1
EXHIBIT 4.32
- --------------------------------------------------------------------------------
TRANSAMERICAN REFINING CORPORATION,
as Issuer,
and
FIRST UNION NATIONAL BANK,
as Trustee
------------------------
FIRST SUPPLEMENTAL INDENTURE
Effective as of December 15, 1998
--------------------------
$200,000,000 16% Senior Subordinated Notes due 2003
- --------------------------------------------------------------------------------
2
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, effective as of December 15, 1998
(the "Supplemental Indenture"), is made and entered into by and among
TRANSAMERICAN REFINING CORPORATION, a Texas corporation (the "Company"), and
FIRST UNION NATIONAL BANK (the "Trustee"), under an Indenture dated as of
December 30, 1997, by and between the Company and the Trustee (the "Original
Indenture"). All capitalized terms used in this Supplemental Indenture that are
defined in the Original Indenture, either directly or by reference therein, have
the respective meanings assigned to them therein, except to the extent such
terms are otherwise defined in this Supplemental Indenture or the context
clearly requires otherwise.
WHEREAS, Section 9.2 of the Original Indenture provides, among other
things, that, with the consent of the Holders of not less than a majority in
aggregate Value of then outstanding Notes or, with respect to certain matters,
not less than 66-2/3% in aggregate Value of the Notes at the time outstanding,
the Company, when authorized by Board Resolutions, and the Trustee may amend or
supplement the Original Indenture or the Security Documents or enter into an
indenture supplemental thereto for the purposes of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Original
Indenture or the Security Documents or of modifying in any manner the rights of
the Holders under the Original Indenture or the Notes; and
WHEREAS, the Company has solicited consents from the Holders of the
Notes (the "Consent Solicitation") to amendments (the "Proposed Amendments") to
(i) the Original Indenture and (ii) the Registration Rights Agreement dated
December 30, 1998 by and among the Company and Jefferies & Company, Inc.; and
WHEREAS, the Holders of at least 66-2/3% in aggregate Value of Notes at
the time outstanding have consented to the Proposed Amendments pursuant to the
Consent Solicitation; and
WHEREAS, the Board of Directors of the Company has adopted resolutions
authorizing and approving the Proposed Amendments and the Company and the
Trustee are executing and delivering this Supplemental Indenture in order to
provide for such amendments;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Supplemental
Indenture hereby agree as follows:
-2-
3
ARTICLE I
AMENDMENTS TO ORIGINAL INDENTURE
Section 1.01. Amended Definitions. The following definitions in Section
1.1 of the Original Indenture are hereby amended as follows:
(a) The definition of "Accounts Receivable Subsidiary" is hereby
amended to read in its entirety as follows:
"Accounts Receivable Subsidiary" means a subsidiary
of TEC, the Company, TCR Holding or TransContinental
designated as an Accounts Receivable Subsidiary for the
purpose of financing the accounts receivable of
TransContinental.
(b) The definition of "Affiliate" is hereby amended to read in its
entirety as follows:
"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 10% 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). Notwithstanding
the foregoing, none of the Purchasers shall be deemed to be
"Affiliates" of the Company or any of its Subsidiaries.
(c) The definition of "Capital Improvement Program" is hereby amended
to read in its entirety as follows:
"Capital Improvement Program" means the expansion and
improvement program at the Company (or, after the Transaction
Closing Date, TransContinental).
(d) The definition of "CATOFIN(R) Unit" is hereby amended to read in
its entirety as follows:
"CATOFIN(R) Unit" means certain real property owned
by the Company before the Transaction Closing Date as more
specifically defined in the security documents relating to the
TEC Notes, together with all personal property of
TransContinental 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.
(e) The definition of "Change of Control" is hereby deleted in its
entirety.
(f) The definition of "Consolidated Fixed Charge Coverage Ratio" is
hereby amended to read in its entirety as follows:
-3-
4
"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) (x) with
respect to any Person other than TCR Holding, 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 or (y) with
respect to TCR Holding, the aggregate amount of dividends and
other distributions on the Capital Stock of TransContinental
received by TCR Holding from TransContinental during 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 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.
(g) The definitions of "Construction Supervisor" and "Debt" are hereby
amended to read in their entirety as follows:
"Construction Supervisor" means Baker & O'Brien,
Inc., as construction supervisor of the Capital Improvement
Program or any successor construction supervisor appointed by
TEC with the approval of TCR Holding, which approval shall not
be unreasonably withheld.
"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
services or supply contracts which required 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
-4-
5
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 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.
Notwithstanding anything to the contrary contained herein, for
purposes of Section 4.11, notes issued in satisfaction of the
interest obligation on up to $150 million principal amount of
15% Senior Secured Notes due 2003 issued pursuant to the
Transaction in accordance with the terms thereof shall not
constitute Debt except for purposes of the third to last and
second to last paragraphs of Section 4.11.
(h) The definition of "Disqualified Capital Stock" is hereby amended to
read in its entirety as follows:
"Disqualified Capital Stock" means, with respect to
any Person, any Capital Stock of such Person or its
Subsidiaries that, by its 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 30, 2003.
(i) The definition of "Gas Purchase Agreement" is hereby amended to
read in its entirety as follows:
"Gas Purchase Agreement" means the Interruptible Gas
Sales Terms and Conditions between the Company and TransTexas,
as in effect on the Issue Date and as amended from time to
time, provided that any such amendment is approved by the
Board of Directors of each of the parties thereto.
(j) The definition of "Insurance Proceeds" is hereby amended to read in
its entirety as follows:
-5-
6
"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, TEC, TCR Holding, TransContinental, 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.
