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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 15, 1998
TRANSAMERICAN REFINING CORPORATION
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(Exact name of registrant as specified in its charter)
TEXAS
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(State or other jurisdiction of incorporation)
33-85930 76-0229632
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(Commission File Number) (I.R.S. Employer
Identification No.)
1300 North Sam Houston Parkway East, Suite 320
Houston, Texas 77032
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(Address of principal executive offices, including zip code)
(281) 986-8811
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Prior to December 15, 1998, TransAmerican Refining
Corporation, a Texas corporation ("TARC" or the "Company")
owned a refinery located in the Gulf Coast region along the
Mississippi River approximately 20 miles from New Orleans,
Louisiana. As a result of the Transaction (described below),
the Company no longer owns the refinery, but maintains a
non-controlling equity interest in TCR Holding Corporation, a
Delaware corporation ("TCR Holding"). TCR Holding owns a
controlling interest in TransContinental Refining
Corporation, a Delaware corporation ("TransContinental"), the
corporation that owns the refinery. TransContinental intends
to operate existing units and to complete construction of
additional units.
The following Transaction was consummated on December 15,
1998 in order to provide additional capital for construction
of the refinery. The Transaction included the following:
(i) The issuance by TARC of $150 million aggregate
principal amount of its 15% Senior Secured Notes due
2003 (the "Notes") to certain purchasers (the "New
Lenders");
(ii) the transfer by TARC to TCR Holding of substantially
all of its assets (the "Refinery Assets") in exchange
for (x) all of the capital stock of TCR Holding, which
includes the following:
(a) Class A Participating Preferred Stock,
Series A and Class A Participating Preferred
Stock, Series B (the "TCR Voting Preferred
Stock"),
(b) Class B junior non-voting participating
preferred stock ("Class B Preferred Stock"),
Class C junior non-voting participating
preferred stock ("Class C Preferred Stock")
and Class D junior non-voting participating
preferred stock ("Class D Preferred Stock"
and, together with the Class B Preferred
Stock and the Class C Preferred Stock, the
"TCR Repurchasable Preferred Stock"),
(c) Class E junior non-voting participating
preferred stock (the "TCR Non-Repurchasable
Preferred Stock" and, together with the TCR
Repurchasable Preferred Stock, the "TCR
Non-Voting Preferred Stock"),
(d) Class A Voting Common Stock, Series A (the
"TCR Voting Common Stock"), and
(e) Class B Non-Voting Common Stock (the "TCR
Non-Voting Common Stock" and, together with
the TCR Voting Common Stock, the "TCR Common
Stock"),
and (y) the assumption of debt and other specified
obligations of TARC (including the Notes, approximately
$43.5 million in post-Transaction intercompany debt to
TransAmerican Energy Corporation ("TEC") (the "TARC
Working Capital Loan") and approximately $36 million in
debt secured by certain tank storage and terminaling
facilities (the "Tank Storage Debt")) other than (a)
the debt issued pursuant to the Loan Agreement dated as
of June 13, 1997, as amended, between TEC and TARC (the
"TARC Intercompany Loan"), (b) TARC's Series A 16%
Senior Subordinated Notes due 2003 (the "Series A
Notes"), (c) TARC's Series C 16% Senior Subordinated
Notes due 2003 (the "Series C Notes" and, together with
the Series A Notes, the "TARC Subordinated Notes") and
(d) certain accounts payable and other liabilities;
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(iii) the transfer by TCR Holding to TransContinental of the
Refinery Assets as a capital contribution and the
assumption by TransContinental of the debt and other
obligations of TARC assumed by TCR Holding on the date
of such transfer (including the Notes and the Tank
Storage Debt) other than the TARC Working Capital Loan;
(iv) the acquisition from TARC by the New Lenders, certain
holders (the "TEC Holders") of TEC's 11 1/2% Senior
Secured Notes due 2002 and 13% Senior Secured Discount
Notes due 2003 (the "TEC Notes") and certain of the
holders of the TARC Subordinated Notes (together with
the TEC Holders, the "Purchasers") of TCR Repurchasable
Preferred Stock representing 30.0% of the Residual
Equity of TCR Holding and TCR Non-Repurchasable
Preferred Stock representing 29.6% of the Residual
Equity of TCR Holding. Affiliates of Trust Company of
the West (the "TCW Affiliates") received the TCR
Non-Voting Common Stock representing 5% of the Residual
Equity of TCR Holding. Certain of the Purchasers
acquired the TCR Voting Common Stock representing 0.4%
of the Residual Equity and 59% of the voting power of
TCR Holding. TARC retained the TCR Voting Preferred
Stock representing 30.6% of the Residual Equity and 41%
of the voting power of TCR Holding. The remaining 4.4%
of the Residual Equity of TCR Holding, in the form of
TCR Non-Repurchasable Preferred Stock, initially will
be retained by TARC and is expected to be offered to
holders of certain of TARC's outstanding common stock
purchase warrants (the "TARC Warrants") in exchange for
such TARC Warrants. "Residual Equity" means the
interest of the indicated stockholders in the assets of
TCR Holding upon a liquidation or winding up of TCR
Holding, which interest is subject to the prior payment
of the liquidation preference of the TCR Voting
Preferred Stock and the TCR Non-Voting Preferred Stock;
(v) the grant by TARC of a security interest in the TCR
Voting Preferred Stock to secure the TARC Intercompany
Loan and the collateral assignment of such security
interest by TEC to secure the TEC Notes, the grant by
TCR Holding to TEC of a security interest in the common
stock of TransContinental to secure the TARC Working
Capital Loan, the collateral assignment of such
security interest to secure the TEC Notes, and the
provision in the TCR Voting Preferred Stock of the
right of holders of such stock in certain circumstances
to require TCR Holding to sell common stock of
TransContinental held by TCR Holding, or any assets
received on exchange or sale therefor, and apply the
proceeds to reduce the liquidation preference and
certain accrued but unpaid dividend amounts on the TCR
Voting Preferred Stock; and
(vi) the purchase from TransContinental by the New Lenders
of TransContinental's 6% Participating Preferred Stock
("TransContinental Preferred Stock").
