1
EXHIBIT 4.35
- --------------------------------------------------------------------------------
TRANSAMERICAN ENERGY CORPORATION
AND
TRANSAMERICAN REFINING CORPORATION
------------------------
THIRD AMENDMENT TO LOAN AGREEMENT
Dated as of December 15, 1998
--------------------------
- --------------------------------------------------------------------------------
2
THIRD AMENDMENT TO LOAN AGREEMENT
This Third Amendment to Loan Agreement (this "Third Amendment") is made
as of December 15, 1998, by and between TransAmerican Energy Corporation, a
Delaware corporation ("TEC"), and TransAmerican Refining Corporation, a Texas
corporation ("TARC").
W I T N E S S E T H:
WHEREAS, TEC and Firstar Bank of Minnesota, N.A., as Trustee, have
entered into an Indenture dated as of June 13, 1997, as amended (the
"Indenture"), pursuant to which TEC issued $475,000,000 aggregate principal
amount of its 11 1/2% Senior Secured Notes due 2002 and $1,130,000,000 aggregate
principal amount of its 13% Senior Secured Discount Notes due 2002
(collectively, the "Notes"); and
WHEREAS, TEC and TARC have entered into a Loan Agreement dated as of
June 13, 1997, as amended by a First Amendment to Loan Agreement dated as of
December 30, 1997 and a Second Amendment to Loan Agreement dated as of November
13, 1998 (as so amended, the "TARC Intercompany Loan Agreement"), pursuant to
which TEC agreed to loan to TARC an aggregate of $675,648,920 out of the
proceeds of the issuance of the Notes; and
WHEREAS, TEC and TARC have agreed to certain amendments to the TARC
Intercompany Loan Agreement as hereinafter set forth (the "Proposed
Amendments"); and
WHEREAS, pursuant to Section 9.2 of the Indenture, the holders of not
less than 66-2/3% in aggregate Value (as defined in the Indenture) of the Notes
have consented to the Proposed Amendments to the TARC Intercompany Loan
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Third
Amendment hereby agree as follows:
ARTICLE I
AMENDMENTS TO THE TARC INTERCOMPANY LOAN AGREEMENT
Section 1.01. Amendment to First Paragraph. The first paragraph of the
TARC Intercompany Loan Agreement is hereby amended to read in its entirety as
follows:
This Loan Agreement dated as of June 13, 1997 (this
"Agreement") is entered into by and between TransAmerican
Refining Corporation, a Texas corporation, and TransAmerican
Energy Corporation, a Delaware corporation (the "Lender").
Section 1.02. Amended Definitions. The following definitions in Section
1.1 of the TARC Intercompany Loan Agreement are hereby amended as follows:
(a) A definition of "Borrower" is hereby added to the TARC Intercompany
Loan Agreement to read in its entirety as follows:
"Borrower" shall mean TransAmerican Refining Corporation, a Texas
corporation.
3
(b) The definition of "Construction Supervisor" is hereby amended to
read 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 TransContinental, which approval
shall not be unreasonably withheld.
(c) The definition of "Indenture" is hereby amended to read as follows:
"Indenture" shall mean that certain Indenture dated
as of the date hereof between the Lender and the Indenture
Trustee, as supplemented or amended through the Transaction
Closing Date.
(d) The definition of "Independent Director" is hereby deleted in its
entirety.
(e) The definition of "Intercreditor Agreement" is hereby deleted in
its entirety.
(f) The definition of "Permitted Hedging Transactions" is hereby
amended to read as follows:
"Permitted Hedging Transactions" shall mean
non-speculative transactions in futures, forwards, swaps or
option contracts (including both physical and financial
settlement transactions) engaged in by the TARC Entities or
TransContinental as part of their normal business operations
as a risk-management strategy or hedge against adverse changes
in market conditions in the natural gas industry as prices of
feedstock and refined products; provided, that at the time of
such transaction (i) the counter party to any such transaction
is an Eligible Institution or a Person that has an Investment
Grade Rating or has an issue of debt securities or preferred
stock outstanding with an Investment Grade Rating or (ii) such
counter party's obligation pursuant to such transaction is
unconditionally guaranteed in full by, or secured by a letter
of credit issued by, an Eligible Institution or a Person that
has an Investment Grade Rating or that has an issue of debt
securities or preferred stock outstanding with an Investment
Grade Rating.
