custodian or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
81
88
Section 5 Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
Section 6 Priorities. Subject to the provisions of the
Intercreditor Agreements, any money collected by the Trustee pursuant to this
Article VI shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal, premium (if any) or interest, upon presentation of the Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest on, the Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium (if any) and interest
respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
Section 7 Limitation on Suits. No Holder of any Note shall have
any right to order or direct the Trustee to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of then
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to
82
89
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.
Section 8 Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision of this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium (if any) and
interest on, such Note on the Maturity Dates of such payments as expressed in
such Note and to institute suit for the enforcement of any such payment after
such respective dates, and such rights shall not be impaired without the
consent of such Holder.
Section 9 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in Section 2.7, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 10 Delay or Omission Not Waiver. No delay or omission by
the Trustee or by any Holder of any Note to exercise any right or remedy
arising upon any Event of Default shall impair the exercise of any such right
or remedy or constitute a waiver of any such Event of Default. Every right and
remedy given by this Article VI or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 11 Control by Holders. The Holder or Holders of a majority
in aggregate Value of then outstanding Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred upon the Trustee,
provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction or
that such action may involve the Trustee in personal liability, and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 12 Waiver of Past Default. Subject to Section 6.8, the
Holder or Holders of not less than a majority in aggregate Value of the
outstanding Notes may, on behalf of all Holders, prior to the declaration of
the maturity of the Notes, waive any past default hereunder and its
consequences, except a default
(a) in the payment of the principal of, premium, if any, or interest
on, any Note as specified in clauses (a) and (b) of Section 6.1, or
(b) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the Holder of each
outstanding Note affected or 66 2/3% in aggregate Value of the Notes at the
time outstanding, as the case may be; provided that such a default may be
waived by
83
90
the consent of Holders of each outstanding Note affected or 66 2/3% in
aggregate value of the Notes outstanding, as the case may be.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
Section 13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted to be taken by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in aggregate principal amount
of the outstanding Notes, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any) or interest on,
any Note on or after the respective Maturity Date expressed in such Note
(including, in the case of redemption, on or after the Redemption Date).
Section 14 Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 1 Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no others, and no covenants or obligations shall
be implied in or read into this Indenture which are adverse to the Trustee.
84
91
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.2 or Section 6.11.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or at the request, order or direction of the
Holders 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.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section
7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
(g) The Trustee shall execute and deliver the Intercreditor
Agreements and any Subordination Agreements as provided in Section 12.2.
Section 2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting on any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
85
92
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers.
(e) The Trustee 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 Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Whenever by the terms of this Indenture, the Trustee shall be
required to transmit notices or reports to any or all Holders, the Trustee
shall be entitled to rely on the information provided by the Registrar as to
the names and addresses of the Holders as being correct. If the Registrar is
other than the Trustee, the Trustee shall not be responsible for the accuracy
of such information.
Section 3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries, or their respective
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
Section 4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the Notes
and it shall not be accountable for the Company's use of the proceeds from the
Notes, and it shall not be responsible for (i) the use or application of any
funds received by a Paying Agent other than the Trustee, (ii) any statement in
the Notes, other than the Trustee's certificate of authentication or (iii) the
sufficiency of the collateral for the Notes.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the
part of the Company hereunder or in any Security Documents, except as
specifically set forth herein or therein.
Section 5 Notice of Default. If a Default or an Event of Default
occurs and is continuing and if it is known to the Trustee pursuant to Section
4.7(c), the Trustee shall mail to each Noteholder notice of the uncured Default
or Event of Default within 90 days after such Default or Event of Default
occurs. Except in the case of a Default or an Event of Default in payment of
principal (or premium, if any,) of, or interest on, any Note (including all
payments due on any Maturity Date), the Trustee may withhold the notice if and
so long as the board of directors, the executive committee or a trust committee
of directors and/or responsible officers of the Trustee in good faith
determines that withholding the notice is in the interest of the Holders.
Section 6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall, if required, mail to each Noteholder a brief report dated as of
such May 15 that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Sections 313(b) and 313(c).
86
93
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if
any, on which the Notes are listed.
Section 7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time compensation for its services (in whatever capacity
rendered) in accordance with the Trustee's fee schedule, as may be amended from
time to time. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee)
and each of its officers, directors, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited to,
compensation, disbursements and expenses of the Trustees' agents and counsel),
loss or liability incurred by it without negligence or bad faith on its part,
arising out of or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company's expense in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel; provided that the Company will not be
required to pay such fees and expenses if it assumes the Trustee's defense and
there is no conflict of interest as reasonably determined by the Trustee
between the Company and the Trustee in connection with such defense. The
Company need not pay for any settlement made without its written consent, which
shall not be unreasonably withheld. The Company need not reimburse any expense
or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets held or collected by
the Trustee, in its capacity as Trustee, except assets held in trust to pay
principal (and premium, if any,) or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII and any
rejection or termination of this Indenture under any Bankruptcy Law.
Section 8 Replacement of Trustee. The Trustee may resign by so
notifying the Company in writing. The Holder or Holders of a majority in
principal amount of the outstanding Notes may remove the Trustee by so
notifying the Company and the Trustee in writing and may appoint a successor
trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
87
94
(3) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holder or Holders of a majority in principal amount of the Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 7.7
have been paid, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holder or Holders of at least 10% in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
Section 9 Successor Trustee by Merger, Etc. If the Trustee
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 otherwise eligible hereunder,
be the successor Trustee.
Section 10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1), (a)(2) and (a)(5).
The Trustee shall comply with TIA Section 310(b).
Section 11 Preferential Collection of Claims against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 12 No Bond. The Trustee shall not be required to give any
bond or surety in respect to the execution of its trusts, powers, rights and
duties under this Indenture or otherwise in respect of the premises.
Section 13 Condition to Action. Notwithstanding anything elsewhere
in this Indenture to the contrary, the Trustee shall have the right, but shall
not be required, to demand, in respect of the authentication of any Notes or
any other action within the purview of this Indenture, any showings,
certificates, opinions, or other information, or corporate action or evidence
thereof in addition to that by
88
95
the terms hereof required, as a condition of such action by the Trustee if
reasonably deemed desirable by the Trustee for the purpose of establishing the
right to the authentication of any Notes or the taking of any other action by
the Trustee.
Section 14 Investment. The Trustee shall not be responsible or
liable for any loss suffered in connection with any investment of funds made by
it at the direction of the Company.
ARTICLE VIII
SATISFACTION AND DISCHARGE
Section 1 Satisfaction, Discharge of the Indenture and Defeasance
of the Notes. The Company shall be deemed to have paid and discharged the
entire Debt on the Notes and the provisions of this Indenture shall cease to be
of further effect (subject to Sections 8.3 and 8.7), if:
(a) The Company irrevocably deposits in trust for the benefit of the
Holders of the Notes with the Trustee, pursuant to an irrevocable trust
agreement in form and substance reasonably satisfactory to the Trustee, (i)
U.S. Legal Tender, (ii) U.S. Government Obligations or (iii) a combination
thereof which, after payment of all Federal, state and local taxes or other
charges or assessments in respect thereof payable by the Trustee, through the
payment of principal and interest will provide, not later than one day before
the due date of payment in respect of the Notes, U.S. Legal Tender in an amount
which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof (in form and
substance reasonably satisfactory to the Trustee) delivered to the Trustee, is
sufficient to pay the principal of, premium, if any, and each installment of
principal and interest on the Notes then outstanding, on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(b) Such deposits shall not cause the Trustee to have a conflicting
interest as defined in and for purposes of the TIA;
(c) No Default or Event of Default relating to clauses (e) or (f) of
Section 6.1 shall have occurred or be continuing on the date of such deposit or
shall occur on or before the 91st day (or one day after such greater period of
time in which any such deposit of trust funds may remain subject to set aside
or avoidance under bankruptcy or insolvency laws) after the date of such
deposit, and such deposit will not result in a Default or Event of Default
under this Indenture or a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Subsidiary of the
Company is a party or by which it or its property is bound;
(d) The deposit, defeasance and discharge will not be deemed, or
result in, a Federal income taxable event to the Holders of the Notes and the
Holders will be subject to Federal income tax in the same amounts and in the
same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(e) The deposit shall not result in the Company, the Trustee or the
trust being subject to regulation under the Investment Company Act of 1940;
(f) After the passage of 90 days (or any greater period of time in
which any such deposit of trust funds may remain subject to set aside or
avoidance under Bankruptcy Laws insofar as those laws apply to
89
96
the Company) following the irrevocable deposit of the trust funds, such funds
will not be subject to any set aside or avoidance under Bankruptcy Laws
affecting creditors' rights generally; and
(g) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel (who may be outside counsel to the Company, but not
in-house counsel to the Company), each in form and substance satisfactory to
the Trustee, stating that all conditions precedent specified herein relating to
the defeasance contemplated by this Section 8.1 have been complied with.
