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EXHIBIT 10.62
SECOND SUPPLEMENT TO PRODUCTION
PAYMENT CONVEYANCE
THIS SECOND SUPPLEMENT TO PRODUCTION PAYMENT CONVEYANCE (this
"Supplement"), dated as of the date set out at the end hereof, is made by
TransTexas Gas Corporation, a Delaware corporation ("Grantor"), Southern
Producer Services, L.P. ("SPS"), TCW Portfolio No. 1555 DR V Sub-Custody
Partnership, L.P. ("Fund V"), and TCW DR VI Investment Partnership, L.P. ("Fund
VI"). SPS, Fund V and Fund VI are herein collectively called "Grantee".
RECITALS:
A. Effective as of March 1, 2000, Grantor executed in favor of Grantee
that certain Production Payment Conveyance dated as of March 14, 2000
(as heretofore amended, the "Original Conveyance"), which Original
Conveyance (including previous supplements thereto) has been recorded
as set forth in Schedule 1 hereto.
B. Pursuant to the First Supplement to Production Payment Conveyance
listed on Schedule 1 hereto, Grantee and Grantor added the amount of
$8,000,000 to the unliquidated balance of the Primary Sum under the
Original Conveyance. Grantee and Grantor now desire to further
supplement and amend the Original Conveyance in order make additional
properties subject thereto and to account for the payment by SPS of
additional funds to Grantor.
C. As described in Section 8.7 of the Original Conveyance, and pursuant to
the Purchase Agreement referred to in the Original Conveyance, Fund V
and Fund VI have appointed TCW Asset Management Company to act as their
agent in connection with supplements and amendments to the Original
Conveyance.
SUPPLEMENTS AND AGREEMENTS:
FOR A GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, Grantor and Grantee do hereby agree, act and
covenant as follows:
1. All capitalized terms used but not defined herein shall have the
meanings assigned to them in the Original Conveyance.
2. Effective as of 9:00 a.m. Houston, Texas time, on September 8, 2000
(the "Effective Time"), the Original Conveyance is amended in order to add the
amount of Ten Million Dollars ($10,000,000) to the unliquidated balance of the
Primary Sum, as such unliquidated balance stood as of the Effective Time after
giving effect to all applications of PP Proceeds made before the Effective Time.
After giving effect to such amendment (and to such application of PP Proceeds),
the unliquidated balance of the Primary Sum as of the Effective Time is
$32,446,634. (Any PP Proceeds received after the Effective Time on September 8,
2000 shall be deemed to have been received on the next following Business Day.)
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3. Exhibit A to the Original Conveyance is hereby amended and
supplemented, effective as of the Effective Time, to include at the end thereof
Exhibit A hereto (herein called "Additional Exhibit A").
4. The terms "NRI Percentage," "PP Hydrocarbons," "Subject
Hydrocarbons," "Subject Interests," "Subject Lands," and "Subject Wells," as
such terms are defined and used in the Original Conveyance, are hereby amended,
effective as of the Effective Time, in order to take into account and recognize
the addition of Additional Exhibit A hereto to the end of Exhibit A as attached
to the Original Conveyance, and all other direct or indirect references in the
Original Conveyance shall likewise be considered amended in order to take into
account and recognize such amendment and the addition of Additional Exhibit A
hereto to the end of Exhibit A as attached to the Original Conveyance.
5. For the above-recited consideration, Grantor does hereby, in order
to more fully effectuate the amendments and other provisions herein contained,
GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, SET OVER and DELIVER unto
Grantee, as a production payment, to be held in undivided interests in
proportion to their Percentage Shares, a term overriding royalty interest carved
out of and burdening the Subject Interests (including the "Additional Subject
Interests," as defined below) equal to and measured by all "Additional PP
Hydrocarbons," as defined below, in, under and that may be produced from (or, to
the extent pooled or unitized, allocated to) the Subject Lands (including the
"Additional Subject Lands," as defined below), with such production payment to
be effective as to deliveries of Additional PP Hydrocarbons as of the Effective
Time, and to terminate as of the Termination Time.
TO HAVE AND TO HOLD the above-described production payment, upon and
subject to the terms of the Original Conveyance, as amended hereby, unto
Grantee, and its successors and Permitted Assigns, until the Termination Time.