(k) The definition of "Permitted Investment" is hereby amended to read
in its entirety as follows:
"Permitted Investment" means, when used with
reference to the Company or its Subsidiaries, (i) trade credit
extended to persons in the ordinary course of business; (ii)
purchases of Cash Equivalents; (iii) Investments by any of the
TARC Entities or any of the TCR Holding Entities in any of the
TCR Holding Entities or in TransContinental and Investments by
any of the TCR Holding Entities in any of the TARC Entities;
(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 million in the aggregate
outstanding at any time; (vii) margin deposits in connection
with Permitted Hedging Transactions; (viii) an Investment in
one or more Unrestricted Subsidiaries of the Company in an
aggregate amount not in excess of $10,000,000 (net of returns
on investment) plus the assets comprising the CATOFIN(R) Unit
owned by the Company as of the date hereof, less the amount of
any Unrestricted Non-Recourse Debt outstanding of the Company
or any of its Subsidiaries; (ix) deposits permitted by the
definition of Permitted Liens or any extension, renewal, or
replacement of any of them; (x) Investments in Accounts
Receivables Subsidiary Notes by any of the TARC Entities or
any of the TCR Holding Entities in amounts not to exceed the
greater of $20 million or 20% of the TransContinental
Borrowing Base at any one time; (xi) Investments by the
Company in a reincorporation subsidiary in connection with the
initial capitalization thereof and not to exceed $1,000; (xii)
Investments by the Company or any of its wholly owned
Subsidiaries in an aggregate amount not to exceed $250,000,
for the purpose of facilitating a redemption, repurchase or
other retirement for value of the Old TARC Warrants or the
conversion of the Old TARC Warrants into the right to receive
cash; (xiii) a guaranty by a Subsidiary of the Company
permitted under clause (h) of Section 4.11; (xiv) deposits
permitted by the definition of "Permitted Liens" or any
extension, renewal, or replacement of any of them; (xv) other
Investments not in excess of $5 million at any time
outstanding; (xvi) 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 million in the aggregate outstanding at
any one time, (xvii) Investments in money market mutual or
similar funds having assets in excess of $100,000,000 and
(xviii)
-6-
7
the purchase or other acquisition by TARC, TCR Holding and
their Subsidiaries of TEC Notes or by TCR Holding and its
Subsidiaries of Notes or Series C/D Notes.
(l) The definition of "Permitted Liens" is hereby amended to read in
its entirety as follows:
"Permitted 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 the Company or
any of its Subsidiaries 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 the Company or any of its
Subsidiaries 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 million or (ii) appeal or supersedeas
bonds (or to secure reimbursement obligations or letters of
credit in support of such bonds); (d) easements, servitudes,
rights-of-way, zoning, similar restrictions and other similar
encumbrances or title defects incurred in the ordinary course
of business which, in the aggregate, are not material in
amount and which do not, in any case, materially detract from
the value of the property subject thereto (as such property is
used by any of the TARC Entities) or materially interfere with
the ordinary conduct of the business of any of the TARC
Entities including without limitation, any easement or
servitude granted in connection with the financing of the
Storage Assets; (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 million; (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 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 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
operations of such New Property, (ii) the principal amount of
the Debt secured by such Lien does not exceed 100% of such
costs plus reasonable financing fees and other associated
reasonable out-of-pocket expenses and (iii) any such Lien
shall not extend to or cover any property or assets other than
such item of New
-7-
8
Property and any improvements on such New Property; (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 and Liens encumbering contract rights under
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 the
Company or TCR Holding; (r) Liens on the proceeds of any
property subject to a Permitted Lien and Liens on the proceeds
of any Debt Incurred in accordance with the provisions hereof,
or on deposit accounts containing any such proceeds; (s) Liens
imposed in connection with Debt incurred pursuant to clause
(f) of Section 4.11; provided, that such liens, if not
Permitted Liens, do not extend to property other than the
Storage Assets, the proceeds of financing related to the
Storage Assets or deposit accounts containing such proceeds;
and (t) any extension, renewal or replacement of the Liens
created pursuant to any of clauses (a) through (g), (i)
through (s) or (u) provided that such Liens would have
otherwise been permitted under such clauses, and provided
further that the Liens, permitted by this clause (t) do not
secure any additional Debt or encumber any additional
property; (u) Liens that secure Senior Debt; (v) Liens on any
property of the Company or its Subsidiaries (or any agreement
to grant such Liens) securing the Series C/D Notes or the
Notes, (w) Liens on any Property owned by TransContinental and
(x) Liens on any Property owned by the Company or TCR Holding
to secure Debt permitted by clause (s) of Section 4.11.
(m) The definition of "Phase I Completion Date" is hereby amended to
read in its entirety as follows:
"Phase I Completion Date" means the date on which the
Construction Supervisor issues a written notice (the "Phase I
Completion Notice") to TEC certifying that the Phase I
Performance Test has been completed.
(n) A definition of "Phase I Performance Test " is hereby added to the
Original Indenture to read in its entirety as follows:
"Phase I Performance Test" means for a period of at
least 72 uninterrupted hours, TransContinental's refinery has
sustained (i) an average feedstock throughput level of at
least 150,000 barrels per day and (ii) 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.
-8-
9
(o) The definition of "Phase II Completion Date" is hereby amended to
read in its entirety as follows:
"Phase II Completion Date" means the date on which
the Construction Supervisor issues a written notice (the
"Phase II Completion Notice") to TEC certifying that for a
period of at least 72 uninterrupted hours, TransContinental's
refinery has sustained (i) an average feedstock throughput
level of at least 180,000 barrels per day and (ii) 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 60%, when using a combined
Crude Unit feedstock slate with an average API Gravity of 22
degrees or less.
(p) The definition of "Plans" is hereby amended to read in its entirety
as follows:
"Plans" means (a) the plans and specifications
prepared by or on behalf of the Company (or, after the
Transaction Closing Date, TransContinental), which describe
and show the proposed expansion and modification of the
Company's (or, after the Transaction Closing Date,
TransContinental's) refinery as amended from time to time with
the consent of the Construction Supervisor and (b) a budget
prepared by or on behalf of the Company (or, after the
Transaction Closing Date, TransContinental) as amended from
time to time with the consent of the Construction Supervisor.