In the event all or any portion of the Notes are to be redeemed
through such irrevocable trust, the Company must make arrangements satisfactory
to the Trustee, at the time of such deposit, for the giving of the notice of
such redemption or redemptions by the Trustee in the name and at the expense of
the Company.
In the event that the Company takes the necessary action to comply
with the provisions described in this Section 8.1 and the Notes are declared
due and payable because of the occurrence of an Event of Default within the
time period specified in Section 8.1(c), or at any time under Section 8.3, the
Company will remain liable for all amounts due on the Notes at the time of
acceleration resulting from such Event of Default in excess of the amount of
U.S. Legal Tender and U.S. Government Obligations deposited with the Trustee
pursuant to this Section 8.1 at the time of such acceleration.
Section 2 Termination of Obligations Upon Cancellation of the
Notes. In addition to the Company's rights under Section 8.1, the Company may
terminate all of its respective obligations under this Indenture (subject to
Sections 8.3 and 8.7) when:
(a) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.7) have been delivered to the Trustee for
cancellation;
(b) the Company has paid or caused to be paid all sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture have been
complied with.
Section 3 Survival of Certain Obligations. Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in
Section 8.1 or 8.2, the respective obligations of the Company and the Trustee
under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 2.12, Article III, 4.1, 4.2,
4.4, 6.8, 7.7, 7.8, 8.5, 8.6, 8.7 and this Section 8.3 shall survive until the
Notes are no longer outstanding, and thereafter the obligations of the Company
and the Trustee under Sections 6.8, 7.7, 7.8, 8.5, 8.6, 8.7 and this Section
8.3 shall survive. Nothing contained in this Article VIII shall abrogate any
of the obligations or duties of the Trustee under this Indenture.
Section 4 Acknowledgment of Discharge by Trustee. After (i) the
conditions of Section 8.1 or 8.2 have been satisfied, (ii) the Company has paid
or caused to be paid all other sums payable hereunder by the Company and (iii)
the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent referred to in
clause (i), above, relating to the satisfaction and discharge of this Indenture
have been complied with, the Trustee upon request shall
90
97
acknowledge in writing the discharge the Company's obligations under this
Indenture except for those surviving obligations specified in Section 8.3.
Section 5 Application of Trust Assets. The Trustee shall hold any
U.S. Legal Tender or U.S. Government Obligations deposited with it in the
irrevocable trust established pursuant to Section 8.1. The Trustee shall apply
the deposited U.S. Legal Tender or U.S. Government Obligations, together with
earnings thereon, through the Paying Agent (other than the Company or any
Subsidiary of the Company), in accordance with this Indenture and the terms of
the irrevocable trust agreement, to the payment of principal of and interest on
the Notes.
Section 6 Repayment to the Company. Upon termination of the trust
established pursuant to Section 8.1, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them.
The Trustee and the Paying Agent shall pay to the Company upon
request, and, if applicable, in accordance with the irrevocable trust
established pursuant to Section 8.1, any U.S. Legal Tender or U.S. Government
Obligations held by them for the payment of principal of or interest on the
Notes that remain unclaimed for two years after the date on which such payment
shall have become due; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may, at the expense of
the Company, cause to be published once, in a newspaper customarily published
on each Business Day and of general circulation in the Borough of Manhattan,
The City of New York, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining shall be
repaid to the Company. After payment to the Company, Holders entitled to such
payment must look to the Company for such payment as general creditors unless
an applicable abandoned property law designates another Person.
Section 7 Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.1 or 8.2 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture, the Security Documents and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.1 or 8.2 until such
time as the Trustee or Paying Agent is permitted to apply all such U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 8.1 or 8.2;
provided, however, that if the Company has made any payment of principal of or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by Board
Resolutions, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto or amendments to the Security
91
98
Documents, the Intercreditor Agreements, the TransTexas Disbursement Agreement
or the Disbursement Agreement, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to cure any ambiguity, defect, or inconsistency, or to make any
other provisions with respect to matters or questions arising under this
Indenture, the Security Documents, the Intercreditor Agreement or the
Disbursement Agreement which shall not be inconsistent with the provisions of
this Indenture, provided such action pursuant to this clause (a) shall not
adversely affect the interests of any Holder in any respect;
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company or
to make any other change that does not adversely affect the rights of any
Holder, provided that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change does not adversely affect the rights of any
Holder;
(c) to provide for additional collateral for the Notes;
(d) to evidence the succession of another Person to the Company and
the assumption by any such successor of the obligations of the Company herein
and in the Notes in accordance with Article V; or
(e) to comply with the TIA.
Section 2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders. Subject to Section 6.8, with the consent of the Holders of
not less than a majority in aggregate Value of then outstanding Notes, by
written act of said Holders (including an electronic mechanism utilized by the
Depository Trust Company as a means of receiving consents or tenders of
securities) delivered to the Company and the Trustee, the Company, when
authorized by Board Resolutions, and the Trustee may amend or supplement this
Indenture, the Notes or any of the Security Documents or enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or the Notes or of modifying in any manner the rights of the
Holders under this Indenture or the Notes; provided, that no such modification
may, without the consent of the Holders of not less than 66 2/3 in aggregate
Value of the Notes at the time outstanding, (i) prior to a Change of Control,
reduce the Change of Control Purchase Price or alter the provisions of Article
XI or (ii) prior to the date upon which an Excess Cash Offer is required to be
made, reduce the Excess Cash Offer Price or alter the provisions of Section
4.21 in a manner adverse to the Holders, (iii) prior to the date upon which an
Additional Interest Excess Cash Offer is required to be made, reduce the
Additional Interest Excess Cash Offer Price or alter the provisions of Section
4.24 in a manner adverse to the Holders or (iv) alter the provisions of Article
XII or any of the Security Documents in a manner adverse to the Holders.
Subject to Section 6.8, the Holder or Holders of not less than a majority, in
aggregate Value of then outstanding Notes may waive compliance by the Company
with any provision of this Indenture or the Notes; provided, that no such
waiver may, without the consent of the Holders of not less than 66 2/3 in
aggregate Value of the Notes at the time outstanding, have the effect of (i)
prior to a Change of Control, reducing the Change of Control Purchase Price or
altering the provisions of Article XI or (ii) prior to the date upon which an
Excess Cash Offer is required to be made, reducing the Excess Cash Offer Price
or altering the provisions of Section 4.21 in a manner adverse to the Holders,
(iii) prior to the date upon which an Additional Interest Excess Cash Offer is
required to be made, reducing the Additional Interest Excess Cash Offer Price
or altering the provisions of Section 4.24 in a manner adverse
92
99
to the Holders or (iv) altering the provisions of Article XII or any of the
Security Documents in a manner adverse to the Holders. Notwithstanding any of
the above, however, no such amendment, supplemental indenture or waiver shall,
without the consent of the Holder of each outstanding Note affected thereby:
(a) reduce the percentage of Value of Notes whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture or the Notes;
(b) reduce the rate or extend the time for payment of interest on any
Note;
(c) (i) reduce the principal amount of any Note or (ii) after the
date upon which a Change of Control Offer is required to be made, reduce the
Change of Control Purchase Price or (iii) after the date upon which an Excess
Cash Offer is required to be made, reduce the Excess Cash Offer Price or (iv)
reduce the Offer Price or the Redemption Price or (v) after the date upon which
an Additional Interest Excess Cash Offer is required to be made, reduce the
Additional Interest Excess Cash Offer Price;
(d) change the Stated Maturity or the payment date of any installment
of principal of, or the payment date of any installment of interest on, any
Note;
(e) (i) alter the redemption provisions of Article III or of
paragraph 5 of the Notes or (ii) after the date upon which a Change of Control
Offer is required to be made, alter the terms or provisions of Article XI or
(iii) after the date upon which an Excess Cash Offer is required to be made,
alter the terms or provisions of Section 4.21 or (iv) after the date upon which
an Additional Interest Excess Cash Offer is required to be made, alter the
terms or provisions of Section 4.24; in any case, in a manner adverse to any
Holder;
(f) make any changes in the provisions concerning waivers of Defaults
or Events of Default by Holders of the Notes (except to increase any required
percentage or to provide that certain other provisions hereof cannot be
modified or waived without the consent of the Holders of each outstanding Note
affected thereby) or the rights of Holders to recover the principal or premium
of, interest on, or redemption payment with respect to, any Note;
(g) make any changes in Section 6.4, 6.7 or this third sentence of
this Section 9.2; or
(h) make the principal of, or the interest on, any Note payable with
anything or in any manner other than as provided for in this Indenture
(including changing the place of payment where, or the coin or currency in
which, any Note or any premium or the interest thereon is payable) and the
Notes as in effect on the date hereof.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2 or 9.4
becomes effective, it shall bind each Holder.