(g) The definition of "Permitted Investment" is hereby amended to read
as follows:
"Permitted Investment" shall mean, when used with
reference to the Borrower or its Subsidiaries, (i) trade
credit extended to persons in the ordinary course of business;
(ii) purchases of Cash Equivalents; (iii) Investments by the
Borrower or its Subsidiaries in Subsidiaries of TARC or the
Borrower that are engaged, or are formed to engage, in Related
TARC Businesses or in TransContinental; (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 Borrower of the assets
constituting the CATOFIN(R) Unit owned by the Borrower as of
the date hereof; (ix) a guaranty by any Subsidiary of the
Borrower permitted under the Indenture; (x) deposits permitted
by the definition of Permitted Liens or any extension, renewal
or replacement of
2
4
any of them; (xi) any acquisition by the Borrower of tank
storage facilities (or the company that owns such facilities)
in the vicinity of the Refinery; (xii) Investments in Accounts
Receivables Subsidiary Notes by the Borrower, or any of their
respective Subsidiaries in amounts not to exceed the greater
of $20 million or 20% of the TransContinental Borrowing Base
at any one time; (xiii) Investments by the Borrower in an
Accounts Receivable Subsidiary or in a reincorporation
subsidiary, in each case in connection with the initial
capitalization thereof, and not to exceed $1,000; (xiv)
Investments by the Borrower or a wholly owned Subsidiary
solely for the purpose of facilitating a repurchase of the
TARC Warrants; (xv) other Investments not in excess of $5
million at any time outstanding; (xvi) loans made (x) to
officers, directors and employees of the Borrower 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; and (xvii) the purchase or other acquisition by
the Borrower or its Subsidiaries of TEC Notes.
(h) The definition of "Permitted Liens" is hereby amended to read as
follows:
"Permitted Liens" shall mean means (a) Liens imposed
by governmental authorities for taxes, assessments, or other
charges not yet due or which are being contested in good faith
and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of any of the TARC
Entities in accordance with GAAP; (b) statutory Liens of
landlords, carriers, warehousemen, mechanics, materialmen,
repairmen, mineral interest owners, or other like Liens
arising by operation of law in the ordinary course of
business; provided, that (i) the underlying obligations are
not overdue for a period of more than 60 days, or (ii) such
Liens are being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto are
maintained on the books of any of the TARC Entities in
accordance with GAAP; (c) deposits of cash or Cash Equivalents
to secure (i) the performance of bids, trade contracts (other
than borrowed money), leases, statutory obligations, surety
bonds, performance bonds, and other obligations of a like
nature incurred in the ordinary course of business (or to
secure reimbursement obligations or letters of credit issued
to secure such performance or other obligations) in an
aggregate amount outstanding at any one time not in excess of
$5,000,000 or (ii) appeal or supersedeas bonds (or to secure
reimbursement obligations or letters of credit in support of
such bonds); (d) easements, 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 Port Commission Bond Financing; (e) Liens arising by
operation of law in connection with judgments, only to the
extent, for an amount and for a period not resulting in an
Event of Default with respect thereto; (f) Liens securing Debt
or other obligations not in excess of $3,000,000; (g) pledges
or deposits made in the
3
5
ordinary course of business in connection with worker's
compensation, unemployment insurance, other types of social
security legislation, property insurance and liability
insurance; (h) Liens on Equipment, Receivables and Inventory;
(i) Liens on the assets of any entity existing at the time
such assets are acquired by any of the TARC Entities, whether
by merger, consolidation, purchase of assets or otherwise so
long as such Liens (i) are not created, incurred or assumed in
contemplation of such assets being acquired by any of the TARC
Entities and (ii) do not extend to any other assets of any of
the TARC Entities; (j) Liens (including extensions and
renewals thereof) on real or personal property, acquired after
the Issue Date ("New TARC Property"); provided, however, that
(i) such Lien is created solely for the purpose of securing
Debt Incurred to finance the cost (including the cost of
improvement or construction) of the item of New TARC Property
subject thereto and such Lien is created at the time of or
within six months after the later of the acquisition, the
completion of construction, or the commencement of full
operation of such New TARC Property, (ii) the principal amount
of the Debt secured by such Lien does not exceed 100% of such
cost plus reasonable financing fees and other associated
reasonable out-of-pocket expenses (iii) any such Lien shall
not extend to or cover any property or assets other than such
item of New TARC Property and any improvements on such New
TARC Property and (iv) such Lien does not extend to assets or
property which are part of the fixed refinery assets which are
part of the Capital Improvement Program; (k) leases or
subleases granted to others that do not materially interfere
with the ordinary course of business of any of the TARC
Entities, taken as a whole; (l) Liens on the assets of one of
the TARC Entities in favor of another TARC Entity; (m) Liens
securing reimbursement obligations with respect to letters of
credit that encumber documents relating to such letters of
credit and the products and proceeds thereof; provided, that,
such reimbursement obligations are not matured for a period of
over 60 days; (n) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(o) Liens encumbering customary initial deposits and margin
deposits securing Swap Obligations or Permitted Hedging
Transactions 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 or 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 Unrestricted Non-Recourse Debt of the Borrower; (r)
Liens on the proceeds of any property subject to a Permitted
Lien or on deposit accounts containing any such proceeds; (s)
Liens on the proceeds of any property that is not Collateral
on the proceeds of any Debt Incurred in accordance with the
provisions hereof, or on deposit accounts containing any such
proceeds; (t) Liens imposed on the Port Facility Assets; (u)
any extension, renewal or replacement of the Liens created
pursuant to any of the clauses (a) through (g) or (i) through
(t) or (v); (v) Liens on any property owned by
TransContinental; (w) a Lien in favor of the Purchasers and
others securing Debt of TARC or TCR Holding in an aggregate
principal amount not in excess of $150,000,000; and (x) Liens
securing the TARC Intercompany Bridge Loan.