As part of the Transaction, (i) the holders of TCR Holding
capital stock entered into a stockholders agreement providing
for the election of two nominees of TARC, two nominees of the
TCW Affiliates and one nominee of an affiliate of one of the
Purchasers as directors of TCR Holding and the election of
two nominees of TARC and two nominees of the TCW Affiliates
as directors of TransContinental, (ii) the stockholders of
TransContinental entered into an agreement providing for the
election of one nominee of the holders of the
TransContinental Preferred Stock (which initially shall be a
nominee of an affiliate of one of the Purchasers) and four
nominees of TCR Holding as directors of TransContinental,
(iii) the holders of the TransContinental Preferred Stock
would have the right to elect a majority of the directors of
TransContinental if either of such stockholders agreements
has been breached, is not being complied with or has been
adjudicated to be unenforceable, (iv) TransAmerican Natural
Gas Corporation ("TransAmerican"), as the sole stockholder of
TEC, and TEC, as the sole stockholder of TARC, would agree to
elect a representative of the TCW Affiliates as a director of
TEC and of TARC, respectively, (v) TCR Holding and
TransContinental would enter into registration rights
agreements or otherwise provide for certain registration
rights relating to their
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respective securities being issued to the New Lenders in the
Transaction, (vi) TCR Holding and TransContinental,
respectively, would enter into services agreements with
TransTexas Gas Corporation ("TransTexas") providing for
certain services to be rendered to TCR Holding and
TransContinental by TransTexas and (vii) TEC or one of its
affiliates will be granted certain rights to repurchase
shares of the TCR Repurchasable Preferred Stock (which would
become voting stock upon exercise of such rights), which
could result in TEC and its affiliates owning a majority of
the capital stock of TCR Holding and being entitled to elect
a majority of the directors of TCR Holding and, indirectly,
TransContinental. Such repurchase rights would only be
exercisable after the Notes, the TEC Notes and the TARC
Subordinated Notes have been fully repaid and certain
financial performance tests have been met. In addition, TARC
would have the right to repurchase the shares of TCR
Non-Voting Common Stock issued to the TCW Affiliates pursuant
to the Transaction for $5 million at any time during the
two-year period commencing with the Issue Date (as defined);
provided, however, that if the TCR Voting Preferred Stock
remains outstanding after July 31, 1999, TARC will have the
option to repurchase such stock at a nominal cost.
All of the above transactions, as well as other agreements
and transactions necessary to facilitate or related to the
foregoing, are referred to as the "Transaction."
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired:
Not applicable.
(b) Pro forma financial information:
Pro forma financial information was filed as part of
the Company's Quarterly Report on Form 10-Q for the
quarter ended October 31, 1998, and is incorporated
herein by reference.
(c) Exhibits:
2.1 -- Securities Purchase Agreement dated
December 15, 1998 by and among TARC, TCR
Holding, TransContinental and the purchasers
named therein.
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2.2 -- Asset Transfer Agreement dated December 15,
1998 between TARC and TCR Holding.
2.3 -- Asset Transfer Agreement dated December 15,
1998 between TCR Holding and
TransContinental.
99.1 -- Pro Forma Condensed Financial Information
of TARC (filed as part of TARC's Quarterly
Report on Form 10-Q for the quarter ended
October 31, 1998, and incorporated herein
by reference).