93
100
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or
waiver.
Section 3 Compliance with TIA. Every amendment, waiver or
supplement of this Indenture or the Notes shall comply with the TIA as then in
effect.
Section 4 Revocation and Effect of Consents. Until an amendment,
waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
his Note by written notice to the Company or the Person designated by the
Company as the Person to whom consents should be sent if such revocation is
received by the Company or such Person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Notes have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, regardless of whether such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal and premium of
and interest on a Note, on or after the respective dates set for such amounts
to become due and payable expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates.
Section 5 Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder of the Note to deliver it to the Trustee or require the Holder to put an
appropriate notation on the Note. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Any failure to make the appropriate notation
or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
Section 6 Trustee to Sign Amendments, Etc. The Trustee shall
execute any amendment, supplement or waiver authorized pursuant to this Article
IX, provided that the Trustee may, but shall not be obligated to, execute any
such amendment, supplement or waiver which affects the Trustee's own rights,
duties or immunities under this Indenture. The Trustee at the expense of the
Company shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
94
101
ARTICLE X
MEETINGS OF NOTEHOLDERS
Section 1 Purposes for Which Meetings May Be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to the
provisions of this Article X for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take any
other action authorized to be taken by Noteholders pursuant to any of the
provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
Section 2 Manner of Calling Meetings. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the City of New York, New York or
elsewhere as the Trustee shall determine. Notice of every meeting of
Noteholders, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed by the
Trustee, first-class postage prepaid, to the Company and to the Holders at
their last addresses as they shall appear on the registration books of the
Registrar, not less than 10 nor more than 60 days prior to the date fixed for a
meeting.
Any meeting of Noteholders shall be valid without notice if the
Holders of all Notes then outstanding are present in Person or by proxy, or if
notice is waived before or after the meeting by the Holders of all Notes
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 3 Call of Meetings by Company or Holders. In case at any
time the Company, pursuant to a Board Resolution, or the Holders of not less
than 10% in aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Noteholders to take any action
specified in Section 10.1, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or the Holders of Notes in the amount above specified
may determine the time and place in the City of New York, New York or elsewhere
for such meeting and may call such meeting for the purpose of taking such
action, by mailing or causing to be mailed notice thereof as provided in
Section 10.2, or by causing notice thereof to be published at least once in
each of two successive calendar weeks (on any Business Day during such week) in
a newspaper or newspapers printed in the English language, customarily
published at least five days a week of a general circulation in the City of
95
102
New York, State of New York, the first such publication to be not less than 10
nor more than 60 days prior to the date fixed for the meeting.
Section 4 Who May Attend and Vote at Meetings. To be entitled to
vote at any meeting of Noteholders, a Person shall (a) be a registered Holder
of one or more Notes, or (b) be a Person appointed by an instrument in writing
as proxy for the registered Holder or Holders of Notes. The only Persons who
shall be entitled to be present or to speak at any meeting of Noteholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 5 Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment. Notwithstanding any other provision of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Noteholders, in regard to proof
of the holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination
of proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall think
appropriate. Such regulations may fix a record date and time for determining
the Holders of record of Notes entitled to vote at such meeting, in which case
those and only those Persons who are Holders of Notes at the record date and
time so fixed, or their proxies, shall be entitled to vote at such meeting
regardless of whether they shall be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Holders of a majority
in principal amount of the Notes represented at the meeting and entitled to
vote.
At any meeting each Noteholder or proxy shall be entitled to one vote
for each $1,000 Value of Notes held or represented by him; provided, however
that no vote shall be cast or counted at any meeting in respect of any Notes
challenged as not outstanding and ruled by the chairman of the meeting to be
not then outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Notes held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of other
Noteholders. Any meeting of Noteholders duly called pursuant to the provisions
of Section 10.2 or Section 10.3 may be adjourned from time to time by vote of
the Holder or Holders of a majority in aggregate Value of the Notes represented
at the meeting and entitled to vote, and the meeting may be held as so
adjourned without further notice.
Section 6 Voting at the Meeting and Record to Be Kept. The vote
upon any resolution submitted to any meeting of Noteholders shall be by written
ballots on which shall be subscribed the signatures of the Holders of Notes or
of their representatives by proxy and the principal amount of the Notes voted
by the ballot. The permanent chairman of the meeting shall appoint two
inspectors of votes, who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Noteholders shall be prepared by the secretary of the meeting and there shall
be attached to such record the original reports of the inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that such notice was mailed as provided in Section 10.2 or published
96
103
as provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one
of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 7 Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting. Nothing contained in this Article X
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
Section 1 Repurchase of Notes at Option of the Holder Upon Change of
Control.
(a) In the event that a Change of Control occurs, each Holder of
Notes shall have the right, at such Holder's option, upon the terms and
conditions of this Article XI, to require the Company to repurchase all or any
part of such Holder's Notes (provided that the principal amount of such Notes
at maturity must be $1,000 or an integral multiple thereof) on a date that is
no later than 60 Business Days after the occurrence of a Change of Control (the
date on which the repurchase is effected being referred to herein as the
"Change of Control Payment Date"), at a cash purchase price (the "Change of
Control Purchase Price") equal to 101% of the Accreted Value thereof, in the
case of the Senior Secured Discount Notes or 101% of the principal amount
thereof, in the case of the Senior Secured Notes thereof, plus accrued and
unpaid interest, if any, in each case, on and including the Change of Control
Payment Date.
(b) Within 20 Business Days after the Company knows, or reasonably
should know, of the occurrence of a Change of Control, the Company shall make
an irrevocable unconditional offer (a "Change of Control Offer") to the Holders
to purchase for U.S. Legal Tender all of the Notes pursuant to the offer
described in clause (c) of this Section 11.1 at the Change of Control Purchase
Price. Within five Business Days after each date upon which the Company knows,
or reasonably should know, of the occurrence of a Change of Control requiring
the Company to make a Change of Control Offer pursuant to this Section 11.1,
the Company shall so notify the Trustee.
(c) Notice of a Change of Control Offer shall be sent, at least 20
Business Days prior to the Final Change of Control Put Date (as defined below),
by first class mail, by the Company to each Holder at its registered address,
with a copy to the Trustee. The notice to the Holders shall contain all
instructions and materials required by applicable law and shall contain or make
available to Holders other information material to such Holders' decision to
tender Notes pursuant to the Change of Control Offer. The notice, which shall
govern the terms of the Offer, shall state:
(1) that the Change of Control Offer is being made pursuant
to such notice and this Section 11.1 and that all Notes, or portions thereof,
tendered will be accepted for payment;
97
104
(2) the Change of Control Purchase Price, the Change of
Control Payment Date and the Final Change of Control Put Date (as defined
below);
(3) that any Note, or portion thereof, not tendered or
accepted for payment will continue to accrue interest, if interest is then
accruing;
(4) that, unless the Company defaults in depositing U.S.
Legal Tender with the Paying Agent in accordance with the last paragraph of
this clause (c), or payment is otherwise prevented, any Note, or portion
thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note, or portion
thereof, purchased pursuant to a Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this Indenture to
the contrary, be the Company or any Affiliate of the Company) at the address
specified in the notice prior to the close of business on the third Business
Day prior to the Change of Control Payment Date (the "Final Change of Control
Put Date");
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, prior to the close of business on the
Final Change of Control Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Notes
the Holder is withdrawing and a statement containing a facsimile signature that
such Holder is withdrawing his election to have such principal amount of Notes
purchased;
(7) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered; and
(8) a brief description of the events resulting in such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof properly tendered pursuant to the
Change of Control Offer prior to the close of business on the Final Change of
Control Put Date, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Change of Control Purchase Price (including accrued and
unpaid interest) of all Notes so tendered and (iii) deliver or cause to be
delivered to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the Change of Control Purchase Price
(including accrued and unpaid interest), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in Accreted
Value or principal amount, as applicable, to any unpurchased portion of the
Note surrendered. Any Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. Any such Change of
Control Offer shall comply with all applicable provisions of Federal and state
laws, rules and regulations, including those regulating tender offers, if
applicable, and, if such laws, rules or regulations require or prohibit any
action inconsistent with the foregoing, compliance by the Company with such
laws, rules and regulations will not constitute a breach of the Company's
obligations with respect to the foregoing.