(i) The definition of "Phase I Completion Date" is hereby amended to
read as follows:
4
6
"Phase I Completion Date" shall mean the date on
which the Construction Supervisor issues a written notice (the
"Phase I Completion Notice") to the Borrower certifying that
the Phase I Performance Test has been completed.
(j) A definition of "Phase I Performance Test" is hereby added to the
TARC Intercompany Loan 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.
(k) The definition of "Phase II Completion Date" is hereby amended to
read as follows:
"Phase II Completion Date" means the date on which
the Construction Supervisor issues a written notice (the
"Phase II Completion Notice") to the Borrower 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.
(l) The definition of "Plans" is hereby amended to read as follows:
"Plans" shall mean (a) the plans and specifications
prepared by or on behalf of the Borrower or TransContinental
which describe and show the proposed expansion and
modification of the 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 Borrower or
TransContinental, as amended from time to time with the
consent of the Construction Supervisor.
(m) The definition of "Port Commission Bond Financing" is hereby
amended to read as follows:
"Port Commission Bond Financing" shall mean a
financing transaction involving the transfer (including,
without limitation, transfer by sale, lease, lien or mortgage)
of TransContinental's interest in all or some of the following
assets (together with the granting, at TransContinental's
discretion, of any easements or servitudes reasonably
necessary to the ownership or operation of such assets by the
transferee) that are under construction in or near the
Refinery: (i) the Prospect Road tank farm and other tanks;
(ii) certain dock improvements; (iii) the dock vapor recovery
system; (iv) the coke handling system; (v) the Refinery waste
water treatment facility: and (vi) tankage for liquefied
petroleum gas (the "Port Facility Assets").
(n) A definition of "Purchasers" is hereby added to the Intercompany
Loan Agreement to read as follows:
5
7
"Purchasers" shall mean the initial purchasers from
TARC, pursuant to the Transaction, of the Capital Stock of TCR
Holding which has the right to vote in the election of
directors and their transferees and affiliates (in each case
other than TEC and its Subsidiaries).
(o) A definition of "Refinery Assets" is hereby added to the
Intercompany Loan Agreement to read as follows:
"Refinery Assets" shall mean substantially all of the
assets of TARC immediately prior to the Transaction Closing
Date.
(p) The definition of "Related Person" is hereby amended to read as
follows:
"Related Person" shall mean (i) any Person (other
than a Purchaser) directly or indirectly controlling or
controlled by or under direct or indirect common control with
the Borrower or any Subsidiary of the Borrower or any officer,
director, or employee of the Borrower or any Subsidiary of the
Borrower or of such Person, (ii) the spouse, any immediate
family member, or any other relative who has the same
principal residence of any Person described in clause (i)
above, and any Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with,
such spouse, family member, or other relative, and (iii) any
trust in which any Person described in clause (i) or (ii),
above, is a fiduciary or has a beneficial interest. For
purposes of this definition the term "control" means (a) the
power to direct the management and policies of a Person,
directly or through one or more intermediaries, whether
through the ownership of voting securities, by contract, or
otherwise, or (b) the beneficial ownership of 10% or more of
the voting common equity of such Person (on a fully diluted
basis) or of warrants or other rights to acquire such equity
(whether or not presently exercisable).
