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EXHIBIT 10.1
POST-PETITION AMENDMENT NO. 1 TO FINANCING AGREEMENT
THIS POST-PETITION AMENDMENT NO. 1 TO SECOND AMENDED ACCOUNTS
RECEIVABLE MANAGEMENT AND SECURITY AGREEMENT MADE AS OF OCTOBER 14, 1997, AS
AMENDED ("Amendment") dated as of April 19, 1999 by and between TRANSTEXAS GAS
CORPORATION, as Debtor and Debtor-in-Possession ("Borrower"), having its
principal place of business at 1300 North Sam Houston Parkway East, Suite 310,
Houston, Texas 77032-2949, and BNY FINANCIAL CORPORATION ("BNYFC"), having
offices at 1290 Avenue of the Americas, New York, New York 10104.
Borrower and BNYFC are parties to the Second Amended Accounts
Receivable Management and Security Agreement made as of October 14, 1997, as
amended by letter agreements dated October 21, 1997, April 21, 1998, June 2,
1998, July 13, 1998, October 1, 1998 and December 14, 1998 (collectively, the
"Financing Agreement"), pursuant to which, among other things, BNYFC made
loans, advances and/or other financial accommodations to Borrower.
On April 19, 1999 (the "Petition Date"), Borrower filed a
voluntary petition for reorganization pursuant to Chapter 11 of Title 11,
United States Code with the United States Bankruptcy Court for the District of
Delaware. On May 20, 1999, the Delaware Court transferred venue of the Debtor's
chapter 11 proceeding to the United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division. As of April 19, 1999, Borrower
acknowledges indebtedness to BNYFC under the Financing Agreement in the
approximate aggregate principal sum of $4,352,327.89, consisting of (a) loans
and advances and related interest and fees of $382,274.98; and (b) contractual
termination fees of $800,000.00 subject to Termination Fee Rights Reservation
(as defined in the Court Order); (c) contingent letter of credit obligations of
$2,881,866.28.
NOW, THEREFORE, in consideration of any loan or advance or grant
of credit heretofore or hereafter made to or for the account of Borrower by
BNYFC, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. All capitalized terms not otherwise defined herein shall have
the meanings given to them (a) in the interim and/or final order of the
Bankruptcy Court, in form and substance acceptable to BNYFC in its sole and
absolute discretion, as the same may be amended, modified or supplemented from
time to time with the express written consent of BNYFC, authorizing Borrower to
enter into this Amendment, among other things (the "Court Order"), or (b) to
the extent not defined therein, in the Financing Agreement.
2. The following defined terms of the Financing Agreement are
amended and restated in their entirety to provide as follows:
(a) "Maximum Loan Amount" at any time means $10,000,000.
(b) "Term" means the Closing Date through October 20, 1999
subject to acceleration upon the occurrence of an Event of Default
hereunder or other termination hereunder.
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(c) "Inventory Availability" means the amount of Revolving Credit
Advances against Eligible Inventory Lender may from time to time in its
sole and absolute discretion during the Term make available to Borrower
up to the lesser of (a) $1,000,000 or (b) 40% ("Inventory Advance Rate")
of the value of the Eligible Inventory (calculated on the basis of the
lower of cost or market, on a first-in first-out basis).
(d) "Receivable Availability" means 85% ("Receivables Advance
Rate") of the face amount of Eligible Receivables provided that in
calculating Receivables Availability there shall be deducted from the
face amount of Eligible Receivables an amount equal to the greater of
(a) with respect to Eligible Receivables arising from the sale of
Hydrocarbons, 38% of the face amount of such Eligible Receivables and
(b) such other and further reserves as Lender deems appropriate in its
sole and absolute discretion in connection with any material claim
asserted or threatened against Lender or of which Lender becomes aware
of material facts leading Lender to reasonably believe that an action or
claim may be asserted against Lender arising out of or relating to the
Financing Arrangement, including but not limited to, amounts which
lessors, royalty holders, working interest holders and other Persons
would be entitled to assert are secured by a UCC 9.319 Lien on the
Receivables or proceeds thereof, whether or not such lessors, royalty
holders, working interest holders or Persons, or any of them, have
asserted or claimed any such UCC 9.319 Lien; provided however, in no
event shall Receivables Availability arising from the sale of
Hydrocarbon exceed 50% (before any deduction) of the face amount of the
Eligible Receivables.