98
105
ARTICLE XII
SECURITY
Section 1 Grant of Security Interest. In order to secure the
payment and performance of all obligations of the Company with respect to the
Notes including the due and punctual payment of the principal of, interest on
and premium, if any, on the Notes when and as the same shall become due and
payable, whether on an interest payment date, at a Maturity Date, by
acceleration, call for redemption or otherwise, and interest on the overdue
principal and interest, if any, of the Notes, the Company hereby covenants to
execute, deliver and file of record for the benefit of the Holders, the
Security Documents to which it is a party and this Indenture. The Security
Documents shall grant to the Trustee a security interest in the collateral
therein described and when filed shall be deemed hereby incorporated by
reference herein to the same extent and as fully as if set forth in their
entirety at this place, and reference is made hereby to each Security Document
for a more complete description of the terms and provisions thereof. Each
Holder, by accepting a Note, agrees to all of the terms and provisions of the
Security Documents and the Trustee agrees to all of the terms and provisions of
the Security Documents signed by it.
Section 2 Trustee's Execution of Intercreditor Agreements and
Subordination Agreements.
(a) The Trustee, at the Company's expense, will execute, deliver,
file and record, all instruments and do all acts and other things as may be
reasonably necessary to provide, pursuant to the Intercreditor Agreements, (i)
that the TransTexas Intercompany Loan and the TARC Intercompany Loan will be
subordinated in right of payment (except regularly scheduled payments, provided
no default under the indenture governing the Senior TransTexas Notes or the
Senior TARC Discount Notes and the Senior TARC Mortgage Notes, respectively,
exists or would result therefrom) and lien priority to the Senior TransTexas
Notes or the Senior TARC Discount Notes and the Senior TARC Mortgage Notes,
respectively, (ii) that (a) in the event of any liquidation or reorganization
of TransTexas or TARC, as the case may be, any cash or other assets paid or
distributed on account of the TransTexas Intercompany Loan or the TARC
Intercompany Loan, as the case may be, will be applied, after payment of
reasonable costs and expenses relating to obtaining such proceeds, to the
payment of the Senior TransTexas Notes or the Senior TARC Discount Notes and
the Senior TARC Mortgage Notes, as the case may be, and only after the Senior
TransTexas Notes or the Senior TARC Discount Notes and the Senior TARC Mortgage
Notes, as the case may be, have been paid in full, to the payment of the
TransTexas Intercompany Loan or the TARC Intercompany Loan, respectively, and
(b) in any other event, any such proceeds will be applied so as not to impair
or affect the right of the holders of the Senior TransTexas Notes or the Senior
TARC Discount Notes and the Senior TARC Mortgage Notes, to receive payments as
and when due (but nothing contained in the Intercreditor Agreements shall be
construed to prohibit, limit or otherwise affect the rights of TransTexas or
TARC to transfer, dispose of or otherwise deal with its properties and assets
included within the TransTexas Shared Collateral securing both the Senior
TransTexas Notes and the TransTexas Intercompany Loan or the TARC Shared
Collateral securing the Senior TARC Discount Notes, the Senior TARC Mortgage
Notes, and the TARC Intercompany Loan, respectively, and the proceeds thereof,
in any manner permitted under the indenture for the Senior TransTexas Notes and
the TransTexas Intercompany Loan or the indenture for the Senior TARC Discount
Notes and the Senior TARC Mortgage Notes, and the TARC Intercompany Loan or the
security documents relating thereto, respectively) and (iii) that
determinations regarding the exercise of remedies against the TransTexas Shared
Collateral or the TARC Shared Collateral, as the case may be, will be made by a
majority of the outstanding principal amount of the Senior TransTexas Notes and
the TransTexas Intercompany Loan, or the Senior TARC Discount Notes, the Senior
TARC Mortgage Notes, and the TARC Intercompany Loan, respectively. The
Intercreditor Agreements will provide that nothing contained therein will
impair or affect the right of the holders of any
99
106
Senior TransTexas Notes, Senior TARC Discount Notes or Senior TARC Mortgage
Notes, respectively, to institute suit for the enforcement of any payment
thereon as and when due.
(b) Upon receipt of a Subordination Request, the Trustee (and any
lender, trustee or collateral agent under or with respect to any of the
Security Documents), at the Company's expense, will execute and deliver, within
five Business Days from the receipt of such Subordination Request, any
instruments deemed by the Company (or with respect to the Security Documents,
the grantor of the security interest thereunder) to be reasonably necessary or
reasonably appropriate to subordinate the Security Interests to Permitted Liens
securing any First Lien Debt, if the provisions of this Section 12.2(b) have
been complied with. Any such Subordination Request shall request the Trustee
(and any such lender, trustee or collateral agent under or with respect to any
of the Security Documents) to execute one or more specifically described
instruments of subordination (which instruments of subordination accompany such
Subordination Request) and shall certify (i) that no Event of Default has
occurred and is continuing, and (ii) that one of the conditions of this Section
12.2(b) set forth below has been, or simultaneously with or immediately
following the subordination will be, fulfilled:
(i) the Company (or with respect to the Security Documents,
the grantor of the security interest thereunder) represents in the
Subordination Request that the Lien to which the Security Interests
are to be subordinated is a Permitted Lien securing only a Debt or
other obligation that constitutes First Lien Debt; or
(ii) Holders of not less than 66 2/3% of Value of the then
outstanding Notes have consented in writing to the subordination of
the Security Interests to such Lien.
Any subordination of the Security Interests in compliance with this Section
12.2(b) shall be deemed not to impair the Security Interests in contravention
of the provisions of this Indenture.
(c) The Trustee, at the Company's expense, will cooperate reasonably
with the Company (or with respect to the Security Documents, the grantor of the
security interest thereunder) in doing all such acts and things required by the
preceding provisions of this Section 12.2.
Section 3 Recording; Opinions of Counsel.
(a) The Company has executed, delivered, filed and recorded and
shall execute, deliver, file and record, all instruments and documents, and has
done and shall do all such acts and other things, at the expense of the
Company, as are reasonably necessary to subject the Collateral to the Security
Interests. As soon as practicable, the Company shall execute, deliver, file
and record all instruments and do all acts and other things as may be
reasonably necessary or advisable to perfect, maintain and protect the Security
Interests.
(b) The Company shall cause (x) TIA Section 314(b), relating to
Opinions of Counsel regarding the Lien of the Security Documents, and (y) TIA
Section 314(d), relating to the release of Collateral from the Lien of the
Security Documents and Officers' Certificates or other documents regarding fair
value of the Collateral, to be complied with to the extent applicable. Any
certificate or opinion required by TIA Section 314(d) may be made by an
Officer of the Company or any other obligor upon the Notes, as applicable, to
the extent permitted by TIA Section 314(d).
100
107
(c) The Company shall furnish to the Trustee, within 30 days after
the end of the Company's first fiscal year after the date hereof, within 30
days after the end of each fiscal year thereafter, and at least 30 days prior
to the expiration of any financing statements filed in connection with the
Security Interests, an Officers' Certificate, dated as of such date, (i)
stating that either (A) all action has been taken with respect to the
recording, registering, filing, rerecording and refiling of this Indenture, all
supplemental indentures, the Security Documents, financing statements,
continuation statements and all other instruments of further assurance as are
necessary and desirable fully to maintain, protect and preserve the Security
Interests and the rights of the Holders and the Trustee hereunder and under the
Security Documents and reciting the details of such action or referring to
prior Officers' Certificates in which such details are given or (B) no such
action is necessary to maintain, preserve and protect the Security Interests
and the rights of the Holders and the Trustee hereunder and under the Security
Documents during such period, (ii) stating either (A) that, with respect to the
trademarks and service marks, all filings with the United States Patent and
Trademark Office, any state office or other appropriate governmental body
necessary to maintain, protect and preserve the Security Interests in the
trademarks and service marks have been made or (B) that no such action is
necessary and (iii) stating what, if any, action of the forgoing character is
necessary during the fiscal year so as to maintain, protect and preserve the
rights of the Holders and the Trustee hereunder and under the Security
Documents.
Section 4 Disposition of Certain Collateral Without Requesting
Release.
(a) Notwithstanding the provisions of Sections 12.5, 12.6, 12.7, 12.8
and 12.14, the Company (or with respect to the Security Documents, the grantor
of the security interest thereunder) may, without requesting or receiving the
consent of the Trustee (and any lender, trustee or collateral agent under any
of the Security Documents):
(i) sell, assign, transfer, license or otherwise dispose of,
free from the Security Interests, any personal property constituting
Collateral that has become worn out, obsolete, or unserviceable, upon
replacing the same with machinery or equipment constituting Collateral
not necessarily of the same character but, at the time of such sale,
assignment, transfer, license or other disposition, being of at least
equal value and utility as the property so disposed of, which property
shall without further action become Collateral subject to the Security
Interests;
(ii) (A) sell, assign, transfer, license or otherwise dispose
of, free from the Security Interests, inventory in the ordinary course
of business and consistent with past practices, (B) collect, liquidate,
sell, factor or otherwise dispose of, free from the Security Interests,
notes receivable in the ordinary course of business and consistent with
past practices or (C) make cash payments (including repayments of Debt
permitted to be Incurred hereby) that are not otherwise prohibited
by this Indenture;
(iii) sell, assign, lease, license, transfer, abandon or
otherwise dispose of (a) damaged, worn out or other obsolete property
in the ordinary course of business or (b) other property no longer
necessary for the proper conduct of its business; and
(iv) dispose of Collateral pursuant to clause (i), (ii), (iii),
(iv), (vii), (viii) or (xii) of Section 4.14(b).