(q) The definition of "Restricted Payment" is hereby amended to read as
follows:
"Restricted Payment" shall mean, with respect to any
Person, (i) any Restricted Investment, (ii) any dividend or
other distribution on shares of Capital Stock of such Person
or any Subsidiary of such Person, (iii) any payment on account
of the purchase, redemption, or other acquisition or
retirement for value of any shares of Capital Stock of such
Person, and (iv) any defeasance, redemption, repurchase, or
other acquisition or retirement for value, or any payment in
respect of any amendment in anticipation of or in connection
with any such retirement, acquisition, or defeasance, in whole
or in part, of any Subordinated Debt, directly or indirectly,
or such Person or a Subsidiary of such Person prior to the
scheduled maturity or prior to any scheduled repayment of
principal in respect of such Subordinated Debt; provided,
however, that the term "Restricted Payment" does not include
(i) any dividend, distribution, or other payment on shares of
Capital Stock of an issuer solely in shares of Qualified
Capital Stock of such issuer that is at least as junior in
ranking as the Capital Stock on which such dividend,
distribution, or other payment is to be made, (ii) any
dividend, distribution, or other payment to the Borrower from
any of its Subsidiaries, (iii) any defeasance, redemption,
repurchase, or other acquisition or retirement for value, in
whole or in part, of any Subordinated Debt of such Person
payable solely in shares of Qualified Capital Stock of such
Person, (iv) any payments or
6
8
distributions made pursuant to and in accordance with the
Transfer Agreement, the Services Agreement, the Office Leases
or the Tax Allocation Agreement, or (v) any dividend,
distribution or other payment to TARC by the Borrower or to
the Borrower by any of its Subsidiaries, (vi) any Permitted
Prepayment, (vii) any redemption, repurchase or other
retirement for value of the TARC Warrants by the Lender or the
Borrower, including any premium paid thereon, (viii) any
redemption, defeasance, repurchase or other retirement for
value of the Senior TARC Mortgage Notes by the Borrower,
including any premium paid thereon, (ix) any redemption,
defeasance, repurchase or other retirement for value of the
Senior TARC Discount Notes by the Lender or the Borrower,
including any premium paid thereon, (x) 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 Section
4.11(2)(q), (2)(u), (2)(w) or Section 4.11(4)(j), (4)(w) or
(4)(z) of the Indenture, (xi) the purchasing by the Borrower
of shares of the Capital Stock of TransTexas or itself or
TransContinental in connection with its employee benefit plan,
including without limitation any employee stock ownership plan
or any employee stock option plan in an aggregate amount, with
respect to the issuer, not to exceed 7% of the aggregate
number of shares of the voting stock held by non-affiliates of
the issuer measured from the date of the first such
purchase,(xii) any repayment or retirement for value by the
Borrower of any loan from the Lender incurred pursuant to
Sections 4.11(2)(o), 4.11(2)(p), 4.11(4)(s) or 4.11(4)(t) of
the Indenture, (xiii) any purchase of Capital Stock of
TransContinental, (xiv) repayments by TCR Holding of its
promissory note in the principal amount of $200,000,000 to
TARC as part of a contemporaneous exchange of subordinated
notes of TCR Holding, and (xv) any distribution, dividend or
payment on shares of Capital Stock of TCR Holding (x) the
proceeds of which are used to purchase Notes or (y) that are
exchanged for Notes.
(r) The definition of "Subsidiary" is hereby amended to read as
follows:
"Subsidiary" with respect to any Person, shall mean
(i) a corporation with respect to which such Person or such
Person and its Subsidiaries own, directly or indirectly, at
least fifty percent of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the
time, directly or indirectly, owned by such Person, by such
Person and one or more Subsidiaries of such Person or by one
or more Subsidiaries of such Person, 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 Person; provided, however, that
"Subsidiary" shall not include (i) any Unrestricted Subsidiary
of such Person, except for purposes of Section 4.10 of the
Indenture, (ii) an Accounts Receivable Subsidiary or (iii)
with respect to the Borrower, TransContinental.
(s) A definition of "TARC" is hereby added to the Intercompany Loan
Agreement to read in its entirety as follows:
7
9
"TARC" shall mean TransAmerican Refining Corporation,
a Texas corporation.
(t) A definition of "TCR Holding Pledge Agreement" is hereby added to
the Intercompany Loan Agreement to read in its entirety as follows:
"TCR Holding Pledge Agreement" shall mean a pledge
agreement executed by TCR Holding in favor of TEC pledging all
of the common stock of TransContinental owned by TCR Holding
immediately following consummation of the Transaction as
security for the obligations of TCR Holding under the TARC
Working Capital Loan.
