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EXHIBIT 4.1
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TRANSAMERICAN REFINING CORPORATION,
Issuer
and
TRANSAMERICAN ENERGY CORPORATION,
Guarantor
and
FIRST UNION NATIONAL BANK, f/k/a FIRST FIDELITY BANK,
NATIONAL ASSOCIATION,
Trustee
_________________________
SECOND SUPPLEMENTAL INDENTURE
dated as of June 13, 1997
_________________________
$340,000,000 Guaranteed First Mortgage Discount Notes due 2002
and
$100,000,000 Guaranteed First Mortgage Notes due 2002
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of June 13, 1997 (the
"Supplemental Indenture"), is made and entered into by and among TRANSAMERICAN
REFINING CORPORATION, a Texas corporation (the "Company"), TRANSAMERICAN ENERGY
CORPORATION, a Delaware corporation ("TEC"), and FIRST UNION NATIONAL BANK,
formerly known as First Fidelity Bank, National Association, (the "Trustee"),
under an Indenture dated as of February 15, 1995, by and among the Company, TEC
and the Trustee (the "Original Indenture"), as supplemented by the First
Supplemental Indenture dated as of February 24, 1997 among the Company, TEC and
the Trustee (the Original Indenture, as so supplemented, is referred to herein
as the "Current Indenture"). All capitalized terms used in this Supplemental
Indenture that are defined in the Current Indenture, either directly or by
reference therein, have the meanings assigned to them therein, except to the
extent such terms are defined in this Supplemental Indenture or the context
clearly requires otherwise.
WHEREAS, Section 9.2 of the Current Indenture provides, among other
things, that with the consent of the Holders of not less than a majority in
aggregate principal amount of then outstanding Securities or, with respect to
certain matters, 66-2/3% of the aggregate principal amount of Notes then
outstanding, the Obligors, when authorized by Board Resolutions, and the
Trustee may amend or supplement the Current Indenture or the Securities or
enter into an indenture supplemental thereto for the purposes of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Current Indenture or the Securities or of modifying in any manner the
rights of the Holders under the Current Indenture or the Securities; and
WHEREAS, the Company has offered to purchase for cash, upon the terms
and subject to the conditions set forth in an Offer to Purchase and Consent
Solicitation dated May 15, 1997, as supplemented and amended by that certain
Supplement to Offer to Purchase and Consent Solicitation dated May 30, 1997 and
that certain Second Supplement to Offer to Purchase and Consent Solicitation
dated June 6, 1997 (collectively, the "Offer to Purchase and Consent
Solicitation"), and in a Letter of Transmittal and Consent (the "Letter of
Transmittal and Consent" and, together with the Offer to Purchase and Consent
Solicitation, the "Offer") all of its Guaranteed First Mortgage Notes due 2002
and Guaranteed First Mortgage Discount Notes (collectively, the "Securities");
and
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WHEREAS, the Offer to Purchase and Consent Solicitation and Letter of
Transmittal and Consent also constitute a solicitation of consents from the
Holders of the Securities to certain amendments to the Current Indenture to
eliminate or modify certain of the covenants and other provisions contained in
the Current Indenture, as more particularly described in this Supplemental
Indenture (the "Proposed Amendments"); and
WHEREAS, the Holders of at least 66-2/3% of the aggregate principal
amount of Securities have consented to the Proposed Amendments pursuant to the
Offer; and
WHEREAS, the Boards of Directors of the Obligors have adopted
resolutions authorizing and approving the Proposed Amendments and the Company
and the Trustee are executing and delivering this Supplemental Indenture in
order to provide for such amendments;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Supplemental
Indenture hereby agree as follows:
ARTICLE I
AMENDMENTS TO CURRENT INDENTURE
Section 1.01. New Definitions. The Current Indenture is hereby
amended, effective as of the Acceptance Date (as defined below), to add the
following definitions to Section 1.1 to read as follows:
"1997 Intercreditor Agreement" means an agreement between the Trustee
and the trustee under an indenture relating to indebtedness of TEC to
whom TEC collaterally assigns the New Note or any interest therein,
with such changes thereto, including without limitation changes to
reflect the circumstances of the transaction giving rise to the New
Note or such indebtedness of TEC, as do not have a material adverse
effect on the Notes.