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSAMERICAN REFINING CORPORATION
By: /s/ ED DONAHUE
--------------------------------
Name: Ed Donahue
Title: Vice President
Dated: December 30, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
2.1 -- Securities Purchase Agreement dated December 15, 1998 by and among
TARC, TCR Holding, TransContinental and the purchasers named therein.
2.2 -- Asset Transfer Agreement dated December 15, 1998 between TARC and TCR
Holding.
2.3 -- Asset Transfer Agreement dated December 15, 1998 between TCR Holding
and TransContinental.
99.1 -- Pro Forma Condensed Financial Information of TARC (filed as part of
TARC's Quarterly Report on Form 10-Q for the quarter ended
October 31, 1998, and incorporated herein by reference).
</TABLE>
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EXHIBIT 2.1
$150,000,000
TRANSAMERICAN REFINING CORPORATION, a Texas Corporation
15% SENIOR SECURED NOTES DUE 2003
TCR HOLDING CORPORATION, a Delaware Corporation
240,000 SHARES CLASS A VOTING COMMON STOCK, SERIES A
3,000,000 SHARES CLASS B NON-VOTING COMMON STOCK
6,000,000 SHARES CLASS B JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
3,300,000 SHARES CLASS C JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
8,700,000 SHARES CLASS D JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
17,760,000 SHARES CLASS E JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
TRANSCONTINENTAL REFINING CORPORATION, a Delaware Corporation
6,000,000 SHARES 6% PARTICIPATING PREFERRED STOCK
SECURITIES PURCHASE AGREEMENT
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December 15, 1998
TCW Leveraged Income Trust, L.P.
TCW Leveraged Income Trust II, L.P.
TCW Shared Opportunity Fund II, L.P.
TCW Shared Opportunity Fund IIB, L.L.C.
TCW Shared Opportunity Fund III, L.P.
Brown University Third Century Fund
(collectively, the "TCW Funds")
c/o Trust Company of the West
11100 Santa Monica Boulevard
Los Angeles, California 90025
Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Los Angeles, California 90025
Ladies and Gentlemen:
This Amended and Restated Securities Purchase Agreement is
hereby intended to replace in its entirety the Securities Purchase Agreement
dated December 10, 1998 among the parties hereto. TransAmerican Refining
Corporation, a corporation organized under the laws of the State of Texas
("TARC"), proposes to issue and sell to the purchasers listed on Schedule I (the
"NEW LENDERS"), severally and not jointly, $150,000,000 in aggregate principal
amount of its 15% Senior Secured Notes Due 2003 (the "NOTES") and the following
capital stock of TCR Holding Corporation, a corporation organized under the laws
of the State of Delaware ("TCR HOLDING"), 240,000 shares of its $0.01 par value
Class A Voting Common Stock, Series A ("TCR VOTING COMMON STOCK"), 3,000,000
shares of its $0.01 par value Class B Non-Voting Common Stock ("TCR NON-VOTING
COMMON STOCK", collectively with the TCR Voting Common Stock, the "TCR COMMON
STOCK"), 3,000,000 shares of its Class B Junior Non-Voting Participating
Preferred Stock ("CLASS B PREFERRED STOCK"), 1,650,000 shares of its $0.01 par
value Class C Junior Non-Voting Preferred Stock ("CLASS C PREFERRED STOCK"),
4,350,000 shares of its $0.01 par value Class D Junior Non-Voting Preferred
Stock ("CLASS D PREFERRED STOCK"), 8,760,000 shares of its $0.01 par value Class
E Junior Non-Voting Preferred Stock ("CLASS E PREFERRED STOCK," collectively
with Class B Preferred Stock, Class C Preferred Stock and Class D Preferred
Stock, the "TCR NON-VOTING PREFERRED STOCK", the TCR Non-Voting Preferred Stock,
TCR Non-Voting Common Stock and the TCR Voting Common Stock,
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collectively, the "TCR STOCK"). Such TCR Common Stock and the Notes being
referred to collectively herein as the "NEW LENDER SECURITIES." TransContinental
Refining Corporation, a corporation organized under the laws of the State of
Delaware ("TRANSCONTINENTAL") proposes to issue and sell to the New Lenders,
severally and not jointly, 6,000,000 shares of its $0.01 par value, 6%
Participating Convertible Preferred Stock ("TRANSCONTINENTAL PREFERRED STOCK")
in the aggregate. TARC additionally proposes to sell to Jefferies & Company,
Inc. ("JEFFERIES" or the "PURCHASER") 3,000,000 shares of Class B Preferred
Stock, 1,650,000 shares of Class C Preferred Stock, 4,350,000 shares of Class D
Preferred Stock and 9,000,000 shares of Class E Preferred Stock (the "ADDITIONAL
SECURITIES", collectively with the New Lender Securities and the TCR Non-Voting
Common Stock, the "SECURITIES"). The Notes are to be issued pursuant to an
Indenture (the "INDENTURE"), to be dated as of December 15, 1998 between TARC
and The Bank of New York, as trustee (the "TRUSTEE"). The obligations under the
Notes will be secured by a first priority security interests (the "SECURITY
INTERESTS") in certain of the personal property assets of TARC (the "PERSONAL
PROPERTY COLLATERAL") as set forth in a Security Agreement of even date with the
Indenture (the "SECURITY AGREEMENT") and certain real property assets of TARC
(the "REAL PROPERTY COLLATERAL") as set forth in a Mortgage of even date with
the Indenture (the "COMPANY MORTGAGE"). The Securities will be offered and sold
to the New Lenders and the Purchaser (the "OFFERING") without being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), in reliance
upon certain exemptions set forth therein.