(q) A definition of "Purchasers" is hereby added to the Original
Indenture to read in its entirety as follows:
"Purchasers" means the initial purchasers from TARC
pursuant to the Transaction of voting stock of TCR Holding and
their transferees and Affiliates (in each case other than the
Company and its Subsidiaries).
(r) A definition of "Refinery Assets" is hereby added to the Original
Indenture to read in its entirety as follows:
"Refinery Assets" means substantially all of the
assets of TARC immediately prior to the Transaction Closing
Date.
(s) The definition of "Related Person" is hereby amended to read in its
entirety as follows:
"Related Person" means (i) any Person (other than a
Purchaser or TransContinental and any of its Subsidiaries)
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
-9-
10
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).
(t) The definition of "Restricted Payment" is hereby amended to read in
its entirety as follows:
"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 Pari Passu Debt or 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 Pari Passu
Debt or 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 TCR Holding or from any of the
Company's Subsidiaries or to TCR Holding by any of TCR
Holding's Subsidiaries, (iii) any defeasance, redemption,
repurchase, or other acquisition or retirement for value, in
whole or in part, of any Pari Passu Debt or 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 Services Agreement, the
Expense Reimbursement Agreement, the Office Leases, the
Transfer Agreement or the Tax Allocation Agreement, (v) any
redemption, repurchase or other retirement for value of the
Old TARC Warrants by the Company, including any premium paid
thereon, (vi) 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 clauses (o), (s) and (u) of the covenant
described herein under the heading "Limitation on the
Incurrences of Additional Debt and Issuances of Disqualified
Capital Stock," (vii) the purchase by the Company or TCR
Holding of shares of Capital Stock of the Company, TCR
Holding, TransContinental, TransTexas or TTXD in connection
with each of its employee benefit plans, including without
limitation any employee stock ownership plans or any employee
stock option plans, in an aggregate amount, with respect to
the issuer, not to exceed 7% of the aggregate number of shares
of voting stock held by nonaffiliates of the issuer measured
from the date of the first such purchase, (viii) distributions
of common stock of TransTexas to TEC, (ix) any dividend or
other distribution on the Capital Stock of any Subsidiary of
the Company, (x) any purchase of Capital Stock of TCR Holding
by the Company, (xi) any purchase of Capital Stock of
TransContinental by TCR Holding, (xii) any dividend or payment
on shares of Capital Stock of TCR Holding the proceeds of the
issuance of which are used to purchase TEC Notes and (xiii)
the TCR Holding Participating Preferred Stock Redemption.
-10-
11
(u) The definition of "Senior Debt" is hereby amended to read in its
entirety as follows:
"Senior Debt" means, all Debt of the Company or, with
respect to its use in the definition of "Permitted Liens"
only, TCR Holding, including, without limitation, the TARC
Discount Notes, the TARC Mortgage Notes, the TARC Working
Capital Loan and the TARC Intercompany Loan, now or hereafter
created, incurred, assumed or guaranteed by the Company (and
all renewals, extensions or refundings thereof or of any part
thereof) (including the principal of, interest on and fees,
premiums, expenses (including costs of collection),
indemnities and other amounts payable in connection with such
Indebtedness, and including Post-Commencement Amounts), unless
the instrument governing such Debt expressly provides that
such Debt is not senior or superior in right of payment to the
Notes. Notwithstanding the foregoing, Senior Debt of the
Company shall not include (i) Debt evidenced by the Series C/D
Notes and the Notes, (ii) Debt of the Company to any
Subsidiary of the Company or to any Unrestricted Subsidiary of
the Company (other than to facilitate the purchase of the
common stock purchase warrants of TARC), or (iii) any amounts
payable or other Debt to trade creditors created, incurred,
assumed or guaranteed by the Company or any Subsidiary of the
Company in the ordinary course of business in connection with
obtaining goods or services.
(v) A definition of "Series C/D Notes" is hereby added to read in its
entirety as follows:
"Series C/D Notes" means the Company's 16% Senior
Subordinated Notes due 2003 issued pursuant to the Indenture
dated March 16, 1998 between the Company and First Union
National Bank, as trustee, providing for the issuance of such
notes, as such may be amended, supplemented and restated from
time to time.
(w) The definition of "Services Agreement" is hereby amended to read in
its entirety as follows:
"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 approved by the Board of Directors of each
of the parties thereto that will be bound by such amendment.
(x) The definition of "Subsidiary" is hereby amended to read in its
entirety as follows:
"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
-11-
12
purposes of the Indenture provisions "Subsidiary Guarantees,"
and "Limitation on Transactions with Related Persons" a joint
venture an investment in which would constitute a Permitted
Investment, provided that, for purposes of the covenant
described herein under the heading "Limitation on Transactions
with Related Persons," such investment is not with a Related
Person other than 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 or (ii) any Unrestricted
Subsidiary of such Person; provided, further, however, that
TCR Holding and its subsidiaries other than TransContinental
shall be "Subsidiaries" of TARC (except for purposes of
Section 4.16) and TransContinental shall not be a "Subsidiary"
of any Person.
(y) The definition of "TARC Intercompany Loan" is hereby amended to
read in its entirety as follows:
"TARC Intercompany Loan" means the senior secured
promissory note from the Company to TEC in the fully accreted
principal amount of $920,000,000 upon substantially the terms
described in the Registration Statement on Form S-4, as
amended, of TEC under the heading "Description of Existing
Indebtedness -- TARC Intercompany Loan" and as amended from
time to time in accordance with its terms.