(u) A definition of "TransContinental" is hereby added to the
Intercompany Loan Agreement to read in its entirety as follows:
"TransContinental" shall mean 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 of the
Indenture, its Subsidiaries.
(v) A definition of "TCR Holding" is hereby added to the Intercompany
Loan Agreement to read in its entirety as follows:
"TCR Holding" shall mean TCR Holding Corporation, a
Delaware corporation, to which the Refinery Assets will be
transferred by TARC pursuant to the Transaction.
(w) The definition of "TARC Security Documents" is hereby amended to
read as follows:
"TARC Security Documents" shall mean this Loan
Agreement, the Disbursement Agreement, the TCR Holding Pledge
Agreement and each other agreement relating to the pledge of
assets to secure the Notes and any guarantee of the
obligations of the Borrower under the Note by any guarantor
that may be entered into after the date of the Note, pursuant
to the terms of the Note in each case, as amended from time to
time.
(x) A definition of "TARC Working Capital Loan" is hereby added to the
Intercompany Loan Agreement to read in its entirety as follows:
"TARC Working Capital Loan" shall mean any loan by
the Borrower to the Lender (other than the Loan).
(y) A definition of "TEC Discount Notes" is hereby added to the
Intercompany Loan Agreement to read in its entirety as follows:
"TEC Discount Notes" shall mean those certain 13%
Senior Secured Discount Notes due 2002 in the aggregate
principal amount of $1,130,000,000 issued by the Lender.
(z) The definition of "TEC Notes" is hereby amended to read as follows:
"TEC Notes" shall mean the TEC Senior Notes and the
TEC Discount Notes.
8
10
(aa) A definition of "TEC Senior Notes" is hereby added to the
Intercompany Loan Agreement to read in its entirety as follows:
"TEC Senior Notes" shall mean those certain 11 1/2%
Senior Secured Notes due 2002 in the aggregate principal
amount of $475,000,000 issued by the Lender.
(bb) A definition of "Transaction" is hereby added to the Intercompany
Loan Agreement 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 September 30, 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
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.
(cc) A definition of "Transaction Closing Date" is hereby added to the
Intercompany Loan Agreement to read in its entirety as follows:
"Transaction Closing Date" shall mean the date the
Refinery Assets are transferred by TARC to TCR Holding and by
TCR Holding to TransContinental pursuant to the Transaction.
(dd) A definition of "TransTexas Intercompany Loan" is hereby added to
the Intercompany Loan Agreement to read in its entirety as follows:
"TransTexas Intercompany Loan" means the senior
secured promissory note from TransTexas to the Company in the
principal amount of $450,000,000.
Section 1.03. Section 2.3 of the TARC Intercompany Loan Agreement.
Section 2.3(b) of the TARC Intercompany Loan Agreement is hereby amended as
follows:
(b) Borrower shall pay interest on the unpaid
principal amount of the Loan at a rate per anum equal to the
lesser of (i) sixteen percent (16%), and (ii) the Highest
Lawful Rate, until such principal amount shall be paid in
full, at the times and according to the terms and conditions
set forth in the Note, provided, however, that any amount of
principal which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest,
from the date on which such amount is due until such amount is
paid in full,
9
11
payable on demand at a rate per annum equal at all times to
the lesser of (i) the Default Rate and (ii) the Highest Lawful
Rate.
Section 1.04. Section 2.4 of the TARC Intercompany Loan Agreement.
Section 2.4 of the TARC Intercompany Loan Agreement is hereby amended to add a
new sentence at the end thereof to read as follows:
Notwithstanding anything to the contrary herein, the
Borrower may repay the principal of the Loan by surrender to
the Lender of TEC Senior Notes or TEC Discount Notes. The
principal amount of the Loan shall be reduced upon such
surrender in an amount calculated pursuant to Section 3.1
hereof.
Section 1.05. Section 3.1 of the TARC Intercompany Loan Agreement.