"New Note" means a promissory note of the Company evidencing a loan
from TEC to the Company, the proceeds of which are used to finance the
purchase of the Notes pursuant to its Offer to Purchase and Consent
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Solicitation dated May 15, 1997, as amended or supplemented from time
to time, or for other purposes.
"Offer" means the offer to purchase the Notes made by the Company
pursuant to that certain Offer to Purchase and Consent Solicitation
dated May 15, 1997, as amended or supplemented from time to time, and
the accompanying Letter of Transmittal and Consent.
Section 1.02. Section 4.4 of the Current Indenture. Section 4.4 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.4 Construction.
[intentionally omitted]
Section 1.03. Section 4.5 of the Current Indenture. Section 4.5 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.5 Limitation on Restricted Payments.
[intentionally omitted]
Section 1.04. Section 4.7 of the Current Indenture. Section 4.7 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.7 Payment of Taxes and Other Claims.
Each Obligor shall, and shall cause each of its Subsidiaries
to, pay or discharge or cause to be paid or discharged, within 60 days
after the same shall become delinquent, (a) all taxes, assessments and
governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon such Obligor
or any of its Subsidiaries or any of their respective properties and
assets and (b) all lawful claims, whether for labor, materials,
supplies, services or anything else, which have become due and payable
and which by law have or may become a Lien upon the property and
assets of such Obligor or any of its Subsidiaries;
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provided, however, that an Obligor shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment,
charge or claim 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 1.05. Section 4.9 of the Current Indenture. Section 4.9 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
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SECTION 4.9. Compliance Certificate; Notice of Default.
The Company and each Guarantor shall deliver to the Trustee
within 60 days after the end of its fiscal quarter 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 or such Guarantor, as the case may be, has kept, observed,
performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate,
whether or not such Officer knows of any failure by the Company, any
Guarantor or any Subsidiary of the Company or a Guarantor to comply
with any conditions or covenants in this Indenture and, if such
Officer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate
shall also notify the Trustee should the relevant fiscal year end on
any date other than the current fiscal year end date and shall notify
the Trustee of any changes in the composition of the Board of
Directors of the Company, any Guarantor or any of their Subsidiaries
or of any amendment to the charter or bylaws of the Company, a
Guarantor or any of their Subsidiaries.
The Company and each Guarantor 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, any Guarantor or any Subsidiary of
the Company or a Guarantor was not in compliance with the provisions
set forth in Section 4.3, 4.16, 4.18 or 4.21 of this Indenture.
The Company and each Guarantor 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
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action the Company or such Guarantor 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 an Officers' Certificate specifying the Default or
Event of Default giving rise thereto from the Company or a Guarantor
or written notice specifying the occurrence of a Default or an Event
of Default from any of the Holders.
Section 1.06. Section 4.12 of the Current Indenture. Section 4.12 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.12. Limitation on Transactions with Related Persons.
[intentionally omitted]
Section 1.07. Section 4.13 of the Current Indenture. Section 4.13 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.13. Limitation on Incurrences of Additional Debt and
Issuances of Disqualified Capital Stock.
[intentionally omitted]
Section 1.08. Section 4.14 of the Current Indenture. Section 4.14 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.14. Limitations on Restricting Subsidiary Dividends.
[intentionally omitted]
Section 1.09. Section 4.15 of the Current Indenture. Section 4.15 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.15. Limitation on Liens.
[intentionally omitted]
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Section 1.10. Section 4.19 of the Current Indenture. Section 4.19 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.19. Restriction on Sale and Issuance of Subsidiary Stock.
[intentionally omitted]
Section 1.11. Section 4.20 of the Current Indenture. Section 4.20 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.20. Limitations on Line of Business.
[intentionally omitted]
Section 1.12. Section 4.26 of the Current Indenture. Paragraph (a)
of Section 4.26 of the Current Indenture is hereby amended, effective as of the
Acceptance Date, to read in its entirety as follows:
SECTION 4.26. Additional Equity Investments.