As used herein, the following terms have the following meanings:
(a) "Additional PP Hydrocarbons" means the Dedication Percentage
of the NRI Percentage (as the definitions of such terms are
amended herein) of:
(i) all Hydrocarbons in, under or that may be produced
from (or, to the extent pooled or unitized, allocated
to) any Additional Subject Lands prior to the
Termination Time (as determined after giving effect
to this Supplement), and
(ii) all other Hydrocarbons in, under or that may be
produced from (or, to the extent pooled or unitized,
allocated to) the Subject Lands prior to the
Termination Time, as determined after giving effect
to this Supplement and the instrument listed as item
2 on Schedule 1 hereto (this Supplement and such
other instruments being herein collectively called
the "Supplements"), to the extent such Hydrocarbons
are included within the PP Hydrocarbons as a result
of the Termination Time being changed because of the
Supplements.
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(b) "Additional Subject Interests" means:
(i) All of the leasehold interests and other property
interests described in Additional Exhibit A; and
(ii) Without limitation of the foregoing, all other right,
title and interest (of whatever kind or character,
whether legal or equitable and whether vested or
contingent) of Grantor in and to the oil, gas and
other minerals in and under or that may be produced
from the Additional Subject Lands (including
interests in oil, gas or mineral leases to the extent
the same cover such lands, overriding royalties,
production payments and net profits interests in such
lands or such leases, and fee mineral interests, fee
royalty interests and other interests in such oil,
gas and other minerals) even though Grantor's
interest in such oil, gas and other minerals may be
incorrectly described in, or omitted from, Additional
Exhibit A; and
(iii) All rights, titles and interests of Grantor in and
to, or otherwise derived from, all presently existing
and valid oil, gas or mineral unitization, pooling,
or communitization agreements, declarations or orders
and in and to the properties covered and the units
created thereby (including all units formed under
orders, rules, regulations, or other official acts of
any federal, state, or other authority having
jurisdiction, voluntary unitization agreements,
designations or declarations, and so-called "working
interest units" created under operating agreements or
otherwise) relating to the properties described in
subsections (i) or (ii) above in this definition.
(c) "Additional Subject Lands" means the lands and depths
described in Additional Exhibit A hereto (where no depth limit
is specified, Additional Subject Lands shall include all
depths).
Without limitation of the generality of the provisions of Section 4,
above, or of the foregoing provisions of this Section 5, effective as to
deliveries of Additional PP Hydrocarbons at and after the Effective Time, the
definition of PP Hydrocarbons as found in the Original Conveyance is hereby
amended to include all Additional PP Hydrocarbons, as defined herein, the
definition of Subject Lands as found in the Original Conveyance shall be amended
to include all Additional Subject Lands, as defined herein, and the definition
of Subject Interests as found in the Original Conveyance shall be amended to
include all Additional Subject Interests, as defined herein; the term "Initial
Time", as found in the definition of "Subject Hydrocarbons" in the Original
Conveyance, shall be deemed to refer to the Effective Time, as such term is
defined herein, but only as to Additional PP Hydrocarbons, and the Original
Conveyance is amended to so provide.
6. All of the terms and provisions of the Original Conveyance, as the
same is amended and supplemented hereby, are ratified, adopted, affirmed and
renewed, and remain in full force and effect for the benefit of Grantee, the
Beneficiaries, Funds Agent, and their respective successors and assigns. To the
extent, if any, required to give effect to the Supplements or to the
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ratification, adoption, affirmation and renewal provided for in the preceding
sentence, Grantor does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER,
SET OVER AND DELIVER unto Grantee, as a production payment, to be held in
undivided interests in proportion to their Percentage Shares, a term overriding
royalty interest carved out of and burdening the Subject Interests equal to and
measured by all PP Hydrocarbons in and under and that may be produced from (or,
to the extent pooled or unitized, allocated to) the Subject Lands, with such
production payment to terminate as of the Termination Time and to be held upon
and subject to the terms of the Original Conveyance as amended hereby.