Section 3.1 of the TARC Intercompany Loan Agreement is hereby deleted in its
entirety and replaced with a new Section 3.1 to read in its entirety as follows:
Section 3.1 Deemed Prepayments. Upon receipt by the
Lender of any Excess Cash (as defined in the indenture
governing the TEC Notes, as in effect on the Transaction
Closing Date), including upon any prepayment of the TransTexas
Intercompany Loan, the Lender shall be obligated to use
commercially reasonable efforts to apply, within 90 days after
such receipt, an amount equal to such prepayment to purchase
TEC Notes in whatever established market then exists therefor
or in privately negotiated transactions, at prices less than
100% of the principal amount of the TEC Senior Notes purchased
or 100% of the accreted value of the TEC Discount Notes
purchased, as the case may be, in each case before adding
accrued but unpaid interest. Upon any repurchase or retirement
of TEC Notes by the Lender, or purchase of TEC Notes by any
Subsidiary of the Lender other than the Borrower or
TransTexas, or surrender of TEC Notes by or on behalf of the
Borrower or by TransTexas in payment of their respective
obligations to the Lender, the principal amount of the Loan
shall automatically be reduced by an amount equal to the
quotient of (i) the difference between (x) the TARC
Contribution immediately prior to such adjustment and (y) the
Needed TARC Contribution on the date of such repurchase,
retirement or surrender divided by (ii) the product of (x) the
annual interest rate of the Loan multiplied by (y) the years
to maturity of the Loan from the later of such date and June
15, 1999.
"TARC Contribution" means as of any date the sum of
(i) the product of (x) the principal amount of each TARC
Working Capital Loan on such date multiplied by (y) the years
to maturity of such TARC Working Capital Loan from such date
multiplied by (z) the annual interest rate of such TARC
Working Capital Loan on such date plus (ii) the product of (x)
the principal amount of the Loan on such date multiplied by
(y) the years to maturity of the Loan from the later of such
date and June 15, 1999 multiplied by (z) the annual interest
rate of the Loan on such date.
"Needed TARC Contribution" means as of any date the
amount equal to the difference between (i) the TEC Interest
Obligation on such date minus (ii) the TransTexas Contribution
on such date and minus (iii) cash or Cash Equivalents of TEC
available to pay cash interest on the TEC Notes.
10
12
"TEC Interest Obligation" means as of any date the
sum of (i) the product of (x) the principal amount of the TEC
Senior Notes on such date, after giving effect to each
repurchase or retirement of TEC Notes by the Lender, purchase
of TEC Notes by any Subsidiary of Lender other than Borrower
or TransTexas and surrender of TEC Notes to the Lender by or
on behalf of Borrower or TransTexas (assuming, in each case,
that such TEC Notes are no longer outstanding), multiplied by
(y) the years to maturity on such date of the TEC Senior Notes
multiplied by (z) the annual interest rate of the TEC Senior
Notes on such date or the Transaction Closing Date, whichever
is less, plus (ii) the product of (x) the principal amount of
the TEC Discount Notes on such date, after giving effect to
such repurchase, retirement, purchase or surrender (assuming,
in each case, that such TEC Notes are no longer outstanding),
multiplied by (y) the years to maturity of the TEC Discount
Notes from the later of such date and June 15, 1999 multiplied
by (z) the annual interest rate on such date or the
Transaction Closing Date, whichever is less.
"TransTexas Contribution" means as of any date the
sum of (i) the product of (x) the principal amount of each
TransTexas Working Capital Loan on the Transaction Closing
Date reduced by any prepayments of principal thereof in
accordance with its terms as in effect on the Transaction
Closing Date multiplied by (y) the years to maturity of such
TransTexas Working Capital Loan from such date multiplied by
(z) the annual interest rate of such TransTexas Working
Capital Loan on such date or the Transaction Closing Date,
whichever is greater, plus (ii) the product of (x) the
principal amount of the TransTexas Intercompany Loan on the
Transaction Closing Date reduced by any prepayments of
principal thereof in accordance with its terms as in effect on
the Transaction Closing Date multiplied by (y) the years to
maturity from such date of the TransTexas Intercompany Loan
multiplied by (z) the annual interest rate of the TransTexas
Intercompany Loan on such date or the Transaction Closing
Date, whichever is greater.
"TransTexas Working Capital Loan" means any
intercompany loan between TransTexas and the Company (other
than the TransTexas Intercompany Loan).
The Lender shall give Borrower notice of each
reduction in the principal amount due under the Loan pursuant
to this Section 3.1 and shall provide a calculation of such
reduction, in reasonable detail.
Section 1.06. Section 3.2 of the TARC Intercompany Loan Agreement.
Section 3.2 of the TARC Intercompany Loan Agreement is hereby amended to read as
follows:
Section 3.2 Permitted Prepayments. The Borrower may
at any time make a prepayment of all or a portion of the
principal amount of the Note then outstanding (a "Permitted
Prepayment") at a prepayment price equal to the Accreted Value
of the portion of the outstanding principal amount of the Note
to be prepaid together with accrued and unpaid interest, if
any, to and including the date of such Permitted Prepayment.
Section 1.07. Section 7.3 of the TARC Intercompany Loan Agreement.