In connection with the offer and sale of the Notes, the New
Lender Securities and the TransContinental Preferred Stock to the New Lenders,
TARC, TCR Holding and TransContinental have prepared a joint disclosure
statement dated December 8, 1998, as supplemented on December 13, 1998 (the "NEW
LENDER DISCLOSURE STATEMENT") containing, among other things, a description of
the terms of the Securities and information relating to TARC and its business.
In connection with the offer and sale of the Additional Securities, TCR Holding
has prepared a disclosure statement dated December 8, 1998 (the "PURCHASER
DISCLOSURE STATEMENT", collectively with the New Lender Disclosure Statement,
the "DISCLOSURE STATEMENTS").
The term "as of the date hereof" when used herein shall mean
each date upon which a counterpart signature page hereto is executed.
1. Terms of the Offering. The New Lenders and their direct and
indirect transferees each shall be entitled to the benefits of a Registration
Rights Agreement among TARC and the New Lenders (the "A/B EXCHANGE REGISTRATION
RIGHTS AGREEMENT"), to be entered into as of the date (the "CLOSING DATE") of
the Closing (as defined) and which shall be assigned to and assumed by each of
TCR Holding and TransContinental, pursuant to which TARC (and as successors, TCR
Holding and TransContinental, respectively) shall agree to use its best efforts
to file with the Securities and Exchange Commission (the "COMMISSION") and have
declared effective under the Securities Act an Exchange Offer Registration
Statement (as defined in the A/B Exchange Registration Rights Agreement)
registering the offer and sale of notes in all respects identical to the Notes
(except for references to series and restrictive legends) and (with respect to
resales by the New Lenders, the Purchaser and by affiliates of TARC, TCR Holding
or TransContinental and in certain other circumstances) a Shelf Registration
Statement (as defined in the A/B Exchange Registration Rights Agreement),
registering the resale of the Notes, as the case may be.
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On the Closing Date, the following transactions (collectively
the "REORGANIZATION") shall occur pursuant the terms of (w) this Agreement, (x)
an ASSET TRANSFER AGREEMENT dated the Closing Date between TARC and TCR Holding
(the "TCR HOLDING ASSET TRANSFER AGREEMENT") and (y) an ASSET TRANSFER AGREEMENT
dated the Closing Date between TCR Holding and TransContinental (the
"TRANSCONTINENTAL ASSET TRANSFER AGREEMENT" and, together with the TCR Holding
ASSET TRANSFER AGREEMENT, the "ASSET TRANSFER AGREEMENTS"):
(a) TARC and TCR Holding shall make the following exchange:
(i) TCR Holding shall issue to TARC all of its capital
stock consisting of (A) 15,081,429 shares of $0.01 par value Class A
Participating Preferred Stock, Series A of TCR Holding ("TCR SERIES A VOTING
PREFERRED STOCK") 3,278,571 shares of $0.01 par value Class A Participating
Preferred Stock, Series B of TCR Holding ("TCR SERIES B VOTING PREFERRED STOCK",
collectively with the TCR Series A Voting Preferred Stock, the "TCR VOTING
PREFERRED STOCK"), collectively representing, in the aggregate, 30.6% of the
equity interests in TCR Holding, (B) the Class B Preferred Stock, the Class C
Preferred Stock, the Class D Preferred Stock and the Class E Preferred Stock,
collectively representing in the aggregate, 64.0% of the equity interests in TCR
Holding, (C) the Class A Voting Common Stock, representing 0.4% of the equity
interests in TCR Holding and (D) the TCR Non-Voting Common Stock, representing
5.0% of the equity interests in TCR Holding;
(ii) TARC shall issue the Notes and sell the TCR Stock
to the New Lenders;
(iii) TARC shall transfer to TCR Holding, all of TARC's
assets (including, without limitation, the refinery (the "REFINERY") currently
under construction and the tank storage facility (the "TANK STORAGE FACILITY"),
each in St. Charles Parish, Louisiana, and all contracts, Licenses (as defined
herein) and other rights associated with such assets (the "TRANSFERRED ASSETS")
other than certain cash amounts to repay an intercompany loan obligation, repay
certain accounts payable and other obligations, pay transaction fees and
expenses and certain rights in existing litigation);
(iv) TCR Holding shall assume certain liabilities of
TARC (including, without limitation, the Notes, $36,000,000 aggregate principal
amount 13% Senior Secured Notes due 2002 the proceeds of which were used to
purchase the Tank Storage Facility (the "TANK STORAGE FACILITY NOTES") and the
capital loan executed by TARC in favor of TransAmerican Energy Corporation, a