(z) A definition of "TARC Intercompany Loan Amendment" is hereby added
to the Original Indenture to read in its entirety as follows:
"TARC Intercompany Loan Amendment" means the second
amendment to the TARC Intercompany Loan Agreement upon
substantially the terms described in the form attached hereto
as Exhibit .
(aa) A definition of "TransContinental" is hereby added to the Original
Indenture to read in its entirety as follows:
"TransContinental" means TransContinental Refining
Corporation, a Delaware corporation, to which the Refinery
Assets will be transferred by TCR Holding pursuant to the
Transaction and, for purposes of Section 4.11 hereof, its
Subsidiaries.
(bb) The definition of "TARC Borrowing Base" is hereby amended to read
in its entirety as follows:
"TransContinental 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 TransContinental 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 TransContinental 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, TransContinental may utilize, to the extent
reasonable, the most recent available information for purposes
of calculating the TransContinental Borrowing Base.
-12-
13
(cc) A definition of "TCR Holding" is hereby added to the Original
Indenture to read in its entirety as follows:
"TCR Holding" means TCR Holding Corporation, a
Delaware corporation, to which the Refinery Assets will be
transferred by TARC pursuant to the Transaction.
(dd) A definition of "TCR Holding Entities" is hereby added to the
Original Indenture to read in its entirety as follows:
"TCR Holding Entities" means TCR Holding and each of
its Subsidiaries.
(ee) A definition of "TCR Holding Participating Preferred Stock" is
hereby added to the Original Indenture to read in its entirety as
follows:
"TCR Holding Participating Preferred Stock" means the
participating preferred stock of TCR Holding issued pursuant
to the Transaction.
(ff) A definition of "TCR Holding Participating Preferred Stock
Redemption" is hereby added to the Original Indenture to read in its
entirety as follows:
"TCR Holding Participating Preferred Stock
Redemption" means the redemption by TCR Holding of the TCR
Holding Participating Preferred Stock in exchange for (i) debt
securities of TCR Holding with an aggregate principal amount
equal to the liquidation preference of the TCR Holding
Participating Preferred Stock, with a maturity date of June 1,
2002 and bearing interest at a rate sufficient to pay interest
on the TARC Intercompany Loan, the Notes and the Series C/D
Notes and (ii) common stock of TCR Holding equal to 30.6% of
the equity interest in TCR Holding and 41% of the voting power
of TCR Holding's capital stock.
(gg) A definition of "TARC Intercompany Subordinated Note" is hereby
added to the Original Indenture to read in its entirety as follows:
"TARC Intercompany Subordinated Note" means that
certain note and related documents (i) evidencing debt of TCR
Holding to TARC in an amount and with principal and interest
payment terms sufficient to service the payment of interest
and principal on the Notes and the Series C/D Notes (after
giving effect to any amounts in any Interest Reserve Account)
and (ii) containing a covenant of TCR Holding to pledge the
stock it owns of TransContinental, if any, as of the date of
the payment in full of the TARC Intercompany Loan; provided,
that TCR Holding shall not be required to grant such Lien
until the TARC Intercompany Loan has been paid in full and has
not been refinanced, refunded or replaced with the proceeds of
Other Debt ("Other Debt"), which Other Debt has a lower cost
of capital to TCR Holding than the TARC Intercompany Loan and
the principal amount of such Other Debt (or, if such Other
Debt is issued with original issue discount, the original
issue amount of such Other Debt) is equal to or less than the
original issue price of, plus amortization of the original
issue discount on, the TARC Intercompany Loan at the time of
the incurrence of such Other Debt.
-13-
14
(hh) A definition of "TARC Working Capital Loan" is hereby added to the
Original Indenture to read in its entirety as follows:
"TARC Working Capital Loan" means a loan by TEC to
TARC of up to $50 million, which will be assumed by TCR
Holding pursuant to the Transaction.
(ii) The definition of "Tax Allocation Agreement" is hereby amended to
read in its entirety as follows:
"Tax Allocation Agreement" means the Tax Allocation
Agreement, dated as of August 24, 1993, among TNGC Holdings
Corporation, the Company, TEC and other subsidiaries of TNGC
Holdings Corporation, as in effect on the Issue Date and as
amended from time to time, provided that any such amendment is
approved by the Board of Directors of each of the parties
thereto that will be bound by such amendment.
(jj) A definition of "Transaction" is hereby added to the Original
Indenture to read in its entirety as follows:
"Transaction" means a series of related transactions
(as more fully described in the Company's Consent Solicitation
Statement dated October 5, 1998, as amended, pursuant to which
consents were solicited from the Holders to amendments to the
Indenture to facilitate the Transaction, which description is
incorporated herein by reference) pursuant to which, among
other things, (i) the Lien on the TARC Collateral (as defined
in the TEC Indenture) is released, (ii) TARC transfers to TCR
Holding the Refinery Assets in exchange for (x) all of the
capital stock of TCR Holding and (y) the assumption by TCR
Holding of certain debt and other obligations of TARC, (iii)
TCR Holding transfers to TransContinental the Refinery Assets
in exchange for all of the common stock of TransContinental
and TransContinental assumes the debt and other obligations of
TARC assumed by TCR Holding other than the TARC Working
Capital Loan and (iv) certain Purchasers purchase (x) debt
securities issued by TARC, (y) equity securities issued by
TransContinental and (z) TCR Holding Capital Stock from TARC
for aggregate gross proceeds of approximately $151 million.
(kk) A definition of "Transaction Closing Date" is hereby added to the
Original Indenture to read in its entirety as follows:
"Transaction Closing Date" means the date the
Refinery Assets are transferred by TARC to TCR Holding and by
TCR Holding to TransContinental pursuant to the Transaction.