7. The definition of "Percentage Share" in Section 1.1 of the Original
Conveyance is hereby amended in its entirety to read as follows:
" 'Percentage Share' means, with respect to each Person
included in Grantee, the fractional undivided interest which it owns in
the Production Payment at the time in question. From the initial grant
of the Production Payment until 9:00 a.m. Houston, Texas time, on June
7, 2000, the Percentage Share of each Person included in Grantee was
as follows:
Fund V 42.859594%
Fund VI 21.429797%
SPS 35.710609%
From and after 9:00 a.m. Houston, Texas time, on June 7, 2000, until
9:00 a.m. Houston, Texas time, on September 8, 2000, the Percentage
Share of each Person included in Grantee was as follows:
Fund V 33.048697%
Fund VI 16.524349 %
SPS 50.426954%
From and after 9:00 a.m. Houston, Texas time, on September 8, 2000, the
Percentage Share of each Person included in Grantee is as follows:
Fund V 22.863142%
Fund VI 11.431571%
SPS 65.705287% "
The foregoing Percentage Shares of Fund V, Fund VI and SPS, respectively, are in
this Amendment called their "amended Percentage Shares".
In consideration of the additional purchase price payment made by SPS
to Grantor and the foregoing increase in the unliquidated balance of the Primary
Sum:
(a) Fund V and Fund VI do hereby GRANT, BARGAIN, SELL, CONVEY,
ASSIGN, TRANSFER, SET OVER and DELIVER unto SPS such additional
undivided interests in the Production Payment as are necessary in order
to cause SPS, Fund V and
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Fund VI to own the Production Payment, at and after the Effective Time,
in undivided interests in proportion to their respective amended
Percentage Shares, and
(b) Fund V and Fund VI do further assign unto SPS such
undivided interests in Fund V's and Fund VI's accounts receivable from
the sale of PP Hydrocarbons - to the extent such accounts receivable
exist and are unpaid at the Effective Time and arise from the sale of
PP Hydrocarbons before the Effective Time - as are necessary in order
to cause SPS, Fund V and Fund VI to share in all collections of such
accounts receivable after the Effective Time in proportion to their
respective amended Percentage Shares.
TO HAVE AND TO HOLD the same, upon and subject to the terms of the
Original Conveyance, as amended hereby, unto SPS and its successors and
Permitted Assigns, until the Termination Time.
8. This Supplement may be executed in multiple counterparts, all of
which are identical.
9. This Supplement shall be binding upon and shall inure to the benefit
of the parties hereto, and their respective successors and assigns, and all of
the covenants and agreements contained in the Original Conveyance, as amended
hereby, shall be deemed to be covenants and agreements running with the lands
affected thereby.
10. This Supplement shall be governed by and construed in accordance
with the laws of the State of Texas, without regard to principles of conflicts
of laws.
IN WITNESS WHEREOF, this Supplement is executed by the parties hereto
on the dates set out below in their respective acknowledgments, but effective as
of the Effective Time.
TRANSTEXAS GAS CORPORATION
By: /s/ ED DONAHUE
----------------------------------
Ed Donahue
Vice President
Grantor's address: 1300 North Sam Houston Parkway East
Suite 310
Houston, Texas 77032-2949
Attention: Ed Donahue, Vice President
Telephone: 281/987-8600
Telecopy: 281/986-8865
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SOUTHERN PRODUCER SERVICES, L.P.
By: SC Ashwood Holdings, Inc.,
its general partner
By: /s/ DAVID W. STEWART
---------------------------
David W. Stewart
Vice President
SPS's address: 1200 Smith Street
Suite 2890
Houston, Texas 77002
Attention: David W. Stewart
Telephone: 713/276-1902
Telecopy: 713/276-1990
TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY
PARTNERSHIP, L.P., and
TCW DR VI INVESTMENT PARTNERSHIP, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as Agent
By: /s/ KURT A. TALBOT
---------------------------
Kurt A. Talbot
Senior Vice President
Fund V's and Fund VI's address: c/o Trust Company of the West
865 South Figueroa
Los Angeles, California 90017
Attention: Thomas F. Mehlberg
Telephone: 213/244-0702
Telecopy: 213/244-0604
This document prepared by:
John W. Rain
Thompson & Knight L.L.P.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
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STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me on this 11th day of
September, 2000, by Ed Donahue, the Vice President of TransTexas Gas
Corporation, a Delaware corporation, on behalf of such corporation.