Delaware corporation ("TEC"), by note dated as of October 31, 1998 (the "TEC
SWINGLINE NOTE" and together with the other liabilities of TARC assumed by TCR
Holding, the "TRANSFERRED LIABILITIES");
(b) (i) TCR Holding shall transfer the Transferred Assets
(other than certain cash amounts used to repay interest on the TEC Swingline
Note (as defined)) to TransContinental, (ii) TransContinental shall assume all
of the Transferred Liabilities from TCR Holding (other than the TEC Swingline
Note) and (iii) TransContinental shall issue the TransContinental Preferred
Stock to the New Lenders; and
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(c) TARC shall use the cash it does not transfer to TCR
Holding to repay certain of its outstanding liabilities as set forth in Schedule
1(c) hereto.
2. Representations and Warranties. TEC, TARC, TCR Holding and
TransContinental, jointly and severally, represent and warrant to, and agree
with, the New Lenders and the Purchaser that as of the date hereof and on the
date of the Closing (or, with respect to representations and warranties with
respect to each of the Disclosure Statements, as of the date or dates stated):
(a) Each of the Disclosure Statements, as of its date
contained and as of the date hereof contains, and as of the closing (the
"CLOSING") of the transactions contemplated hereby (including, without
limitation, the issuance of the Securities and the Reorganization) will contain,
all the information specified in, and meets and will meet the requirements of,
Rule 144A(d)(4) of the Securities Act and each of the Disclosure Statements, as
of its date and as of the date hereof is, and as of the Closing Date will be,
accurate in all material respects and does not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that TEC, TARC, TCR Holding and TransContinental make no
representations or warranties as to the information contained in or omitted from
each of the Disclosure Statements in reliance upon and in conformity with
information furnished in writing to TARC by or on behalf of the New Lenders and
the Purchaser, respectively, specifically for inclusion in each of the
Disclosure Statements.
(b) Schedule 2(b)(i) contains a true and correct list of (i)
each parcel of real property owned, leased (as lessor or lessee) or otherwise
occupied or used by TARC (the "REAL PROPERTY") and (ii) all debentures, notes
and other evidences of indebtedness, stocks, securities (including rights to
purchase and securities convertible into or exchangeable for other securities,
interests in joint ventures and general and limited partnerships, mortgage loans
and other investment or portfolio assets owned of record or beneficially prior
to consummation of the Reorganization by TARC or, after consummation of the
Reorganization, TCR Holding or TransContinental, and issued by any person other
than TARC, TCR Holding or TransContinental (other than trade receivables
generated in the ordinary course of business)("INVESTMENT ASSETS"). Schedule
2(b)(ii) contains a true and complete list of each mortgage, pledge, assessment,
security interest, lease, lien, adverse claim, levy, charge or other encumbrance
of any kind, or any Contract (as defined below) involving any conditional sale
or title retention arrangement or any Contract to give any of the foregoing
("LIENS") on any of the assets, including the Real Property and the Personal
Property Collateral, the Investment Assets and other personal property owned or
leased by TARC, TCR Holding or TransContinental or used in or reasonably
necessary for the conduct of the business of TARC, and following the Closing,
TCR Holding or TransContinental (the "PERSONAL PROPERTY"), as such business is
described in each of the Disclosure Statements and as expected to be conducted
following completion of the Refinery (the "BUSINESS"). TARC has and TCR Holding
and TransContinental will (as part of or immediately following the transactions
contemplated hereby (including, without limitation, the Reorganization), have,
as the case may be, either good and marketable fee title to, or a valid
leasehold interest in, all Real Property, and good and marketable title to, or
has valid leasehold interests in or valid rights under Contract to use all
Personal Property, which title, leasehold
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interests or rights to use shall be, immediately following consummation of the
transactions contemplated hereby and under the ASSET TRANSFER AGREEMENTS
(including, without limitation, the Reorganization), free and clear of all Liens
other than those Liens set forth on Schedule 2(b)(iii) ("PERMITTED LIENS").