101
108
(b) Notwithstanding the provisions of subsection (a) above: (x) the
Company (or with respect to the Security Documents, the grantor of the security
interest thereunder) shall not dispose of or transfer (by lease, assignment,
sale or otherwise) Collateral pursuant to the provisions of Section 12.4(a)(ii)
or (iii), having, in the good faith judgment of the Company (or with respect to
the Security Documents, the grantor of the security interest thereunder) and,
if required by the TIA, an Appraiser, a fair value of 5% or more of the
aggregate fair value of all Collateral then existing in any transaction or any
series of related transactions without complying with Section 12.5; and (y) the
right of the Company (or with respect to the Security Documents, the grantor of
the security interest thereunder) to rely upon the provisions of Section
12.4(a)(ii) and (iii) from the date of this Indenture to December 31, 1997 and
for each twelve-month period thereafter beginning on January 1 (a "Twelve-Month
Period") shall be conditioned upon the Company (or with respect to the Security
Documents, the grantor of the security interest thereunder) delivering to the
Trustee, on or before January 30, 1998 and thereafter within 30 days following
the end of such Twelve-Month Period, an Officers' Certificate to the effect
that the proceeds of all of such dispositions, collections and cash payments
which involve Collateral during such Twelve-Month Period (other than those such
dispositions, collections or payments wherein the Company (or with respect to
the Security Documents, the grantor of the security interests thereunder) has
complied with Section 12.5) were used by the Company (or with respect to the
Security Documents, the grantor of the security interest thereunder) in
connection with their businesses.
(c) Any disposition of Collateral made in compliance with the
provisions of this Section 12.4 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
Section 5 Requesting Release of Collateral.
(a) Upon receipt of a Release Request, the Trustee shall execute and
deliver, within five Business Days from the receipt of such Release Request,
any instruments deemed by the Company (or with respect to the Security
Documents, the grantor of the security interests thereunder) to be reasonably
necessary or reasonably appropriate to release all or a part of the Collateral
from the Security Interests, if the provisions of this Section 12.5 have been
complied with. Any such Release Request shall request the Trustee to execute
one or more specifically described release instruments (which release
instruments shall accompany such Release Request) and shall certify (i) that no
Event of Default has occurred and is continuing (or with respect to a Release
Request relating to any of the Security Documents, that no event of default has
occurred and is continuing under the applicable Security Document) and (ii)
that one of the conditions of this Section 12.5(a) set forth below (specifying
such condition), and if such specified condition is described in clause (i),
(ii) or (iii) below, that the conditions of Section 12.4, 12.6 or 12.7, if
applicable, have been, or simultaneously with or immediately following the
release will be, fulfilled:
(i) the Collateral will be disposed of in compliance with
Section 12.4;
(ii) there is a substitution of Substitute Collateral in
accordance with Section 12.6;
(iii) there is a deposit of cash in a cash collateral account
in accordance with Section 12.7;
(iv) the Collateral to be released will be used within five
business days either to make redemptions or purchases of Notes which
will be delivered to the Trustee for cancellation;
102
109
(v) the Collateral is to be released in connection with an
Asset Sale made in compliance with Section 4.14;
(vi) all of the conditions precedent to the termination of
the Security Document under which the Lien in the Collateral to be
released was created, or to the release of such Collateral from the
Lien created by such Security Document, as set forth in such Security
Document, have been satisfied;
(vii) Holders of not less than 66 2/3% in Value of the then
outstanding Notes have consented in writing to such release of
Collateral from the Security Interests;
(viii) the Collateral is to be released in connection with the
TTXD Spin-off;
(ix) the Collateral is to be released in connection with the
repurchase by TransTexas of its common stock made pursuant to the
terms of clause (xii) of the definition of "Restricted Payments"
contained herein; or
(x) the Collateral to be released relates to the lien of the
TARC Mortgage on a portion of Parcel B-1 of TARC's refinery (which
parcel is more particularly described in Exhibit "A" to the TARC
Mortgage) for dedication to a governmental authority (such parcel
being referred to as the "Dedicated Parcel") for the purpose of
relocating Prospect Avenue from the western boundary line of such
Parcel B-1 to the eastern and northern boundary lines of such Parcel
B-1, provided that (i) the fee interest in and to the real property
currently dedicated for use as Prospect Avenue is conveyed to TARC
(such parcel being referred to as the "Reconveyed Parcel"), (ii) TARC
executes and delivers a supplemental mortgage evidencing that the lien
of the TARC Mortgage encumbers the Reconveyed Parcel, (iii) the
Company executes and delivers a supplemental collateral assignment
with respect to such supplemental mortgage and (iv) the Company
delivers to the Trustee a certificate of the Construction Supervisor
certifying that the loss of the use of the Dedicated Parcel does not
have a material adverse affect on the use, operation or maintenance of
TARC's refinery or the Capital Improvement Program.
(xi) the Collateral to be released constitutes First Lien
Debt and the Company (or with respect to releases under the Security
Documents, the grantor of the security interest thereunder) has
satisfied all the requirements for obtaining subordination of the
Security Interests therein pursuant to Section 12.2 and such
Collateral is (or will be, upon obtaining such release) encumbered by
a Lien permitted pursuant to the terms of clauses (d), (k), (s) or (t)
of the definition of Permitted TARC Lien or clauses (f), (l) or (o) of
the definition of Permitted TransTexas Lien.
(b) As a condition to any release of Collateral under this Section
12.5, the Company shall deliver to the Trustee any certificate or opinion
required by TIA Section 314(d), as to the fair value to the obligor of any
Substitute Collateral and as to the fair value of any Collateral to be
released, or by TIA Section 314(c), as to the fulfillment of any condition
precedent to such release, dated as of a date not more than 60 days prior to
the date of substitution or release. Such certificate or opinion shall state
that the proposed release of Collateral will not impair the Security Interests
in contravention of the provisions of this Indenture. The person
103
110
delivering such certificate or opinion must be independent with respect to the
Company if required by TIA Section 314(d).
(c) In addition to any certificates or opinions required by Section
12.5(b), as a condition to any release of Collateral pursuant to Section 12.6
or 12.7, the Company (or with respect to releases under the Security Documents,
the grantor of the security interest thereunder) shall deliver to the Trustee
an Opinion of Counsel to the effect that, in the opinion of such counsel,
subject to necessary qualifications, exceptions or limitations, the Trustee is
authorized to execute and deliver the instruments requested and such execution
and delivery will not result in a violation of the terms hereof or any
violation of applicable law and that either (a) all such instruments and
documents have been duly and validly executed and delivered and have been
properly recorded and filed so as to make effective the Security Interest
intended to be created by this Indenture and the Security Documents in the
Substitute Collateral or Cash Collateral to be substituted for the Collateral
to be released, and reciting the details of such action or referring to prior
Opinions of Counsel in which such details are given, or (b) no such action is
necessary to make the Security Interest in such Substitute Collateral or Cash
Collateral effective.
(d) At the request of the Company (or with respect to releases under
the Security Documents, the grantor of the security interest thereunder), the
Trustee shall, in lieu of releasing any Collateral pursuant to this Section
12.5, execute and deliver a Subordination Agreement with respect to such
Collateral.
(e) Any release or subordination of Collateral made in compliance
with the provisions of this Section 12.5 shall be deemed not to impair the
Security Interests in contravention of the provisions of this Indenture.
Section 6 Substitute Collateral Other Than Cash Collateral.
Subject to the provisions of Section 4.18:
(a) The Company (or with respect to releases under the Security
Documents, the grantor of the security interest thereunder) may, at its option,
obtain a release of Collateral by subjecting other proposed Collateral to the
respective Security Interests in place of and in exchange for such Collateral
to be released, all in accordance with the provisions and conditions of Section
12.5 and this Section 12.6. The Trustee shall not be bound to ascertain or
inquire as to the Company's (or with respect to substitutions of Collateral
under the Security Documents, the applicable grantor's) title in and to any
such Substitute Collateral or as to the existence of any Liens or encumbrances
on any such Substitute Collateral.