(a) TEC shall make an Equity Exchange Offer unless, after the
Issue Date and prior to December 31, 1997, (i) the Company has
received cash equity Investments aggregating at least $100,000,000 and
an equivalent amount has thereafter and prior to December 31, 1997
been expended by the Company on the expansion and modification of the
Company's refinery and the Company has delivered to the Trustee an
Officers' Certificate to that effect, or (ii) TEC has sold for cash at
least 10,000,000 shares of TransTexas common stock (subject to
adjustment upon the occurrence of certain events, including
subdivisions, combinations and certain reclassifications, affecting
TransTexas common stock) and, as soon as practicable thereafter, used
the Net Proceeds of such sale or sales to purchase 8% Preferred Stock
of the Company, and the Company has, immediately upon receipt thereof,
deposited such Net Proceeds in the Collateral Account.
Section 1.13. Section 4.27 of the Current Indenture. Section
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4.27 of the Current Indenture is hereby amended, effective as of the Acceptance
Date, to read in its entirety as follows:
SECTION 4.27. Revolving Credit Facility.
[intentionally omitted]
Section 1.14. Section 4.28 of the Current Indenture. Section 4.28 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.28. Registration of Pledged Shares.
[intentionally omitted]
Section 1.15. Section 4.29 of the Current Indenture. Section 4.29 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 4.29. Limitation on Sale/Leaseback Transactions.
[intentionally omitted]
Section 1.16. Section 5.1 of the Current Indenture. Section 5.1 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 5.1 When Company May Merge, Etc.
(a) Neither the Company nor any Guarantor shall, in a single
transaction or through a series of related transactions, 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 Affiliated Persons, unless:
(1) either (a) the Company or such Guarantor, 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 or the Guarantor, as the case may be,
is merged or to which all or substantially all of the
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properties and assets of the Company or the Guarantor, as the case may
be, are transferred as an entirety or substantially as an entirety
(the Company or the Guarantor, 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, in form satisfactory to the Trustee, all the obligations of
the Company or such Guarantor, as the case may be, under the
Securities, any Guarantee, the Security Documents and this Indenture;
and
(2) [intentionally omitted]
(3) [intentionally omitted]
(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, that such consolidation, merger,
assignment or transfer will not have any adverse effect on the
validity, legality or enforceability of the Notes and that all
conditions precedent herein provided relating to such transaction have
been satisfied.
(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 or a Guarantor, which properties and assets, if held by the
Company or a Guarantor instead of such Subsidiaries, would constitute
all or substantially all of the properties and assets of the Company
or such Guarantor, 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
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the Company or such Guarantor, as the case may be.
Section 1.17. Section 6.1 of the Current Indenture. Section 6.1 of
the Current Indenture is hereby amended, effective as of the Acceptance Date,
to read in its entirety as follows:
SECTION 6.1 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):
(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 Offer Price in accordance with
Section 4.16, the Deficiency Purchase Price in accordance with
Section 4.21 or the Excess Cash Offer Price in accordance with
Section 4.24;
(c) default in the observance or performance of, or
breach of, any covenant, agreement or warranty of the Company
or a Guarantor contained in the Security Documents, the Notes
or this Indenture (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 a period of 30 days after there has
been given, by registered or certified mail, to the Company
and the Guarantors by the Trustee, or to the Company,
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the Guarantors and the Trustee by Holders of at least 25% in
aggregate principal amount of the outstanding Notes, a written
notice specifying such default or breach, requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder;
(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, a Guarantor or any of
their Subsidiaries with an aggregate principal amount in
excess of $50,000,000, or failure to pay such Debt at its
stated maturity, it being understood that a waiver by 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, a Guarantor or any of their Significant Subsidiaries
as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company, a Guarantor or
any of their Significant 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, a Guarantor any of
their Significant 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, a Guarantor or any of their
Significant Subsidiaries shall institute proceedings to be
adjudicated a voluntary bankrupt,
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or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent
seeking reorganization 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, fails generally to pay
their debts as they become due, or takes any corporate action
in furtherance of or to facilitate, conditionally or
otherwise, any of the foregoing;
(g) [intentionally omitted]
(h) [intentionally omitted]
(i) [intentionally omitted]
(j) [intentionally omitted]
(k) [intentionally omitted]
(l) [intentionally omitted]
Any Defaults under Sections 4.21, 4.24, 4.26 or 5.1 of this
Indenture shall be Events of Default without the notice specified in
clause (c) above and upon the passage of 10 days.