/s/ NANCY L. JAMES
---------------------------------------
[SEAL] Notary Public, State of Texas
STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me on this 11th day
of September, 2000, by David W. Stewart, the Vice President of SC Ashwood
Holdings, Inc., a Georgia corporation, on behalf of such corporation acting as
general partner of Southern Producer Services L.P., a Delaware limited
partnership, and on behalf of such limited partnership.
/s/ NANCY L. JAMES
---------------------------------------
[SEAL] Notary Public, State of Texas
STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me on this 11th day
of September, 2000, by Kurt A. Talbot, the Senior Vice President of TCW Asset
Management Company, a California corporation, on behalf of such corporation
acting as agent as aforesaid.
/s/ NANCY L. JAMES
---------------------------------------
[SEAL] Notary Public, State of Texas
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SCHEDULE 1
RECORDING SCHEDULE
1. Production Payment Conveyance dated as of March 14, 2000, to TCW
Portfolio No. 1555 DR V Sub-Custody Partnership, L.P., TCW DR VI
Investment Partnership, L.P., Southern Producer Services, L.P. from
TransTexas Gas Corporation.
<TABLE>
<CAPTION>
Recording Jurisdiction Recording Data
---------------------- --------------
<S> <C>
Chambers County, TX Document No. 00-448-604,
Filed 3/17/2000
Galveston County, TX Film Code #014-39-1028,
Filed 3/17/2000
Jim Hogg County, TX Volume 17, Page 362,
Filed 3/20/2000
Live Oak County, TX Volume 449, Page 135,
Filed 3/20/2000
Wharton County, TX Volume 360, Page 596,
Filed 3/17/2000
Zapata County, TX Volume 629, Page 471,
Filed 3/17/2000
General Land Office of Texas Sent for filing
</TABLE>
2. First Supplement to Production Payment Conveyance among TransTexas Gas
Corporation, Southern Producer Services, L.P., TCW Portfolio No. 1555
DR V Sub- Custody Partnership, L.P. and TCW DR VI Investment
Partnership, L.P.
<TABLE>
<CAPTION>
Recording Jurisdiction Recording Data
---------------------- --------------
<S> <C>
Chambers County, TX Document No. 00-459-630
Filed 6/9/2000
Galveston County, TX Film Code 014-62-1617
Filed 6/9/2000
Jim Hogg County, TX Volume 19, Page 526,
Filed 6/9/2000
Live Oak County, TX Volume 450, Page 428,
Filed 6/12/2000
Wharton County, TX Volume 371, Page 458,
Filed 6/9/2000
Zapata County, TX Volume 634, Page 110,
Filed 6/9/2000
General Land Office of Texas sent for filing
</TABLE>
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EXHIBIT A
ADDITIONAL SUBJECT INTERESTS
American National Insurance Company Gas Unit No. 1
Calhoun County, Texas
The entire (100.00%) interest in and to those certain oil, gas and
mineral leases described as follows:
(a) Oil and Gas lease dated February 5, 1997, from American National
Insurance Company, as lessor, to Adobe Energy, Inc., as lessee, a
Memorandum of which is recorded in Volume 179, page 185 of the Official
Records of Calhoun County, Texas; and
(b) Oil and Gas lease dated October 6, 1997, from American National
Insurance Company, as lessor, to Adobe Energy, Inc., as lessee, a
Memorandum of which is recorded in Volume 191, page 482 of the Official
Records of Calhoun County, Texas, as amended by that certain Correction
of Description of Land in Oil and Gas Lease and Memorandum of Oil, Gas
and Mineral Lease dated August 23, 1999, by and between American
National Insurance Company and TransTexas Gas Corporation, recorded in
Volume 236, page 622 of the Official Records of Calhoun County, Texas;
insofar as said leases cover and include 160.00 acres of land more particularly
described by metes and bounds on Exhibit "A", and being depicted on the map or
plat attached as Exhibit "B", to that certain Declaration of Unit dated January
4, 2000, by TransTexas Gas Corporation, recorded in Volume 245, page 46 of the
Official Records of Calhoun County, Texas.
<TABLE>
<S> <C>
Working Interest: 1.0000000
Net Revenue Interest: .7250000
</TABLE>