(ll) The definition of "Unrestricted Non-Recourse Debt" is hereby
amended to read in its entirety as follows:
"Unrestricted Non-Recourse Debt" of the Company,
TransContinental or any of the Subsidiaries of the Company
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
-14-
15
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)
20% of the Company's Consolidated EBITDA since the Phase II
Completion Date in the case of the Company, (y) 20% of TCR
Holding's Consolidated EBITDA since the Phase II Completion
Date in the case of TCR Holding or (z) 20% of
TransContinental's Consolidated EBITDA since the Phase II
Completion Date in the case of TransContinental plus in the
case of clause (ii) of this definition of Unrestricted
Non-Recourse Debt, Restricted Payments permitted to be made
pursuant to Section 4.3.
Section 1.02. Section 4.3 of the Original Indenture. Section 4.3 of the
Original Indenture is hereby amended to read in its entirety as follows:
Section 4.3 Limitation on Restricted Payments. The
Company shall not, and shall not permit any of its
Subsidiaries 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
unless such dividends, distributions, or payments are made in
cash or Capital Stock or a combination thereof. In addition,
the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted
Payment; provided, however, that the Company or TCR Holding
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 the
Company:
(a) the Company'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) 50% of Adjusted Consolidated Net Income
of the Company 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 the Company'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 the Company
from the issuance or sale (other than to 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
-15-
16
amount of any write-downs, write-offs, other negative
revaluations, and other negative extraordinary
charges not otherwise reflected in the Company's
Adjusted Consolidated Net Income during such period;
and
(ii) in the case of Restricted Payments by TCR Holding:
(a) TCR Holding'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 TCR Holding 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 Transaction Closing Date and on or prior to
the date of such Restricted Payment, would not exceed
an amount equal to the sum of (w) $1,000,000, plus
(x) 50% of Adjusted Consolidated Net Income of TCR
Holding accrued for the period (taken as one
accounting period) from the first full fiscal quarter
that commenced after the Transaction Closing Date to
and including the fiscal quarter ended immediately
prior to the date of each calculation for which
financial statements are available (or, if TCR
Holding'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 TCR Holding from the issuance or sale
(other than to a Subsidiary of TCR Holding) of its
Qualified Capital Stock from and after the
Transaction Closing 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 TCR Holding's
Adjusted Consolidated Net Income during such period;
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 1.03. Section 4.7 of the Original Indenture. Section 4.7(d) of
the Original Indenture is hereby deleted in its entirety.
Section 1.04. Section 4.8 of the Original Indenture. Section 4.8 of the
Original Indenture is hereby amended to read as follows:
Section 4.8 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 shall include in all
such reports and information a summary of the status of the
Company's Capital Improvement Program, including a description
of sources of funds available for the completion of the
Capital Improvements Program. The Company agrees to continue
to be subject to and comply with
-16-
17
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).
The Company shall, upon request, provide to each
Holder and to each beneficial owner and prospective purchaser
of Notes identified by any Holder of Restricted Notes the
information required by clause (d)(4) of Rule 144A until the
earlier to occur of (i) there existing no further necessity
for an offer or sale of the Notes to qualify for an exemption
under such Rule or (ii) the consummation of a registered
exchange offer for the Notes.
Section 1.05. Section 4.10 of the Original Indenture. Section 4.10 of
the Original Indenture is hereby amended as follows:
(a) Section 4.10(a) of the Original Indenture is hereby amended to read
in its entirety as follows:
(a) The Company shall not, and shall not permit any
of its Subsidiaries to, enter directly or indirectly into, or
permit to exist, any transaction or series of related
transactions with any 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), (xi),
(xii), (xvi) and (xviii) 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 between the Company and
any of its Wholly Owned Subsidiaries or between Wholly Owned
Subsidiaries of the Company; (D) transactions pursuant to the
Services Agreement, the Tax Allocation Agreement, the Gas
Purchase Agreement, and the Expense Reimbursement Agreement,
in each case including amendments thereto that are approved by
the Board of Directors of each of the parties thereto that
will be bound by such amendments, and the Transfer Agreement,
the TARC Intercompany Loan and related security documents, and
the Registration Rights Agreement; (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 $200,000
per year; (F) any employee compensation arrangement in an
amount which together with the amount of all other cash
compensation paid to such
-17-
18
employee by the Company and its Subsidiaries does not provide
for cash compensation in excess of $5,000,000 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; (G) loans to the Company and TCR Holding which are
permitted to be Incurred pursuant to the terms of Section
4.11; (H) the amounts payable by the TEC and its Subsidiaries
to Southeast Contractors for employee services provided to the
Company or TransContinental 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; (I) the Company and its
Subsidiaries may pay a management fee to TransAmerican in an
amount not to exceed $2,500,000 per year; (J) transactions
effected pursuant to the Transaction, including without
limitation (i) the execution, delivery and performance of the
TARC Intercompany Loan Amendment, the TCR Holding Pledge
Agreement, an amendment of the Services Agreement and a
Securities Purchase Agreement among TARC, TCR Holding,
TransContinental, TEC and certain of the Purchasers providing
for the sale to such Purchasers of Capital Stock of TCR
Holding owned by TARC pursuant to the Transaction, (ii) the
transfer of the Refinery Assets by TARC to TCR Holding and, as
consideration therefor, the issuance by TCR Holding to TARC of
Capital Stock of TCR Holding, the assumption by TCR Holding of
certain debt and obligations of TARC (including Debt of TARC
to the Purchasers and certain others), and (iii) the transfer
of the Refinery Assets by TCR Holding to TransContinental and,
as consideration therefor, the issuance by TransContinental of
its common stock to TCR Holding and the assumption by
TransContinental of certain debt and obligations of TCR
Holding; (K) the delivery of TEC Notes to TEC in satisfaction
of the TARC Intercompany Loan; (L) the issuance and sale of
the TCR Holding Participating Preferred Stock; (M) the TCR
Holding Participating Preferred Stock Redemption; and (N)
transactions between or among TCR Holding or TransContinental
and any of their respective Related Persons, provided such
transaction is approved by the Board of Directors of each of
the parties thereto.