Section 1.18. Section 12.6 of the Current Indenture. Paragraph (b)
of Section 12.6 of the Current Indenture is hereby amended, effective as of the
Acceptance Date, to read in its entirety as follows:
SECTION 12.6 Release of Collateral.
(b) Shares of TransTexas common stock may be
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released from the security interest created by the Pledge Agreements
as follows:
(1) Up to 15,000,000 shares of pledged TransTexas
common stock (subject to adjustment upon the occurrence of
certain events, including subdivision, combinations and
reclassifications, affecting TransTexas common stock) owned by
the Company may be released from the security interest created
by the Company Pledge Agreement if (A) such shares are sold
for cash and the Net Proceeds are immediately deposited in the
Collateral Account or (B) if the Company issues and sells
Preferred Stock that is exchangeable for TransTexas common
stock and the Net Proceeds of such sale are deposited
concurrently in the Collateral Account, provided such Net
Proceeds are at least equal to the Market Value, as of the
date of such release, of the shares of TransTexas common stock
that are released. Any such shares sold by the Company shall
be sold at prices no less favorable to the Company than those
that could be obtained in arm's-length transactions with
unrelated persons.
(2) Up to 10,000,000 shares of pledged TransTexas
common stock (subject to adjustment upon the occurrence of
certain events, including subdivisions, combinations and
reclassifications, affecting TransTexas common stock) owned by
TEC may be released from the security interest created by the
TEC Pledge Agreement if (A) such shares are sold after the
Phase I Completion Date and the Phase I Completion Date
occurred by the Required Phase I Completion Date, (B) the 15
million shares of TransTexas common stock referred to in
paragraph (b)(1) above have been sold in accordance with the
Indenture or reserved for issuance upon exchange of the
Preferred Stock referred to in paragraph (b)(1)(B) above, (C)
such shares are sold on or before December 31, 1997, (D) such
shares are sold for cash, (E) the Net Proceeds from such sale
are used to make a concurrent purchase of 8% Preferred Stock
of the Company, (F) the Company immediately
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deposits such Net Proceeds in the Collateral Account and (G)
the Net Proceeds from such sale, together with all other
amounts in the Collateral Account are sufficient to fund the
completion of Phase II. Any determination of sufficient funds
shall be evidenced by a resolution of the Board of Directors
of the Company, an Officers' Certificate and a certification
by the Construction Supervisor, each evidencing the parties'
respective determination of the sufficiency of funds, copies
of which shall be delivered to the Trustee prior to any
release of shares of TransTexas common stock. Any such shares
sold by TEC shall be sold at prices no less favorable to TEC
than those that could be obtained in arm's-length transactions
with unrelated persons.
(3) Pledged shares of TransTexas common stock owned
by TEC may be released from the security interest created by
the TEC Pledge Agreement if (A) TEC sells such shares at a
price of at least $12 per share, (B) the Net Proceeds of such
sale are immediately deposited in a segregated cash collateral
account established for such purpose and in which the Trustee
for the benefit of the Holders has a perfected first priority
security interest, (C) such account does not have a balance in
excess of $30 million for a period in excess of 30 consecutive
days, (D) funds in the account are released only to permit TEC
to purchase 8% Preferred Stock of the Company and (E)
simultaneously with TEC's purchase of such shares of 8%
Preferred Stock, the Company uses all such Net Proceeds to
fund a Note Redemption or a Note Repurchase. Until the Phase
II Completion Date has occurred, no shares of TransTexas
common stock may be released pursuant to this clause (3) if,
as a result of such release, less than 10 million shares of
TransTexas common stock (subject to adjustment upon the
occurrence of certain events, including subdivisions,
combinations and certain reclassifications, affecting
TransTexas common stock) would be pledged by TEC pursuant to
the TEC
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Pledge Agreement.