(c) TARC has no direct or indirect subsidiaries other than
(after consummation of the transactions contemplated hereby (including, without
limitation, the Reorganization) TCR Holding and TransContinental. TCR Holding
has no direct or indirect subsidiaries other than (after consummation of the
transactions contemplated hereby (including, without limitation, the
Reorganization) TransContinental. TransContinental has no direct or indirect
subsidiaries.
(d) Each of TEC, TARC, TCR Holding and TransContinental has
been duly organized and is and will be validly existing as a corporation in good
standing under the laws of the jurisdiction of its organization, with requisite
power and corporate authority to own or lease its properties and conduct the
Business, as of the date hereof and as of the Closing Date, and is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the character of the business conducted
by it or the location of the properties owned or leased by it make such
qualification necessary, except to the extent that any such failure to be so
qualified or be in good standing would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or otherwise),
results of operation, Business, prospects, net worth or assets of TARC, TCR
Holding or TransContinental, or on the ability of TEC, TARC, TCR Holding and
TransContinental to perform their respective obligations under this Agreement,
the Notes, the Indenture, the A/B Exchange Registration Rights Agreement, the
Stockholders Agreements (as defined), the Security Agreement, the Company
Mortgage, the respective certificates of designation governing the Securities
(other than the Notes), the Construction Collateral and Disbursement Account
Agreement between the Trustee and TARC (the "CONSTRUCTION COLLATERAL AND
DISBURSEMENT AGREEMENT"), the Master Services Agreement between Southeast
Louisiana Contractors of Norco, Inc. ("Southeast") and TransContinental (the
"SOUTHEAST SERVICES AGREEMENT") the Exchange and Registration Rights Agreement
(as defined), the TransContinental Preferred Registration Rights Agreement (as
defined), the Services Agreement (as defined), the Tax Allocation Agreement (as
defined), the Asset Transfer Agreements, the Assumption Agreements (as defined)
or any of the other documents to be delivered pursuant hereto or thereto or in
connection with the transactions (including, without limitation the issuance of
the Securities and the Reorganization) contemplated hereby or thereby (the
"TRANSACTION DOCUMENTS" (such effect a "MATERIAL ADVERSE EFFECT").
(e) The total authorized capital stock of TARC consists of
100,000,000 shares of $0.01 par value common stock, of which 30,000,000 shares
were issued and outstanding as of the date hereof and 3,694,248 shares were
reserved for issuance under warrants issued by TARC and outstanding as of the
date hereof and 20,000,000 shares, $1.00 par value preferred stock of which none
is outstanding as of the date hereof. Except as set forth above, no shares of
capital stock or other voting securities of TARC were issued, reserved for
issuance or outstanding as of the date hereof. Immediately prior to and after
the Closing, the total authorized capital stock of TCR Holding will consist of
100,000,000 shares of its $0.01 par value common stock and 65,760,000 shares of
its preferred stock consisting of 18,360,000 shares of TCR Voting Preferred
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Stock, of which 18,360,000 shares will be issued and outstanding immediately
after the Closing; 9,000,000 shares of Class B Preferred Stock, of which
6,000,000 shares will be issued and outstanding immediately after the Closing;
4,125,000 shares of Class C Preferred Stock, of which 3,300,000 shares will be
issued and outstanding immediately after the Closing; 10,875,000 shares of Class
D Preferred Stock, of which 8,700,000 shares will be issued and outstanding
immediately after the Closing; 24,900,000 shares of Class E Preferred Stock, of
which 17,760,000 shares will be issued and outstanding immediately after the
Closing; 240,000 shares of TCR Voting Common Stock, of which 240,000 shares will
be issued and outstanding immediately after the Closing; 18,360,000 shares of
Class A Voting Common Stock, Series B, par value $.01 per share, of which no
shares will be issued and outstanding; and 3,000,000 shares of TCR Non-Voting
Common Stock of which 3,000,000 will be issued and outstanding immediately after
the Closing. Immediately after the Closing, the total authorized capital stock
of TransContinental will consist of 1,000,000 shares of common stock, par value
$0.01, of which 855,400 shares will be issued and outstanding immediately after
the Closing and 9,000,000 shares of preferred stock, of which 6,000,000 shares
of 6% Participating Convertible Preferred Stock will be issued and outstanding
immediately after the Closing. All of the issued and outstanding shares of
capital stock of TARC, TCR Holding and TransContinental, including the
Securities to be delivered hereunder, have been or, as of the Closing Date, will
be duly and validly authorized and issued and fully paid and non-assessable,
free and clear of all Liens, encumbrances, equities or claims, other than the
Liens created by the pledge of shares of common stock of TransContinental held
by TCR Holding, in favor of TEC with respect to the TEC Swingline Note, the
Liens to be created on such shares upon the exercise of the option of TCR
Holding to exchange notes and common stock for shares of TCR Preferred Stock,
and the Liens created by the pledges of the TCR Voting Preferred Stock in favor
of TEC with respect to its Senior Secured Notes due 2002 and Senior Secured
Discount Notes due 2002 (collectively, the "TEC NOTES") and the springing Lien
rights in favor of TARC with respect to its Senior Subordinated Notes due 2003.