(b) The Company (or with respect to substitutions of Collateral under
the Security Documents, the grantor of the security interest) may substitute
Collateral pursuant to this Section 12.6, if all of the following conditions
are met:
(1) the Company (or with respect to substitutions of
Collateral under the Security Documents, the grantor of the security interest)
complies with Section 12.5(a) and the Company (or with respect to substitutions
of Collateral under the Security Documents, the grantor of the security
interest) delivers a Release Request to the Trustee stating, in addition to the
other requirements of Section 12.5, that the Company (or with respect to
substitutions of Collateral under the Security Documents, the grantor of the
security interest), as the case may be, intends to substitute the property
specifically described therein for the Collateral specifically described
therein;
104
111
(2) the fair value of the proposed Substitute Collateral is
at least equal to the fair value of the Collateral to be released and, if and
only if the fair value of Collateral to be released, and the fair value of all
other Collateral released without an Appraisal pursuant to this Section 12.6
during the then current calendar year exceeds 10% of the aggregate principal
amount of the Notes, the Company shall deliver to the Trustee an Appraisal
stating that the Appraised Value of the real property Collateral to be released
or the dollar amount of the cash collateral to be released is less than or
equal to the Appraised Value of such proposed Substitute Collateral; and
(3) the Security Interests in the Substitute Collateral are
effective pursuant to the Security Documents and Section 12.3.
(c) Any release of Collateral made in compliance with the provisions
of this Section 12.6 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 7 Substitution of Cash Collateral.
(a) The Company may, at its option, and in accordance with the
provisions and conditions of Section 12.5 and this Section 12.7, obtain the
release for sale by the Company of all or a portion of the shares of capital
stock from the TransAmerican Energy Corporation Security and Pledge Agreement
(the "Pledged Stock") if (i) the Net Cash Proceeds of such sale are immediately
deposited in a segregated cash collateral account in which the Trustee has a
perfected first priority security interest, and (ii) funds in such account are
released only to permit the Company to fund an Excess Cash Offer.
Notwithstanding the foregoing, no shares of Pledged Stock may be
released from the pledge pursuant to this Section 12.7 if at the time of such
proposed release, a Default or Event of Default has occurred and is continuing
or would occur as a result of such release.
The Company shall give written notice to the holders of Notes within
10 days of any release of Pledged Stock pursuant to this Section 12.7. Such
notice shall set forth the date of such release, the number of shares released,
and the provision of this Indenture pursuant to which such shares were
released.
(b) The Company shall deliver a Release Request to the Trustee,
stating, in addition to the other requirements of Section 12.5(a), that the
Company intends to substitute cash collateral for all or a portion of the
Pledged Stock specifically described therein.
(c) Any release of Collateral made in compliance with the provisions
of this Section 12.7 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 8 Release Upon Defeasance or Satisfaction and Discharge of
this Indenture.
(a) In the event that the Company delivers an Officers' Certificate
certifying that all of the provisions of either Section 8.1 or 8.2 have been
satisfied, the Trustee shall disclaim and give up any and all rights it has in
or to the Collateral, and any rights it has under the Security Documents
(subject to Section 8.7).
(b) Any release of Collateral made in compliance with the provisions
of this Section 12.8 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
105
112
Section 9 Reliance on Opinion of Counsel. The Trustee shall,
before taking any action under this Article XII, be entitled to receive an
Opinion of Counsel at the expense of the Company, stating the legal effect of
such action, and that such action will not be in contravention of the
provisions hereof, and such opinion shall be full protection to the Trustee for
any action taken or omitted to be taken in reliance thereon; provided that the
Trustee's action under this Article XII shall at all times be and remain
subject to its duties and protections under Article VII.
Section 10 Purchaser May Rely. A purchaser in good faith of the
Collateral or any part thereof or interest therein which is purported to be
transferred, granted or released by the Trustee as provided in this Article XII
(i) shall not be obligated to ascertain the validity of the transfer, grant or
release, and may rely on the authority of the Trustee to execute the document
evidencing such transfer, grant or release, (ii) shall not be obligated to
inquire as to the satisfaction of any conditions precedent to the exercise of
such authority, and (iii) shall not be obligated to determine whether the
application of the purchase price therefor complies with the terms hereof.
Section 11 Payment of Expenses. Without limiting Section 7.7, on
demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article XII. In the event that the Company (or with respect to any Security
Documents, the grantor of the security interest thereunder) makes a Release
Request more often than once a month, the Trustee and the Company shall
negotiate an additional reasonable fee for each such request. All such sums
referred to in this Section 12.11 shall be a Lien upon the Collateral and shall
be secured thereby.
Section 12 Trustee's Duties. The powers and duties conferred upon
the Trustee by this Article XII are solely to protect the Security Interests
and shall not impose any duty upon the Trustee to exercise any such powers
except as expressly provided in this Indenture. The Trustee shall be under no
duty to the Company (or with respect to any Security Documents, the grantor of
the security interest thereunder) whatsoever to make or give any presentment,
demand for performance, notice of non-performance, protest, notice of protest,
notice of dishonor, or other notice or demand in connection with any
Collateral, or to take any steps necessary to preserve any rights against prior
parties except as expressly provided in this Indenture. The Trustee shall not
be liable to the Company (or with respect to any Security Documents, the
grantor of the security interest thereunder) for failure to collect or realize
upon any or all of the Collateral, or for any delay in so doing, nor shall the
Trustee be under any duty to the Company (or with respect to any Security
Documents, the grantor of the security interest thereunder) to take any action
whatsoever with regard thereto. The Trustee shall have no duty to the Company
(or with respect to any Security Documents, the grantor of the security
interest thereunder) to comply with any recording, filing, or other legal
requirements necessary to establish or maintain the validity, priority or
enforceability of the Security Interests in, or the Trustee's rights in or to,
any of the Collateral.
Section 13 Authorization of Actions to be Taken by the Trustee
Under the Security Documents. The Trustee may, in its sole discretion and
without the consent of the Holders, but subject to Article VII and the terms of
the Intercreditor Agreements, take all actions it deems necessary or
appropriate in order to (a) enforce or effect the Security Documents and (b)
collect and receive any and all amounts payable in respect of the obligations
of the Company hereunder of TARC under the TARC Intercompany Loan and of
TransTexas under the TransTexas Intercompany Loan in accordance with and to the
extent provided in the Security Documents. Such actions shall include, but not
be limited to, enforcing or effecting any term or provision of the Security
Documents or advising, instructing or otherwise directing the collateral agent
under the Intercreditor Agreements with respect to the enforcement of any term
or provision of the Security Documents. Subject to the provisions of the
Security Documents (and the Intercreditor Agreements), the
106
113
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts which may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security hereunder or be prejudicial to the
interests of the Holders or of the Trustee). In addition, the Trustee may act
upon any Subordination Request or Release Request by the Company (or with
respect to any Security Documents, the grantor of the security interest
thereunder) on behalf of the Company.
ARTICLE XIII
MISCELLANEOUS
Section 1 TIA Controls. If any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by operation of the TIA, the
imposed duties, upon qualification of this Indenture under the TIA, shall
control.
Section 2 Notices. Any notices or other communications to the
Company or the Trustee required or permitted hereunder shall be in writing, and
shall be sufficiently given if made by hand delivery, by telex, by telecopier
or registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company:
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East, Suite 200
Houston, Texas 77032
Attention: Edwin B. Donahue
if to the Trustee:
Firstar Bank of Minnesota, N.A.
Corporate Trust Department
101 East Fifth Street, 12th Floor
St. Paul, Minnesota 55101-1860
Attention: Frank Leslie
The Company or the Trustee by notice to each other party may designate
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to the Company or the Trustee 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
telecopied; and five Business Days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
107
114
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication is mailed in the manner provided
above, it is duly given, regardless of whether the addressee receives it.
Section 3 Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
Section 4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel, all
such conditions precedent have been complied with; provided, however, that no
opinion of counsel shall be required in connection with an Excess Cash Offer
made pursuant to Section 4.21.
Section 5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to regardless of whether such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 6 Rules by Trustee, Paying Agent, Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Noteholders. The
Paying Agent or Registrar may make reasonable rules for its functions.
108
115
Section 7 Legal Holidays. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.
Section 8 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. INSOFAR AS THIS INDENTURE
RELATES TO THE TARC MORTGAGE OR THE TRANSTEXAS MORTGAGE OR THE CREATION,
PERFECTION OR FORECLOSURE OF LIENS AND THE ENFORCEMENT OF RIGHTS AND REMEDIES
AGAINST THE COLLATERAL UNDER THE SECURITY DOCUMENTS, THE TARC SECURITY
DOCUMENTS OR THE TRANSTEXAS SECURITY DOCUMENTS, IT SHALL BE GOVERNED BY THE
LAWS OF THE JURISDICTION SPECIFIED IN SUCH DOCUMENTS. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK 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 INDENTURE AND THE NOTES
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY 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. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY NOTEHOLDER TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
Section 9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 10 No Recourse against Others. A director, officer,
employee, stockholder or incorporator, as such, of the Company or any of its
Subsidiaries shall not have any liability for any obligations of the Company or
such Subsidiary under the Notes or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creations. Each
Noteholder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
Section 11 Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
109
116
Section 12 Duplicate Originals. All parties may sign any number of
copies or counterparts of this Indenture. Each signed copy or counterpart
shall be an original, but all of them together shall represent the same
agreement.