(b) Section 4.10(b) of the Original Indenture is hereby amended to read
in its entirety as follows:
(b) Without limiting the foregoing, except for sales
of accounts receivable to an Accounts Receivable Subsidiary in
accordance with Section 4.20, (i) with respect to any Related
Person Transaction or series of Related Person Transactions
(other than any Related Person Transaction described in clause
(A) (with respect to Permitted Restricted Payments by virtue
of clauses (i), (ii), (iv), (vii), (ix), (x) or (xi) of the
proviso contained in the definition of "Restricted Payments"),
(C), (D), (E), (G), (J), (K), (L), (M) or (N) of Section
4.10(a)) with an aggregate value in excess of $5,000,000, 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
-18-
19
(other than any Related Person Transaction described in clause
(A) (with respect to permitted Restricted Payments by virtue
of clauses (i), (ii), (iv), (vii), (ix), (x) or (xi) of the
proviso contained in the definition of "Restricted Payments")
(C), (D), (E), (G), (J), (K), (L), (M) or (N) of Section
4.10(a)) with an aggregate value in excess of $10,000,000, 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 nationally recognized investment banking or
accounting firm; provided that such opinion shall not be
necessary if approval of the Board of Directors to such
Related Person Transaction has been obtained after receipt of
bona fide bids of at least two other independent parties and
such Related Person Transaction is in the ordinary course of
business.
Section 1.06. Section 4.11 of the Original Indenture. Section 4.11 of
the Original Indenture is hereby amended as follows:
(a) The first paragraph of Section 4.11 of the Original Indenture is
hereby amended to read in its entirety as follows:
Section 4.11 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 TransContinental or
any of the Company's Subsidiaries 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: (a) Debt evidenced by the Notes and the
Guarantees in an aggregate amount not to exceed $200 million
in proceeds to the Company less the aggregate amount of
proceeds to the Company pursuant to Debt incurred under clause
(p) below; (b) Debt evidenced by the TARC Intercompany Loan
and any other Debt at any time owing by any of the TARC
Entities to TEC in an aggregate outstanding principal amount,
when added to the then outstanding principal amount of the
TARC Intercompany Loan and any other Debt incurred pursuant to
this clause (b) or pursuant to clause (o) below to replace,
extend, renew or refund Debt incurred pursuant to this clause
(b), at any one time outstanding not in excess of $920 million
less any amount repaid pursuant to paragraph (c)(i) of the
covenant described herein under Section 4.14 hereof; (c)
Subordinated Debt of the Company solely to any wholly owned
Subsidiary of the Company, Debt of TCR Holding solely to
TransContinental or any wholly owned Subsidiary of TCR
Holding, Debt or Disqualified Capital Stock of TCR Holding to
TARC, Debt of any wholly owned Subsidiary of the Company
solely to the Company or to any wholly owned Subsidiary of the
Company or Debt of TransContinental or any wholly owned
Subsidiary of TCR Holding solely to TCR Holding or to any
wholly owned Subsidiary of TCR Holding; (d) Debt of
TransContinental outstanding at any time in an aggregate
principal amount not to exceed the greater of (x) $100 million
or (y) the TransContinental Borrowing Base, less, in each
case, the amount of any Debt of an Accounts Receivable
Subsidiary (other than Debt owed to the Company or
TransContinental); (e) Debt in an aggregate principal amount
not to exceed at any one time $50 million; (f) Debt secured by
the Storage Assets in an aggregate amount outstanding at any
one time not to exceed $115 million; (g) Debt secured by a
Permitted Lien that meets the requirements of clause (c), (g),
(m), (o) or (r) of the definition of "Permitted Liens," to the
extent that such Liens would give
-19-
20
rise to Debt under clauses (i), (ii), or (iii) of the
definition of "Debt;" (h) Any guaranty of Debt incurred
pursuant to clauses (d), (e), (g) or (n) hereof which guaranty
shall not be included in the determination of the amount of
Debt which may be Incurred pursuant to (d), (e), (g) or (n)
hereof; (i) Swap Obligations (j) Unrestricted Non-Recourse
Debt; (k) Debt evidenced by the TARC Mortgage Notes; (l)
letters of credit and reimbursement obligations relating
thereto to the extent collateralized by cash or Cash
Equivalents; (m) Debt evidenced by the TARC Discount Notes;
(n) Debt of the Company or any of its Subsidiaries or
TransContinental owed to TEC which is loaned pursuant to terms
of the fourth paragraph of either of the covenants contained
under the headings "-- Excess Cash" and "-- Additional
Interest Excess Cash Offer" under the TEC Indenture in the
aggregate not in excess of $50 million; (o) each of the
Company, its Subsidiaries and TransContinental may Incur Debt
as an extension, renewal, replacement, or refunding of any
item of the Debt permitted to be Incurred by clauses (b), (p),
(r), (v), (w) or (x) hereof, or this clause (o) (each such
item of Debt is referred to as "Refinancing Debt"), provided,
that (1) the maximum principal amount of each item of
Refinancing Debt (or, if such Refinancing Debt is issued with
original issue discount, the original issue price of such
Refinancing Debt) permitted under this clause (o) may not
exceed the lesser of (x) the principal amount of the item of
Debt being extended, renewed, replaced, or refunded plus
Refinancing Fees or (y) if such item of 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 Refinancing Debt plus Refinancing Fees and (2) each item
of Refinancing Debt shall rank with respect to the Notes to an
extent no less favorable in respect thereof to the Holders
than the related Debt being refinanced; (p) Pari Passu Debt or
Subordinated Debt of the Company or TCR Holding with initial
net proceeds to the Company not in excess of $25 million in
the aggregate less the aggregate amount of proceeds to the
Company pursuant to Debt incurred under clause (a) above after
the Issue Date; (q) Debt secured by Liens permitted pursuant
to clauses (h) and (j) of Permitted Liens, in an aggregate
principal amount not to exceed $35 million; (r) Debt of
TransContinental Incurred in connection with the acquisition,
construction or improvement of a CATOFIN(R) Unit not in excess
of 20% of TransContinental'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, (s) Debt of
TARC, TCR Holding or TransContinental with an aggregate
principal amount outstanding at any one time of up to $225
million, (t) Debt of TARC (other than Debt secured by Storage
Assets in the initial aggregate principal amount of $36
million) that is assumed by TCR Holding or TransContinental in
connection with the Transaction, (u) Debt of TCR Holding with
an aggregate principal amount outstanding at any one time not
in excess of $200 million, (v) Debt of TCR Holding (other than
Debt incurred pursuant to clause (s) above) that is assumed by
TransContinental in connection with the Transaction, (w)
Disqualified Capital Stock of TCR Holding or TransContinental
or unsecured Debt of TCR Holding or unsecured or secured Debt
of TransContinental, (1) the proceeds of which are used to
repurchase TEC Notes or (2) that is exchanged for TEC Notes,
(x) Debt or Disqualified Capital Stock of TCR Holding or
TransContinental that is used to refinance or replace the TARC
Intercompany Loan and (y) Debt of the Company, TCR Holding or
TransContinental owed to TEC that does not in the aggregate
exceed $50 million principal amount outstanding at any one
time.