(f) Each of TEC, TARC, TCR Holding and TransContinental has
requisite corporate power and authority to execute and deliver, and to perform
its respective obligations under, this Agreement and the other Transaction
Documents to which it is a party, to consummate the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the
Securities and the Reorganization), and to issue, sell and deliver the
Securities to be sold by it to the New Lenders and the Purchaser as provided
herein and therein, and to sell and transfer or purchase and acquire, as the
case may be, the Transferred Assets and Transferred Liabilities pursuant to the
Asset Transfer Agreements.
(g) The Notes have been duly and validly authorized by all
necessary corporate action (including, without limitation, required stockholder
approvals, if any) and, when executed and authenticated in accordance with the
provisions of the Indenture, and delivered to and paid for by the New Lenders in
accordance with the terms of this Agreement, (i) will be legal, valid and
binding obligations of TARC, enforceable against TARC in accordance with their
terms, (ii) when assigned to and assumed by TCR Holding, will be legal, valid
and binding obligations of TCR Holding, enforceable against TCR Holding in
accordance with their terms and (iii) when assigned to and assumed by
TransContinental will be legal, valid and binding obligations of
TransContinental enforceable against TransContinental in accordance with their
terms, in each case, except as such enforceability (x) may be limited by
bankruptcy, insolvency,
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<PAGE> 8
reorganization or other similar laws affecting creditors' rights generally and
(y) is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and, in each
case, will be entitled to the benefits of the Indenture; and the Securities and
the Indenture and the other Transaction Documents will conform, as of the
Closing Date, in all material respects to the descriptions thereof, if any,
contained in each of the Disclosure Statements.
(h) Each of this Agreement, the Asset Transfer Agreements, the
A/B Exchange Registration Rights Agreement, each of the Stockholders Agreement
among the TCW Funds and TransAmerican Natural Gas Corporation, a Texas
corporation, the Stockholders Agreement among the TCW Funds and TEC, the
Stockholders Agreement (TCR Holding) among TARC, TCR Holding and the initial
holders named therein and the Stockholders Agreement (TransContinental) among
holders of the 6% Participating Preferred Stock named therein, TARC and TCR
Holding (collectively, the "STOCKHOLDERS AGREEMENTS"), the Security Agreement,
the Company Mortgage, the Exchange and Registration Rights Agreement among the
holders of the TransContinental Preferred Stock, certain capital stock of TCR
Holding, TCR Holding and TransContinental (the "EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT") the Registration Rights Agreement among holders of the
TransContinental Preferred Stock and TransContinental (the "TRANSCONTINENTAL
PREFERRED REGISTRATION RIGHTS AGREEMENT" and, collectively with the Exchange and
Registration Rights Agreement, the "REGISTRATION RIGHTS AGREEMENTS"), the Tax
Allocation Agreement between TCR Holding and TransContinental (the "TAX
ALLOCATION AGREEMENT") the Amended and Restated Services Agreement among TNGC
Holdings Corporation, a Delaware corporation and its affiliates, TransTexas Gas
Corporation, a Delaware corporation, TARC, TCR Holding and TransContinental (the
"SERVICES AGREEMENT"), the Southeast Services Agreement, the Construction
Collateral and Disbursement Agreement, the TARC Assumption Agreement between
TARC and TCR Holding (the "TARC ASSUMPTION AGREEMENT") and the Assignment and
Assumption Agreement between TCR Holding and TransContinental (the
"TRANSCONTINENTAL ASSUMPTION AGREEMENT") and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Securities and the Reorganization) have been duly and validly
authorized by all necessary corporate action (including, without limitation,
required stockholder and shareholder approvals, if any) of TEC, TARC, TCR
Holding and TransContinental, and this Agreement and each of the other
Transaction Documents to which it is a party has been executed and delivered by
TEC, TARC, TCR Holding and TransContinental and constitutes the legal, valid and
binding agreement of TEC, TARC, TCR Holding and TransContinental, respectively,
enforceable against each in accordance with its terms, except as such
enforceability (x) may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally or (y) is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(i) The Indenture and the consummation of the transactions
contemplated thereby, including the issuance of the Notes, have been duly and
validly authorized by all necessary corporate action (including, without
limitation, required stockholder approvals, if any) of TARC, and when the
Indenture is executed and delivered by TARC, the Indenture will be a legal,
valid and binding agreement of TARC, enforceable against TARC in accordance with
its terms, except as such enforceability (x) may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally or (y) is subject to
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<PAGE> 9
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and will be in sufficient form
for qualification under the Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT") and the rules and regulations of the Commission promulgated
thereunder. When the TARC Assumption Agreement has been executed and delivered,
the Indenture will be a legal, valid and binding agreement of TCR Holding,