Section 13 Severability. In case any one or more of the provisions
in this Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
Section 14 Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and the Sections
of this Indenture have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of
the terms or provisions hereof.
110
117
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
TRANSAMERICAN ENERGY CORPORATION
By:
------------------------------
Name:
Title:
[Seal]
Attest:
--------------------------------
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
------------------------------
Name:
Title:
118
EXHIBITS
Exhibit A - Form of Senior Secured Note
Exhibit B - Form of Senior Secured Discount Note
Exhibit C - Certificate of Transferor-Senior Secured Note
Exhibit D - Certificate of Transferor-Senior Secured Discount Note
Exhibit E - Form of TEC Security and Pledge Agreement
Exhibit F - Form of TEC Collateral Assignment Agreement
Exhibit G - Form of TARC Mortgage
Exhibit H - Form of TARC Security and Pledge Agreement
Exhibit I - Form of TARC Intercompany Loan
Exhibit J - Form of TransTexas Mortgage
Exhibit K - Form of TransTexas Security and Pledge Agreement
Exhibit L - Form of TransTexas Intercompany Loan
Exhibit M - Form of TARC Intercreditor Agreement
Exhibit N - Form of TransTexas Intercreditor Agreement
Exhibit O - Form of TransTexas Disbursement Agreement
Exhibit P - Form of TARC/TEC Disbursement Agreement
119
EXHIBIT A
(FACE OF SENIOR SECURED NOTE)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE.
- ------------------------
(1) This paragraph should be included only if the Note is issued in global
form.
A-1
120
[FORM OF SENIOR SECURED NOTE]
TRANSAMERICAN ENERGY CORPORATION
11 1/2% SENIOR SECURED NOTE DUE 2002
No.
$
CUSIP 8935
1L AA 9
TransAmerican Energy Corporation, a Delaware corporation
(hereinafter called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ______________________, or registered assigns, the
principal sum of ________________ Dollars, on June 15, 2002.
Interest Payment Dates: June 15 and December 15,
commencing December 15, 1997
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note on
the reverse side, which will, for all purposes, have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
Dated:
TRANSAMERICAN ENERGY CORPORATION
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
Firstar Bank of Minnesota, N.A., as Trustee
A-2
121
By:
----------------------------------
Authorized Signature
A-3
122
(BACK OF SENIOR SECURED NOTE)
TRANSAMERICAN ENERGY CORPORATION
11 1/2% SENIOR SECURED NOTE DUE 2002
1. Interest.
TransAmerican Energy Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at a
rate of 11 1/2% per annum. To the extent it is lawful, the Company promises to
pay interest on any interest payment due but unpaid on such principal amount at
a rate of 13% per annum compounded semi- annually.
The Company will pay interest semi-annually on June 15 and December
15 of each year (each, an "Interest Payment Date"), commencing December 15,
1997. Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance of the Notes. Interest on the Notes will be computed on the basis of
a 360-day year consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
Except as provided below, the Company shall pay principal and interest in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by wire transfer
of Federal funds, or interest by its check payable in such U.S. Legal Tender.
The Company shall deliver any such interest payment to the Paying Agent who
shall remit such payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, Firstar Bank of Minnesota, N.A. (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or an
Affiliate of it may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. Indenture.
The Company issued the Notes under an Indenture, dated as of June 13,
1997 (the "Indenture"), among the Company and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and said Act for a statement
of them. The Notes are senior secured obligations of the Company limited in
aggregate principal amount to $475,000,000.
A-4
123
5. Optional Redemption.
The Company may redeem at its election, with the net proceeds of any
Public Equity Offering, at any time on or after the Issue Date and before June
15, 2000, up to 35% of the aggregate principal amount of the Notes in cash at a
Redemption Price equal to 111 1/2% of the principal amount of the Notes so
redeemed, including accrued and unpaid interest to the Redemption Date. The
Notes may be redeemed in whole or from time to time in part at any time on and
after June 15, 2000, at the option of the Company, at the Redemption Price
(expressed as a percentage of principal amount) set forth below with respect to
the indicated Redemption Date, in each case, together with any accrued but
unpaid interest to the Redemption Date.
If redeemed during
the 12-month period
beginning June 15 Redemption Price
------------------- ----------------
2000 . . . . . . . . . 105.750%
2001 and thereafter. . 100.000%
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 15
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall
have been deposited with the Paying Agent on such Redemption Date the Notes
called for redemption will cease to bear interest and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price and
any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of, or exchange Notes in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer of or exchange
any Notes selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it for
all purposes.
A-5
124
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. Thereafter, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits into an irrevocable trust with
the Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay
the principal of and interest on the Notes to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including the financial covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate combined Value of the Notes and the Company's Senior
Secured Discount Notes then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate combined Value of the Notes and the
Company's Senior Secured Discount Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency (provided such amendment or supplement does not adversely affect
the rights of any Holder of a Note).
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, Incur additional Debt or
issue Disqualified Capital Stock, make payments in respect of its Capital
Stock, enter into transactions with Related Persons, incur Liens, sell assets,
change the nature of its business, merge or consolidate with any other Person
and sell, lease, transfer or otherwise dispose of substantially all of its
properties or assets. The limitations are subject to a number of important
qualifications and exceptions. The Company must deliver a quarterly report to
the Trustee on compliance with such limitations.
13. Change of Control.
In the event there shall occur any Change of Control, each Holder of
Notes shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Company
to purchase on the Change of Control Payment Date in the manner specified in
the Indenture, all or any part (in integral multiples of $1,000) of such
Holder's Notes at a Change of Control Purchase Price equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any, on
and including the Change of Control Payment Date.
14. Successors.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
A-6
125
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate combined Value of the Notes and the
Company's Senior Secured Discount Notes then outstanding may declare all the
Notes to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or
the Notes except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of a majority in aggregate combined
Value of the Notes and the Company's Senior Secured Discount Notes then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal, premium, if any, or
interest, including a Default at any Maturity Date), if it determines that
withholding notice is in their interest.
16. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any of its Subsidiaries or any
successor corporation shall have any liability for any obligation of the
Company or such Subsidiary under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
17. Authentication.
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
18. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Indenture.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by his acceptance thereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, dated as of
June 13, 1997, among the Company and the Trustee (the "Registration Rights
Agreement"), including but not limited to the obligations of the Holders with
respect
A-7
126
to a registration and the indemnification of the Company and the Purchasers (as
defined therein) to the extent provided therein.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to: TransAmerican Energy Corporation, 1300
North Sam Houston Parkway East, Suite 200, Houston, Texas 77032.
A-8
127
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Signature
-------------------- --------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee*
- -----------------------------------
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program
(STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-9
128
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.21, Section 4.24 or Article XI of the Indenture,
check the appropriate box:
[ ] Section 4.21, [ ] Section 4.24, [ ] Article XI
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.21, Section 4.24, or Article XI of the
Indenture, as the case may be, state the principal amount (in integral
multiples of $1,000) you want to be purchased: $_____________
Date: Signature
-------------------- -------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Your Social Security or Tax Identification Number:
------------------------
Signature Guarantee:*
- ------------------------------------
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program
(STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-10
129
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES (2)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
Amount of decrease Amount of increase Principal Amount Signature of
in Principal Amount in Principal Amount of this Global Note authorized signatory
Date of Exchange of this Global Note of this Global Note decrease (or increase) of Trustee
- -----------------------------------------------------------------------------------------------------------
- ------------------------
(2) This should be included only if the Note is issued in global form.
A-11
130
EXHIBIT B
(FACE OF SENIOR SECURED DISCOUNT NOTE)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](3)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE.
THIS NOTE WAS ISSUED WITH "ORIGINAL ISSUE DISCOUNT." THE TOTAL AMOUNT OF
ORIGINAL ISSUE DISCOUNT PER $1,000.00 OF STATED PRINCIPAL AMOUNT IS 61.3221%,
THE ISSUE DATE IS JUNE 13, 1997, THE ISSUE PRICE PER $1,000.00 OF STATED
PRINCIPAL AMOUNT IS 77.6779% AND THE YIELD TO MATURITY ON THE ISSUE DATE IS
13%, COMPOUNDED SEMIANNUALLY.
- ------------------------
(3) This paragraph should be included only if the Note is issued in global
form.
B-1
131
[FORM OF SENIOR SECURED DISCOUNT NOTE]
TRANSAMERICAN ENERGY CORPORATION
13% SENIOR SECURED DISCOUNT NOTE DUE 2002
No.