-20-
21
(a) The third to last and second to last paragraph of Section 4.11 of
the Original Indenture is hereby amended to read in its entirety as
follows:
Notwithstanding the foregoing provisions of this
covenant, (a) the Company, TCR Holding and TransContinental
may Incur Senior Debt and the Company, TCR Holding and
TransContinental 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 the
entity incurring such Debt for the Reference Period is greater
than 2.25 to 1, and (b) the Company, TCR Holding and
TransContinental 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 the
entity incurring such Debt 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 the Company, TCR
Holding or TransContinental, 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 the Company, TCR Holding or TransContinental
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 the Company, TCR Holding or
TransContinental, respectively, or one of their respective
Subsidiaries.
Section 1.07. Section 4.12 of the Original Indenture. Section 4.12 of
the Original Indenture is hereby amended to read in its entirety as follows:
Section 4.12 Limitations on Restricting Subsidiary
Dividends. The Company shall not, and shall not permit any of
its Subsidiaries (other than TCR Holding) 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 TCR Holding) 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 the Company nor TCR Holding
may create an encumbrance or restriction on their ability to
pay premium, if any, principal of, or interest on, the TARC
Intercompany Loan.
-21-
22
Section 1.08. Section 4.13 of the Original Indenture. Section 4.13 of
the Original Indenture is hereby amended to read in its entirety as follows:
Section 4.13 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,
other than Permitted Liens. Notwithstanding anything in this
Indenture to the contrary, (i) TARC shall not, directly or
indirectly, Incur or suffer to exist any Lien on the Capital
Stock of TCR Holding owned by it (other than a Lien to secure
the TARC Intercompany Loan), (ii) TCR Holding may incur a Lien
on Capital Stock of TransContinental to secure the TARC
Working Capital Loan and (iii) TransContinental shall not be
bound by this Section 4.13. 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 1.09. Section 4.14 of the Original Indenture. Section 4.14 of
the Original Indenture is hereby amended to read in its entirety as follows:
Section 4.14 Limitation on Asset Sales. Intentionally
Omitted.
Section 1.10. Section 4.18 of the Original Indenture. Section 4.18 of
the Original Indenture is hereby amended to read as follows:
Section 4.18 Limitations on Line of Business. The
Company shall not directly or indirectly engage to any
substantial extent in any line or lines of business activity
other than a Related Business and, such other business
activities as are reasonably related or incidental thereto.
The Company shall not permit TransContinental directly or
indirectly to engage to any substantial extent in any line or
lines of business activity other than a Related Business or
such other business activities as are reasonably related or
incidental thereto.
Section 1.11. Section 4.20 of the Original Indenture. Section 4.20(a)
of the Original Indenture is hereby amended to read as follows:
(a) Notwithstanding the provisions of Section 4.3,
the Company 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 the Company 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
million or 20% of the TransContinental Borrowing Base at any
time;
Section 1.12. Section 4.23 of the Original Indenture. Section 4.23 of
the Original Indenture is hereby deleted.
-22-
23
Section 1.13. Sections 4.23 and 4.24 of the Original Indenture. New
Sections 4.23 and 4.24 are hereby added to the Original Indenture to follow
Section 4.22 to read in their entirety as follows:
Section 4.23 Monthly Status Reports. The Company
shall cause TransContinental to, (A) not later than the 20th
day of each month (or, if such day is not a Business Day, then
the first Business Day following such day), commencing in
December 1998 and continuing through the Phase II Completion
Date, issue a press release (and, if applicable, file a copy
thereof with the SEC pursuant to a Form 8-K Current Report)
generally disclosing the status of completion of the Capital
Improvement Program through the end of the immediately
preceding month and (B) conduct a monthly telephone conference
call relating thereto with the chief executive officer of TARC
or his designee in which Holders will be entitled to
participate and provide notice by press release of the time
and place of such call at least 48 hours in advance thereof.
Section 4.24 Limitation on Issuances of Equity
Securities by TCR Holding or TransContinental. The Company
shall not permit TCR Holding, TransContinental or any
Subsidiary of either of them to issue (other than pursuant to
the Transaction, including securities issued upon conversion
of or in exchange for securities issued pursuant to the
Transaction upon the terms established in connection with the
Transaction, or issuances to TransContinental or any of its
Subsidiaries) any Capital Stock or other equity securities
(other than Disqualified Capital Stock that is not convertible
into or exchangeable for Qualified Capital Stock and other
equity securities that are not accounted for as equity
securities in accordance with GAAP) unless the issuer first
obtains a favorable written opinion as to the fairness of such
transaction to the issuer, from a financial point of view,
from an independent nationally recognized accounting or
investment banking firm.