3. The following defined terms shall be added to the Financing
Agreement:
(a) "Chapter 11 Proceeding" means that proceeding under Chapter
11, title 11 of the United States Code commenced by the filing of a
voluntary petition thereunder by Borrower in the United States
Bankruptcy Court for the District of Delaware on April 19, 1999, as
presently pending in the United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division.
(b) "Court Order" means the interim and/or final order of the
Bankruptcy Court, in form and substance acceptable to Lender in its sole
and absolute discretion, as the same may be amended, modified or
supplemented from time to time with the express written consent of
Lender, authorizing Borrower, inter alia, to enter into a post-petition
financing arrangement with Lender.
4. The definition of "Permitted Liens" shall be amended to delete
the period [.] at the conclusion thereof and insert the following:
; (l) Liens granted pursuant to the CSFB Financing Order (as
defined in the Court Order) and the Court Order.
5. Paragraph "5(b)(ii)" of the Financing Agreement is amended and
restated in its entirety to provide as follows:
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(b) (ii) Unused Line Fee. In the event the average of the sum of
closing daily unpaid balances of all Revolving Credit Advances hereunder
plus, without duplication, outstanding Letter of Credit Liabilities
during any calendar month is less than the Maximum Loan Amount, Borrower
shall pay to Lender a fee at a rate per annum equal to 1/2 of one
percent (0.500%) on the amount by which the Maximum Loan Amount exceeds
such average sum. Such fee shall be calculated on the basis of a year of
360 days and actual days elapsed, and shall be charged to Borrower's
account on the first day of each month with respect to the prior month.
6. Upon approval of the Financing Arrangement by the Court,
Borrower shall pay to BNYFC a closing fee in an amount equal to $200,000.
7. Paragraph "2(c)" of the Financing Agreement is amended and
restated in its entirety to provide as follows:
(c) Subject to the terms and conditions set forth herein and in
the Ancillary Agreements, Lender shall make revolving credit advances
(the "Revolving Credit Advances") to Borrower from time to time during
the Term which, in the aggregate at any time outstanding together
(without duplication) with the aggregate then outstanding Letter of
Credit Liabilities, will not exceed the lesser of (x) the Maximum Loan
Amount or (y) an amount equal to the difference of:
(i) Receivables Availability plus Inventory
Availability, minus
(ii) such reserves as Lender may in its sole and
absolute discretion deem proper and necessary from
time to time.
The difference of the foregoing (i) minus (ii) shall be referred
to as the "Formula Amount". To the extent Lender receives
proceeds of any Receivable which proceeds are not necessary to
maintain outstanding Obligations within the Formula Amount (after
giving effect to the application of such proceeds to the Formula
Amount), Lender agrees to advance such funds to the Borrower.
Notwithstanding the foregoing provisions of this Paragraph, prior
to remittance by Lender to Borrower of any Revolving Credit
Advances, Lender shall be entitled to segregate an amount equal
to: [a] the aggregate claims of each alleged O&G Lienor (as
defined in the Court Order) asserting a right to adequate
protection under the O&G Lienor Adequate Protection Provision (as
defined in the Court Order) such claims being herein defined as
the "O&G Lienor Claims"; [b] any severance or other similar tax
due in connection with any Receivables received by Lender; such
segregated funds to be released for payment of such O&G Lienor
Claims or tax or upon demonstration to Lender's sole and absolute
satisfaction that provision for payment of such O&G Lienor Claims
or tax has otherwise been made.