(4) Pledged shares of TransTexas common stock owned
by TEC may be released from the security interest created by
the TEC Pledge Agreement after a Public Equity Offering, if
(A) the outstanding Common Stock of the Company has a Public
Market Value of at least $750,000,000, (B) after such shares
are released, the Collateral Ratio is at least 3:1, and (C) at
any time thereafter that the Collateral Ratio is less than
3:1, within 5 Business Days, TEC pledges, as security for the
Notes and the Guarantee, additional shares of TransTexas
common stock sufficient to make the Collateral Ratio exceed
3:1.
(5) Pledged shares of TransTexas common stock owned
by TEC may be released from the security interest created by
the TEC Pledge Agreement if (A) TEC sells such shares and the
Net Proceeds of such sale are immediately deposited in a
segregated cash collateral account established for such
purpose and in which the Trustee for the benefit of the
Holders has a perfected first priority security interest, the
funds in the account are released only to permit TEC to
purchase 8% Preferred Stock of the Company and simultaneously
with TEC's purchase of such shares of 8% Preferred Stock, the
Company immediately uses all such Net Proceeds to fund a Note
Redemption or a Note Repurchase, or (B) the Company or TEC has
completed a Note Redemption or a Note Repurchase prior to such
release, and, in the case of both (A) and (B), (i) the number
of shares released does not exceed the product of (x) the
number of shares so pledged immediately prior to such release,
and (y) a fraction, the numerator of which is equal to the
Value of Notes subject to such Note Redemption or Note
Repurchase, and the denominator of which is equal to the Value
of Notes outstanding immediately prior to such Note Redemption
or Note Repurchase, (ii) the Market Value of the shares of
TransTexas common stock pledged to secure the Notes and the
Guarantee
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(excluding the shares to be released) is at least equal to the
outstanding principal amount of the Notes, plus all accrued
and unpaid interest thereon (after giving effect to such Note
Redemption or Note Repurchase) and (iii) the Phase II
Completion Date has occurred, except that if the Phase II
Completion Date has not occurred but the Phase I Completion
Date has, up to 10 million shares of TransTexas stock (subject
to adjustment) may be sold. Until the Phase II Completion
Date has occurred, no shares of TransTexas common stock may be
released pursuant to this clause (5) if, as a result of such
release, less than 10 million shares of TransTexas common
stock (subject to adjustment upon the occurrence of certain
events, including subdivisions, combinations and certain
reclassifications, affecting TransTexas common stock) would be
pledged by TEC pursuant to the TEC Pledge Agreement. The Net
Proceeds of any such sale of TransTexas common stock shall be
deposited in the Collateral Account and released from the
Collateral Account only in accordance with a Trustee's
Certificate given to the Disbursement Agent pursuant to
Section 6.1 of the Disbursement Agreement and shall be used by
the Trustee to make payments to Holders of Notes being
redeemed or purchased by the Company.
(6) Pledged shares of TransTexas common stock owned
by TEC may be released from the security interest created by
the TEC Pledge Agreement if (A) the Phase II Completion Date
has occurred, (B) the Company has received, subsequent to the
Issue Date, cash equity investments aggregating at least
$100,000,000 that have been deposited in the Collateral
Account prior to December 31, 1997 and, (C) after giving
effect to such release, at least 35,000,000 shares of
TransTexas common stock (subject to adjustment for stock
splits, stock dividends and other similar transactions) remain
subject to the pledge.
(7) All of the pledged shares of TransTexas
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common stock and pledged shares of capital stock of the
Company may be released from the security interest created by
the Pledge Agreements if the Notes have an Investment Grade
Rating and the rating agencies have indicated in writing that
the Notes will continue to have an Investment Grade Rating
after the release of the shares of TransTexas common stock and
the shares of the Company's capital stock.