Section 1.14. Section 5.1 of the Original Indenture. Section 5.1 of the
Original Indenture is hereby amended to add subsection (d) to read in its
entirety as follows:
(d) Notwithstanding anything contained in this
Article V to the contrary, (i) the provisions of clause (a)
shall not apply to the transfer by TARC to TCR Holding of the
Refinery Assets as part of the Transaction, (ii) the
provisions of clause (a) shall not apply to the transfer to
TransContinental by TCR Holding of the Refinery Assets as part
of the Transaction and (iii) the provisions of clauses (a)(2),
(a)(3) and (a)(5) shall not apply to a merger of TARC with or
into TEC.
Section 1.15. Section 5.2 of the Original Indenture. Section 5.2 of the
Original Indenture is hereby amended to read in its entirety as follows:
Section 5.2 Successor Corporation Substituted. Upon
any consolidation or merger, or any transfer of assets in
accordance with Section 5.1 (other than the transfers of the
Refinery Assets by the Company to TCR Holding and by TCR
Holding to TransContinental pursuant to the Transaction), the
Surviving Person formed by such consolidation or into which
the Company, or a Guarantor, 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, or such Guarantor, as the case may be, under this
Indenture with the same effect as if such Surviving Person had
been named as the Company, or such
-23-
24
Guarantor, 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.
Section 1.16. Section 6.1 of the Original Indenture. Section 6.1(d) of
the Original Indenture is hereby amended to read in its entirety as follows:
(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, any of its
Subsidiaries or TransContinental with an aggregate principal
amount in excess of $20,000,000 if by reason of such default
the principal of such Debt and all accrued and unpaid interest
thereon has been declared due and payable, or failure to pay
such Debt at its stated maturity, if either (a) such default
results from the failure to pay principal of, premium, if any,
or interest on any such Debt when due and such default
continues beyond any applicable cure, forebearance or notice
period; provided that a waiver by the lenders of such Debt of
such default shall constitute a waiver hereunder for the same
period or (b) as a result of such default, the maturity of
such Debt has been accelerated prior to its scheduled
maturity, and such default or acceleration continues for a
period of 10 days; provided, that a rescission or annulment of
such default or acceleration (prior to any action taken by the
Trustee with respect to the acceleration of the Obligations
under the Notes) pursuant to the agreement governing such Debt
shall constitute a waiver hereunder for the same period.
Section 1.17. Section 9.1 of the Original Indenture. Section 9.1 of the
Original Indenture is hereby amended to read in its entirety as follows:
Section 9.1 Supplemental Indentures Without Consent
of Holders. Without the consent of any Holder, the Company and
the Guarantors, if any, 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 a
restatement hereof 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 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 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;
-24-
25
(d) to comply with the TIA; or
(e) to restate this Indenture so that it reflects
this Indenture as originally executed as amended by all
amendments and supplements hereto through the date of such
restatement and contains only the then effective provisions of
this Indenture.
Section 1.18. Section 9.6 of the Original Indenture. Section 9.6 of the
Original Indenture is hereby amended to read in its entirety as follows:
Section 9.6 Trustee to Sign Amendments, Etc. The
Trustee shall execute any amendment, supplement, restatement
or waiver authorized pursuant to this Article IX, provided
that the Trustee may, but shall not be obligated to, execute
any such amendment, supplement, restatement 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, restatement or waiver authorized
pursuant to this Article IX is authorized or permitted by this
Indenture.
Section 1.19. Article XI of the Original Indenture. Article XI of the
Original Indenture is hereby amended to read in its entirety as follows:
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
INTENTIONALLY OMITTED
ARTICLE II
GENERAL PROVISIONS
Section 2.01. Effectiveness of Amendments. This Supplemental Indenture
is effective as of the date first above written. However, the provisions of the
Original Indenture amended or eliminated as provided in this Supplemental
Indenture (the "Amended Provisions") shall remain operative in the form in which
they exist in the Original Indenture until the Transaction Closing Date,
whereupon the Amended Provisions will be amended or eliminated as provided
herein, effective immediately prior to the Transaction Closing Date.
Section 2.02. Ratification of Indenture. The Original Indenture is in
all respects acknowledged, ratified and confirmed, and shall continue in full
force and effect in accordance with the terms thereof and as supplemented by
this Supplemental Indenture. The Original Indenture and this Supplemental
Indenture, shall be read, taken and construed as one and the same instrument.
Section 2.03. Certificate and Opinion as to Conditions Precedent.
Simultaneously with and as a condition to the execution of this Supplemental
Indenture, the Company is delivering to the Trustee:
(a) an Officers' Certificate in the form attached hereto as
Exhibit A; and
-25-
26
(b) an Opinion of Counsel covering the matters described in
Exhibit B attached hereto.
Section 2.04. Effect of Headings. The Article and Section headings in
this Supplemental Indenture are for convenience only and shall not affect the
construction of this Supplemental Indenture.
Section 2.05. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 2.06. Counterparts. This Supplemental Indenture may be executed
in any number if counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute the same
instrument.
-26-
27
IN WITNESS WHEREOF, the parties to this Supplemental Indenture have
caused the Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attached, on and effective as of day
and year first above written.
TRANSAMERICAN REFINING CORPORATION,
A Texas corporation
Attest: By:
-------------------------- ------------------------------------
Ann F. Gullion, Name: Ed Donahue
Assistant Secretary Title: Vice President and Secretary
FIRST UNION NATIONAL BANK,
As Trustee
By:
---------------------------
Name:
Title:
-27-