$
CUSIP 89351L AB 7
TransAmerican Energy Corporation, a Delaware corporation
(hereinafter called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ______________________, or registered assigns, the
principal sum of ________________ Dollars, on June 15, 2002.
Interest Payment Dates: June 15 and December 15,
commencing December 15, 1999
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note on
the reverse side, which will, for all purposes, have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
Dated:
TRANSAMERICAN ENERGY CORPORATION
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
B-2
132
This is one of the Notes referred to
in the within-mentioned Indenture:
Firstar Bank of Minnesota, N.A., as Trustee
By:
----------------------------------------
Authorized Signature
B-3
133
(BACK OF SENIOR SECURED DISCOUNT NOTE)
TRANSAMERICAN ENERGY CORPORATION
13% Senior Secured Discount Note due 2002
1. Interest.
TransAmerican Energy Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at a
rate of 13% per annum. To the extent it is lawful, the Company promises to pay
interest on any interest payment due but unpaid on such principal amount at a
rate of 14 1/2% per annum compounded semi-annually.
The Company will pay interest semi-annually on June 15 and December
15 of each year (each, an "Interest Payment Date"), commencing December 15,
1999. Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from June 15, 1999.
Interest on the Notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
The Notes will have the Accreted Value set forth below as of the dates
indicated:
Accreted Value
(per $1,000
principal
Semi-Annual Accretion Date amount)
- -------------------------- --------------
December 15, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 827.849
June 15, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881.659
December 15, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 938.967
June 15, 1999 and thereafter. . . . . . . . . . . . . . . . . . . . . 1,000.000
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
Except as provided below, the Company shall pay principal and interest in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and interest by wire transfer
of Federal funds, or interest by its check payable in such U.S. Legal Tender.
The Company shall deliver any such interest payment to the Paying Agent who
shall remit such payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, Firstar Bank of Minnesota, N.A. (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or an
Affiliate of it may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
B-4
134
4. Indenture.
The Company issued the Notes under an Indenture, dated as of June 13,
1997 (the "Indenture"), among the Company and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and said Act for a statement
of them. The Notes are senior secured obligations of the Company limited in
aggregate principal amount to $1,130,000,000.
5. Optional Redemption.
The Company may redeem at its election, with the net proceeds of any
Public Equity Offering, at any time on or after the Issue Date and before June
15, 2000, up to 35% of the Value of the Notes in cash at a Redemption Price
equal to 111 1/2% of the Accreted Value of the Notes so redeemed, including
accrued and unpaid interest to the Redemption Date. The Notes may be redeemed
in whole or from time to time in part at any time on and after June 15, 2000,
at the option of the Company, at the Redemption Price (expressed as a
percentage of principal amount) set forth below with respect to the indicated
Redemption Date, in each case, together with any accrued but unpaid interest to
the Redemption Date.
If redeemed during
the 12-month period
beginning June 15 Redemption Price
------------------- ----------------
2000 . . . . . . . . . 105.750%
2001 and thereafter. . 100.000%
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 15
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall
have been deposited with the Paying Agent on such Redemption Date the Notes
called for redemption will cease to bear interest and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price and
any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of, or exchange Notes in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements
B-5
135
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Notes selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. Thereafter, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits into an irrevocable trust with
the Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay
the principal of and interest on the Notes to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including the financial covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate combined Value of the Notes and the Company's Senior
Secured Notes then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of
a majority in aggregate combined Value of the Notes and the Company's Senior
Secured Notes then outstanding. Without notice to or consent of any Holder,
the parties thereto may amend or supplement the Indenture or the Notes to,
among other things, cure any ambiguity, defect or inconsistency (provided such
amendment or supplement does not adversely affect the rights of any Holder of a
Note).
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, Incur additional Debt or
issue Disqualified Capital Stock, make payments in respect of its Capital
Stock, enter into transactions with Related Persons, incur Liens, sell assets,
change the nature of its business, merge or consolidate with any other Person
and sell, lease, transfer or otherwise dispose of substantially all of its
properties or assets. The limitations are subject to a number of important
qualifications and exceptions. The Company must deliver a quarterly report to
the Trustee on compliance with such limitations.
13. Change of Control.
In the event there shall occur any Change of Control, each Holder of
Notes shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Company
to purchase on the Change of Control Payment Date in the manner specified in
the Indenture, all or any part (in integral multiples of $1,000) of such
Holder's Notes at a Change of Control Purchase
B-6
136
Price equal to 101% of the Accreted Value thereof, together with accrued and
unpaid interest, if any, on and including the Change of Control Payment Date.
14. Successors.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate combined Value of Notes and Senior Secured
Notes then outstanding may declare all the Notes to be due and payable
immediately in the manner and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may require indemnity satisfactory to it before
it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of a majority in aggregate combined Value of the Notes and Senior
Secured Notes then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of Notes notice of any
continuing Default or Event of Default (except a Default in payment of
principal, premium, if any, or interest, including a Default at any Maturity
Date), if it determines that withholding notice is in their interest.
16. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any of its Subsidiaries or any
successor corporation shall have any liability for any obligation of the
Company or such Subsidiary under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
17. Authentication.
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
18. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Indenture.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Notes as a convenience to the
B-7
137
Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the other
identification numbers printed hereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by his acceptance thereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, dated as of
June 13, 1997, among the Company and the Trustee (the "Registration Rights
Agreement"), including but not limited to the obligations of the Holders with
respect to a registration and the indemnification of the Company and the
Purchasers (as defined therein) to the extent provided therein.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to: TransAmerican Energy Corporation, 1300
North Sam Houston Parkway East, Suite 200, Houston, Texas 77032.
B-8
138
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Signature
-------------------- --------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee*
- ---------------------------
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program
(STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
B-9
139
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.21, Section 4.24 or Article XI of the Indenture,
check the appropriate box:
[ ] Section 4.21, [ ] Section 4.24, [ ] Article XI
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.21, Section 4.24, or Article XI of the
Indenture, as the case may be, state the principal amount (in integral
multiples of $1,000) you want to be purchased: $_____________
Date: Signature
-------------------- -------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Your Social Security or Tax Identification Number:
------------------------
Signature Guarantee:*
- --------------------------
* NOTICE: The signature must be guaranteed by an institution which is a
member of one of the following recognized signature guarantee
programs:
(1) The Securities Transfer Agent Medallian Program
(STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
B-10
140
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES (4)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
Amount of decrease Amount of increase Principal Amount Signature of
in Principal Amount in Principal Amount of this Global Note authorized signatory
Date of Exchange of this Global Note of this Global Note decrease (or increase) of Trustee
- -----------------------------------------------------------------------------------------------------------
- ---------------------------
(4) This should be included only if the Note is issued in global form.
B-11
141
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SENIOR SECURED NOTES
Re: [Series A] [Series B] 11 1/2% Senior Secured Notes due 2002 (the
"Notes") of TransAmerican Energy Corporation
This Certificate relates to $_______________ principal amount of
Notes held in * [ ] book-entry or * [ ] definitive form by
________________________________________ (the "Transferor").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global
Note held by the depository, a Note or Notes in definitive,
registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
[ ] to exchange or register the transfer of a Note or Notes. In
connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above captioned Notes and, the transfer
of this Note does not require registration under the Securities Act
of 1933, as amended (the "Securities Act") because such Note:
[ ] is being acquired for the Transferor's own account, without
transfer;
[ ] is being transferred pursuant to an effective registration
statement;
[ ] is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), in reliance on such
Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities
Act;** or
[ ] is being transferred pursuant to another exemption from the
registration requirements of the Securities Act (explain:
__________________________________).**
---------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------------
Date:
-------------------------------------
- ----------------------------------
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in
compliance with the Securities Act.
C-1
142
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SENIOR SECURED DISCOUNT NOTES
Re: [Series A] [Series B] 13% Senior Secured Discount Notes due 2002
(the "Notes") of TransAmerican Energy Corporation
This Certificate relates to $_______________ principal amount of
Notes held in * [ ] book-entry or * [ ] definitive form by
________________________________________ (the "Transferor").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global
Note held by the depository, a Note or Notes in definitive,
registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
[ ] to exchange or register the transfer of a Note or Notes. In
connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above captioned Notes and, the transfer
of this Note does not require registration under the Securities Act
of 1933, as amended (the "Securities Act") because such Note:
[ ] is being acquired for the Transferor's own account, without
transfer;
[ ] is being transferred pursuant to an effective registration
statement;
[ ] is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), in reliance on such
Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities
Act;** or
[ ] is being transferred pursuant to another exemption from the
registration requirements of the Securities Act (explain:
__________________________________).**
---------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------------
Date:
--------------------
- ----------------------------------
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in
compliance with the Securities Act.
D-1