(8) All of the pledged shares of TransTexas common
stock and pledged shares of capital stock of the Company shall
be released from the security interest created by the Pledge
Agreements upon the occurrence of a Change of Control (A) on
the day after the Change of Control Payment Date if a Change
of Control Offer has been consummated in accordance with the
Indenture or (B) at any time after a Change of Control has
occurred if the shares released from the security interest are
sold by TEC and (i) the Net Proceeds of such sale are,
together with other funds of the Company available therefor,
at least equal to the Change of Control Purchase Price
(including accrued and unpaid interest) of all outstanding
Notes, (ii) such Net Proceeds are immediately deposited in a
segregated cash collateral account established for such
purpose and in which the Trustee has a perfected first
priority security interest, (iii) funds in such account are
released only to permit TEC to purchase 8% Preferred Stock of
the Company, and (iv) simultaneously with TEC's purchase of
such shares of 8% Preferred Stock, the Company uses all of
such Net Proceeds to make payments to Holders of Notes in
connection with a Change of Control Offer.
(9) Up to all shares of pledged TransTexas common
stock owned by the Company may be released from the security
interest created by the Company Pledge Agreement at any time
upon the request of the Company; provided, that there shall
remain pledged to secure the Notes an aggregate number of
shares of TransTexas common stock at least equal to
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the number obtained by multiplying 50,450,000 by a fraction,
the numerator of which is the aggregate principal amount of
the Notes which remain outstanding immediately following
consummation of the Offer and the denominator of which is
$440,000,000.
(10) Up to all shares of pledged TransTexas common
stock owned by TEC may be released from the security interest
created by the TEC Pledge Agreement at any time upon the
request of TEC; provided, that there shall remain pledged to
secure the Notes an aggregate number of shares of TransTexas
common stock at least equal to the number obtained by
multiplying 50,450,000 by a fraction, the numerator of which
is the aggregate principal amount of the Notes which remain
outstanding immediately following consummation of the Offer
and the denominator of which is $440,000,000.
and Paragraph (h) of Section 12.6 of the Current Indenture is hereby amended,
effective as of the Acceptance Date, to read in its entirety as follows:
(h) Notwithstanding the foregoing, no Collateral may be
released from the security interest created by the Security Documents
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. Any shares of TransTexas common stock that is released
pursuant to this Section 12.6 (other than subsections (b)(9) or
(b)(10) hereof) in connection with a sale of such stock shall be sold
for cash at prices no less favorable to the seller than those that
could be obtained in arms-length transactions with unrelated persons.
Section 1.19. Section 12.7. There shall be added to the Current
Indenture a new Section 12.7, effective as of the Acceptance Date, to read in
its entirety as follows:
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SECTION 12.7 Trustee's Execution of Intercreditor Agreements.
Upon receipt of an Officers' Certificate requesting the
Trustee's execution and delivery of the 1997 Intercreditor Agreement,
the Trustee, at the Company's expense, will execute and deliver the
1997 Intercreditor Agreement and the Company, TEC and any other
Guarantors 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 1997 Intercreditor Agreement, (i) that (A)
the New Note will be subordinated in right of payment to the full and
final payment of the Notes, (B) the liens and security interests
securing the New Note encumbering collateral that secures both the
Notes and the New Note (the "Shared Collateral") will be subordinate
and inferior to the liens and security interests in the Shared
Collateral that secure the Notes, and (C) the rights of the holder of
the New Note to proceed against the Shared Collateral will be
restricted to the extent necessary to effect the intent of the 1997
Intercreditor Agreement, (ii) that the Company will be permitted to
pay, and the holder of the New Note will be permitted to receive,
regularly scheduled payments of interest and principal under the New
Note so long as at the time of such payment, or after giving effect
thereto, no Default or Event of Default shall have occurred and then
be continuing or would occur thereunder after giving effect to such
payment, (iii) that the holder of the New Note will be required to pay
or deliver to the Trustee cash or other assets received with respect
to the New Note, except payments permitted under the preceding clause
(ii), (iv) that (A) in the event of any case or proceeding involving
or seeking the liquidation or reorganization of the Company (each, a
"Proceeding"), any and all cash or other assets, including proceeds
received from realization on the Shared Collateral, paid or
distributed on account of the New Note, will be applied, after payment