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8. Paragraph 13(d) of the Financing Agreement shall be amended to
add the following sentence at the end of such paragraph:
The limitations on Incurrences contained herein shall apply only
to Incurrences after April 19, 1999, and shall not apply to any
Incurrence permitted under the CSFB Financing Order.
9. Paragraph 13(l) of the Financing Agreement shall be amended
and restated in its entirety so as to provide as follows:
(A) The Borrower will not permit the Consolidated EBITDA
(i) at the end of any month to be less than $2,500,000;
and (ii) on a three month rolling average basis
(calculated as of the end of any month) to be less than
$5,000,000; and
(B) The Borrower will not permit Obligations to exceed the
Formula Amount unless Lender agrees to permit an
Overadvance.
For the purposes of determining Consolidated EBITDA and
for the purpose of Section 13(l)(A), Consolidated Net
Income and Consolidated Interest Expense shall exclude any
interest accrued (but not then due and payable) on
intercompany payables for taxes to the extent the
liability for such taxes has been assumed by TransAmerican
pursuant to the Tax Allocation Agreement.
10. It shall be a condition precedent to BNYFC's discretionary
right to make loans, advances, overadvances and/or other financial
accommodations to Borrower under the Financing Arrangement that BNYFC shall
receive a reaffirmation of guaranty from John R. Stanley.
11. Subject to the Termination Fee Rights Reservation, Borrower
hereby represents and warrants as follows:
(a) Subject to entry of the Court Order, this Amendment
and the Financing Agreement, as amended hereby, constitute legal,
valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower
hereby reaffirms all covenants, representations and warranties
made in the Financing Agreement and all other documents,
instruments and agreements executed and/or delivered in
connection therewith, except to the extent that covenants,
representations and warranties have been breached (i) by reason
of the commencement of Chapter 11 Proceeding, or (ii) by
Borrower's insolvency or (iii) by Borrower's pre-petition
financial condition (but not as to any change in financial
condition occurring subsequent to the Petition Date) or (iv) by
Borrower's failure to pay pre-petition liabilities, and any such
breach shall not constitute an Incipient Event of Default nor an
Event of Default. Lender hereby waives any Event of Default or
Incipient Event of Default that has occurred or may occur under
paragraph 19(c) or 19(o) of the Financing Agreement to the extent
such Event of Default or
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Incipient Event of Default is based upon a default by Borrower
under a third party agreement, provided that any remedies
available to such third party are stayed by the Chapter 11
Proceeding. Borrower further agrees that all such covenants,
representations and warranties as amended hereby (including
without limitation, clauses (i), (ii), (iii) and (iv) of this
subparagraph) shall be deemed to have been remade and shall
continue in full force and effect after the Petition Date;
provided however, to the extent breach of any covenant,
representation or warranty whether occurring either before or
after the Petition Date results in any liability to Lender,
Lender shall not be deemed to have waived such breach, including
without limitation the specific provisions of Paragraph 2(f)
hereof, and Lender specifically herein reserves all such rights.
(c) Borrower has no defense, counterclaim or offset with
respect to the Financing Agreement.
12. Upon the effectiveness of this Amendment, each reference in
the Financing Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Financing Agreement
as amended hereby. Except as specifically amended herein, the Financing
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed. The execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any right, power or remedy of
BNYFC, nor constitute a waiver of any provision of the Financing Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.
13. This Amendment shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and shall be
governed by and construed in accordance with the laws of the State of New York.
14. This Agreement may be executed in any number of and by
different parties hereto on separate counterparts, all of which, when so
executed shall be deemed an original, but all such counterparts shall
constitute one and the same instrument. Any signature delivered by a party by
facsimile transmission shall be deemed an original signature hereto.
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the day and year first written above.
BNY FINANCIAL CORPORATION
By: /s/
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Name:
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Title:
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TRANSTEXAS GAS CORPORATION.,
as Debtor and Debtor-in-Possession
By: /s/
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Name:
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Title:
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