Section 7.3 of the TARC Intercompany Loan Agreement is hereby amended to read as
follows:
11
13
Section 7.3 Covenants Incorporated by Reference. The
Borrower shall, and shall cause each of its Subsidiaries to,
comply with each covenant applicable to the Borrower or its
Subsidiaries, as described in the Indenture (as the Indenture
exists on the Transaction Closing Date) as if made by the
Borrower as of the date hereof.
Section 1.08. Section 7.4 of the TARC Intercompany Loan Agreement. A
new Section 7.4 of the TARC Intercompany Loan Agreement is hereby added to read
as follows:
Section 7.4 Covenants of Lender. Until repayment in
full of the TEC Notes, the Lender shall comply with its
obligations under Section 4.21 of the Indenture and shall use
commercially reasonable efforts to apply all remaining Excess
Cash, except as provided in the following sentence, to effect
repurchases of TEC Notes at prices less than the face amounts
thereof. The Lender shall not be prohibited by this Section
7.4 from (i) retaining cash after making an Excess Cash Offer
pursuant to the terms of the Indenture in an amount sufficient
to pay interest on the TEC Notes which remain outstanding
after giving effect to purchases of Notes pursuant to such
Excess Cash Offer and (ii) retaining any amounts remaining
after compliance with Section 4.21 of the Indenture and making
the efforts required hereby with respect to remaining Excess
Cash, until such remaining amounts are loaned to TCR Holding
or TransContinental as an intercompany loan. The Lender shall
not, and shall not permit any of its Subsidiaries (other than
Borrower and any of its Subsidiaries) to, purchase any 16%
Senior Subordinated Notes due 2003 of TARC (or notes of TCR
Holding issued in exchange for such notes pursuant to the TCR
Holding exchange offer that is part of the Transaction).
Section 1.09. Section 8.1 of the TARC Intercompany Loan Agreement.
(a) Section 8.1(d) of the TARC Intercompany Loan Agreement is hereby
amended to read as follows:
(d) a default which extends beyond any stated period
of grace applicable thereto, including any extension thereof,
under (i)(x) the Reimbursement and Credit Facility or (y) any
mortgage, indenture or instrument under which there is
outstanding any Debt of the Borrower or any of its
Subsidiaries with an aggregate principal amount in excess of
$25 million 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, in either case, failure to pay
such Debt at its stated maturity, provided that a waiver of
such default by the requisite lenders under such mortgage,
indenture or instrument shall constitute a waiver hereunder
for the same period or (ii) the Bridge Loan Notes or failure
to pay such Debt when due;
(b) Section 8.1(h) of the TARC Intercompany Loan Agreement is hereby
amended to read as follows:
(h) except as caused by the consummation of the
Transaction (including, without limitation, the release of the
liens on the Refinery Assets granted pursuant to the TARC
Security Documents), any of the TARC Security Documents shall
for any reason cease to be in full force and effect (except
where no material adverse effect to the Lenders would
12
14
result), or shall cease to give the Lenders the Liens, rights,
powers and privileges purported to be created thereby
including but not limited to, a perfected security interest
in, and Lien on, the Collateral in accordance with the terms
thereof, except where the failure to have such Lien, rights,
powers and privileges shall not have a material adverse effect
on the Lender;
Section 1.10. Section 8.2 of the TARC Intercompany Loan Agreement.
Section 8.2(a) of the TARC Intercompany Loan Agreement is hereby amended to read
as follows:
(a) If an Event of Default occurs and is continuing
(other than an Event of Default specified in Section 8.1(e) or
(f) above, relating to the Borrower or its Subsidiaries), then
in every such case, unless the principal of the Note shall
have already become due and payable, either the Indenture
Trustee or the Lender, by notice in writing to the Borrower
(and to the Indenture Trustee if given by the Lender) (an
"Acceleration Notice"), may declare the Accreted Value of the
outstanding principal amount of the Note and accrued and
unpaid interest thereon or, as appropriate, any prepayment
under 3.1(a) to be due and payable immediately. If an Event of
Default specified in Section 8.1(e) or (f) above occurs
relating to the Borrower or its Subsidiaries, all principal
and accrued and unpaid interest thereon will be immediately
due and payable on the Note without any declaration or other
act on the part of the Indenture Trustee or the Lender. The
Indenture Trustee generally is authorized to rescind such
acceleration if all existing Events of Default, other than the
non-payment of the principal and interest on the Note which
has become due solely by such acceleration, have been cured or
waived.
Section 1.11. Section 9.3 of the TARC Intercompany Loan Agreement.