of reasonable costs and expenses relating to obtaining such proceeds,
to the payment of the Notes, and only after the Notes have been paid
in full, to the payment of the New Note, and (B) in any other event,
any and all proceeds of the Shared Collateral received by or
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for the account of the Holder of the New Note and/or the holders of
the Notes for application to the New Note and/or the Notes will be
applied so as not to impair or affect the right of the holders of the
Notes to receive payments as and when due (but nothing contained in
the 1997 Intercreditor Agreement shall be construed to prohibit, limit
or otherwise affect the rights of the Company to transfer, dispose of
or otherwise deal with its properties and assets included within the
Shared Collateral, and the proceeds thereof, in any manner permitted
under the Indenture), (v) that the rights of the holder of the New
Note to vote or to take action in connection with any Proceeding so as
to contest (A) the validity of any obligation of the Company or TEC
under or with respect to the Indenture or any collateral therefor or
guaranties thereof, (B) the relative rights of holders of the Notes
with respect to any of such collateral or guaranties or (C) the
obligations and agreements of the holder of the New Note as set forth
in the Intercreditor Agreement will be appropriately limited and
restricted so as to effect the intent of the Intercreditor Agreement,
and (vi) that determinations regarding the exercise of remedies
against the Shared Collateral will be made by a majority of the
outstanding principal amount of the Notes and the New Note, except
that, and the Intercreditor Agreement will so provide, that nothing
contained in the Intercreditor Agreement will impair or affect the
right of the holder of any Note to institute suit for the enforcement
of any payment thereof as and when due.
ARTICLE II
GENERAL PROVISIONS
Section 2.01. Effectiveness of Amendments. The Supplemental
Indenture is effective as of the date first above written. The Current
Indenture will remain operative in the form in which it existed prior to the
date hereof until the date (the "Acceptance Date") on which the Company accepts
for purchase and payment all Securities that have been properly tendered and
not withdrawn pursuant to the Offer. On and after the Acceptance Date, the
Proposed Amendments will be effective.
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Section 2.02. Ratification of Indenture. The Current Indenture is
in all respects acknowledged, ratified and confirmed, and shall continue in
full force and effect in accordance with the terms thereof and as supplemented
by this Supplemental Indenture. The Current Indenture and this Supplemental
Indenture, shall be read, taken and construed as one and the same instrument.
Section 2.03. Certificate and Opinion as to Conditions Precedent.
Simultaneously with and as a condition to the execution of this Supplemental
Indenture, the Company is delivering to the Trustee
(a) an Officer's Certificate in the form attached hereto as
Exhibit A; and
(b) an Opinion of Counsel covering the matters described in
Exhibit B attached hereto.
Section 2.04. Effect of Headings. The Article and Section headings
in this Supplemental Indenture are for convenience only and shall not affect
the construction of this Supplemental Indenture.
Section 2.05. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 2.06. Counterparts. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
the same instrument.
[THE NEXT-FOLLOWING PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties to this Supplemental Indenture have
caused this Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, on this 13th day of June,
1997, but all to be effective as of day and year first above written.
TRANSAMERICAN REFINING CORPORATION
Attest:____________________________________________________________________
By:________________________
Tim Moore Ed Donahue
Assistant Secretary Vice President
TRANSAMERICAN ENERGY CORPORATION
Attest:____________________________________________________________________
By:________________________
Tim Moore Ed Donahue
Assistant Secretary Vice President
FIRST UNION NATIONAL BANK, f/k/a
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, Trustee
By:_______________________
W. Jeffrey Kramer,
Vice President
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EXHIBIT A
TRANSAMERICAN REFINING CORPORATION
OFFICERS' CERTIFICATE
The undersigned, Ed Donahue, Vice President, and Tim Moore, Assistant
Secretary, of TransAmerican Refining Corporation, a Texas corporation (the
"Company"), do hereby certify pursuant to Section 2.03 of that certain Second
Supplemental Indenture, dated as of June 13, 1997, among the Company,
TransAmerican Energy Corporation, a Delaware corporation ("TEC") and First
Union National Bank, f/k/a First Fidelity Bank, National Association, as
Trustee (the "Trustee"), and Section 14.4 of that certain Indenture, dated as
of February 15, 1995, among the Company, TransTexas Transmission Corporation
and the Trustee, as amended and supplemented (the "Indenture"), as follows:
1. The undersigned have read Section 9.2 of the Indenture.
2. The undersigned have participated in the solicitation of
consents (the "Consents") to the Proposed Amendments (as defined in the
Supplemental Indenture), and the Company has received consents from the Holders
(as defined in the Indenture) of at least 66 2/3% of the aggregate principal
amount of the Notes to the Proposed Amendments.
3. In our opinion, we have made such examination and
investigation as is necessary to enable us to express an informed opinion as to
whether or not the conditions precedent in the Indenture requiring compliance
by the Company and TEC to or concurrently with the execution and delivery by
the Company and TEC of the Second Supplemental Indenture have been complied
with.
4. In our opinion, each of the conditions precedent in the
Indenture requiring compliance by the Company and TEC prior to or concurrently
with the execution and delivery by the Company and TEC of the Second
Supplemental Indenture have been complied with, and the Trustee is authorized
or permitted, pursuant to Section 9.2 of the Indenture, to execute the Second
Supplemental Indenture.
IN WITNESS WHEREOF, we have executed this Certificate as of June 13,
1997.
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Ed Donahue, Vice President
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Tim Moore, Assistant Secretary
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EXHIBIT B
Matters to be Covered by Gardere & Wynne, L.L.P. Opinion
1. The Second Supplemental Indenture has been duly
authorized, executed and delivered by the Company and TEC.
2. Each of the conditions precedent in the Current
Indenture requiring compliance by the Company and TEC prior to or
concurrently with the execution and delivery by the Company and TEC of
the Second Supplemental Indenture has been complied with by the
Company and TEC, and Section 9.2 of the Current Indenture authorizes
or permits the Trustee to execute the Second Supplemental Indenture.
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TRANSAMERICAN REFINING CORPORATION
OFFICERS' CERTIFICATE
The undersigned, Ed Donahue, Vice President, and Tim Moore, Assistant
Secretary, of TransAmerican Refining Corporation, a Texas corporation (the
"Company"), do hereby certify pursuant to Section 2.03 of that certain Second
Supplemental Indenture, dated as of June 13, 1997, among the Company,
TransAmerican Energy Corporation, a Delaware corporation ("TEC") and First
Union National Bank, f/k/a First Fidelity Bank, National Association, as
Trustee (the "Trustee"), and Section 14.4 of that certain Indenture, dated as
of February 15, 1995, among the Company, TEC and the Trustee, as amended and
supplemented (the "Indenture"), as follows:
1. The undersigned have read Section 9.2 of the Indenture.
2. The undersigned have participated in the solicitation of
consents (the "Consents") to the Proposed Amendments (as defined in the
Supplemental Indenture), and the Company has recieved consents from the Holders
(as defined in the Indenture) of at least 66 2/3% of the aggregate principal
amount of the Notes to the Proposed Amendments.
3. In our opinion, we have made such examination and
investigation as is necessary to enable us to express an informed opinion as to
whether or not the conditions precedent in the Indenture requiring compliance
by the Company and TEC to or concurrently with the execution and delivery by
the Company and TEC of the Second Supplemental Indenture have been complied
with.
4. In our opinion, each of the conditions precedent in the
Indenture requiring compliance by the Company and TEC prior to or concurrently
with the execution and delivery by the Company and TEC of the Second
Supplemental Indenture have been complied with, and the Trustee is authorized
or permitted, pursuant to Section 9.2 of the Indenture, to execute the Second
Supplemental Indenture.
IN WITNESS WHEREOF, we have executed this Certificate as of June 13,
1997.
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Ed Donahue, Vice President
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Tim Moore, Assistant Secretary