Section 9.3 of the TARC Intercompany Loan Agreement is hereby amended to read as
follows:
Section 9.3 Notices. Any notices or other
communications to the Borrower, the Lender or the Indenture
Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Company:
TransAmerican Refining Corporation
1300 North Sam Houston Parkway East
Suite 320
Houston, Texas 77032
Attention: Ed Donahue
Vice President
and to:
Trust Company of the West
11100 Santa Monica Blvd.
20th Floor
Los Angeles, California 90025
13
15
Attention: Re: TransAmerican Refining
if to the Lender:
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East
Suite 200
Houston, Texas 77032
Attention: Ed Donahue
Vice President
if to the Indenture Trustee:
Firstar Bank of Minnesota, N.A.
Corporate Trust Department
101 East Fifth Street, 12th Floor
St. Paul, Minnesota 55101-1860
Attention: Frank Leslie
The Borrower, the Lender or the Indenture Trustee by
notice to each other party may designate additional or
different addresses as shall be furnished in writing by such
party. Any notice or communication to the Borrower, the Lender
or the Indenture Trustee shall be deemed to have been given or
made as of the date so delivered, if personally delivered;
when answered back, if telexed; when receipt is acknowledged,
if telecopied; and five Business Days after mailing if sent by
registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been
given until actually received by the addressee).
Section 1.12. Section 9.11 of the TARC Intercompany Loan Agreement.
Section 9.11 of the TARC Intercompany Loan Agreement is hereby added to read as
follows:
Section 9.11 Release. The Collateral, in whole or in
part, may be released in accordance with the Indenture (as the
Indenture exists on the Transaction Closing Date). Each of the
Lender and the Borrower hereby acknowledges and consents to
the release of Collateral by the Indenture Trustee, as the
Lender's agent, pursuant to the terms of the Indenture.
Section 1.13. Section 9.12 of the TARC Intercompany Loan Agreement.
Section 9.12 of the TARC Intercompany Loan Agreement is hereby amended to read
as follows:
Section 9.12 Agreement. The term "Agreement," as used
in the Loan Agreement, and the terms "TARC Intercompany Loan
Agreement" and "Loan Agreement," as used in the other Loan
Documents, each shall mean and refer to the Loan Agreement, as
amended, modified, supplemented, restated, renewed, and/or
extended from time to time.
Section 1.14. Section 9.15 of the TARC Intercompany Loan Agreement. A
new Section 9.15 of the TARC Intercompany Loan Agreement is hereby added to read
as follows:
14
16
Section 9.15 Amendments. This Agreement or any term
hereof may be amended or changed only by an instrument in
writing executed jointly by the Borrower and the Lender and in
accordance with Article IX of the Indenture.
Section 1.15. Amendment to First Paragraph of Section 1 of Back of
Note. The first paragraph of Section 1 of the back of the TARC Intercompany Note
shall be amended to read as follows:
1. Interest.
TransAmerican Refining Corporation, a Texas
corporation (the "Company"), promises to pay interest on the
principal amount of this Note at a rate of 16% per annum. To
the extent it is lawful, the Company promises to pay interest
on any interest payment due but unpaid on such principal
amount at the Default Rate.
ARTICLE II
MISCELLANEOUS
Section 2.01. Ratification and Confirmation. As amended and modified by
this Third Amendment, the terms and provisions of the TARC Intercompany Loan
Agreement are hereby ratified and confirmed and shall continue in full force and
effect.
Section 2.02. Reference to TARC Intercompany Loan Agreement. The TARC
Intercompany Loan Agreement, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms of the
TARC Intercompany Loan Agreement, are hereby amended so that any reference
therein to the TARC Intercompany Loan Agreement shall mean a reference to the
TARC Intercompany Loan Agreement as amended hereby.
Section 2.03. Counterparts. This Third Amendment may be executed in one
or more counterparts, each of which when executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 2.04. Headings. The headings, captions and arrangements used in
this Third Amendment are for convenience only and shall not affect the
interpretation of this Third Amendment.
Section 2.05. Governing Law. THIS THIRD AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 2.06. Effectiveness of Amendments. This Third Amendment is
effective as of the date first above written. However, the provisions of the
TARC Intercompany Loan Agreement amended or eliminated as provided in this Third
Amendment (the "Amended Provisions") shall remain operative in the form in which
they exist in the TARC Intercompany Loan Agreement 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.
15
17
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed as of the date of first written above.
TRANSAMERICAN REFINING CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
TRANSAMERICAN ENERGY CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
16