enforceable against TCR Holding in accordance with its terms, except as such
enforceability (x) may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally or (y) is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). When the TransContinental
Assumption Agreement has been executed and delivered, the Indenture will be a
legal, valid and binding agreement of TransContinental, enforceable against
TransContinental in accordance with its terms, except as such enforceability (x)
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally or (y) is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(j) Schedule 2(j) contains a true and complete list of all
agreements, leases, licenses, evidences of indebtedness, loan agreements,
mortgages, deeds of trust, construction contracts, refinery products purchase
agreements, indentures, security agreements or other instruments, contracts or
arrangements to which TARC, TCR Holding and TransContinental is (or, following
consummation of the Reorganization, will be) a party or by which any of them is
(or, following consummation of the Reorganization, will be) bound, or to which
any of their respective properties is (or, following consummation of the
Reorganization, will be) subject (the "Contracts") that (i)(A) involve the
payment or potential payment, pursuant to the terms of any such Contract, by or
to TARC, TCR Holding or TransContinental of more than $1,000,000 during any
twelve month period and (B) cannot be terminated at the option of TARC, TCR
Holding or TransContinental within 30 days after giving notice of termination
without resulting in any material cost or penalty to any of TARC, TCR Holding or
TransContinental, (ii) evidence or govern indebtedness of TARC, TCR Holding or
TransContinental for borrowed money with an outstanding balance in excess of
$50,000, (iii) are otherwise material to the Business, (iv) the termination or
cancellation of which would result in a Material Adverse Effect or (v) evidence
or govern any liability or obligation either on the part of or in favor of TARC,
TCR Holding or TransContinental to any person that directly, or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with any of TEC, TARC, TCR Holding or TransContinental, including
any officer, director, employee or holder of capital stock of TEC, TARC, TCR
Holding or TransContinental or any of their affiliates. Giving effect to the use
of proceeds substantially contemporaneously with the Closing, none of TEC, TARC,
TCR Holding or TransContinental is, or with the giving of notice or lapse of
time or both would be, in violation of or in default under, nor will the
execution or delivery of this Agreement or any of the other Transaction
Documents or the consummation of the transactions contemplated hereby or thereby
(including, without limitation, the issuance of the Securities and the
Reorganization) result in a violation of, or constitute a default under, the
Certificates or Articles of Incorporation, by-laws or other governing documents
of TEC, TARC, TCR Holding or TransContinental, or constitute a breach or
violation of or default under, or result in or give to any person any right of
termination, cancellation, acceleration or modification in or with respect to,
or result in or give to any person any additional rights or entitlements to
increased, additional, accelerated or guaranteed payments with respect to, any
Contract (after giving effect to consents and waivers obtained prior to, or
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<PAGE> 10
concurrently with, the Closing), except for such breaches or violations of or
such defaults under any such Contract as would not (after giving effect to the
use on the Closing Date of proceeds from the sale of the Securities),
individually or in the aggregate, have a Material Adverse Effect; nor will the
execution, delivery and performance by TEC, TARC, TCR Holding and
TransContinental of their respective obligations hereunder or thereunder cause a
material violation of any law, rule, administrative regulation, License (as
defined in paragraph (n) below) or decree of any court, governmental agency or
body having jurisdiction over TEC, TARC, TCR Holding or TransContinental or any
of their respective properties, or result in the creation or imposition of any
Lien (other than Permitted Liens) upon any property or asset of TEC, TARC, TCR
Holding or TransContinental, except, in each case, as would not, individually or
in the aggregate, have a Material Adverse Effect. TEC, after giving effect to
the use on the Closing Date of the proceeds from the sale of the Securities, is
not in default under any loan agreement.
(k) Other than a consent required for the assignment of the
Database Software Agreement between TARC and Oracle Database Software, no
consent, approval, authorization or order of, or filing or registration or
qualification with, any court or governmental agency or body or financial
institution, or any other party under any Contract will be required as of the
Closing Date on the part of any of them for the authorization, issuance, sale
and delivery of the Securities, or the execution, delivery and performance by
TEC, TARC, TCR Holding and TransContinental, of their respective obligations
under this Agreement or any of the other Transactions Document or the
consummation of the transactions contemplated hereby or thereby (including,
without limitation, the Reorganization), except (1) as have been obtained, (2)
as may be required under the "Blue Sky" laws of the various states in connection
with the offer and sale of the Securities and (3) as may be required by the
Securities Act, the "Blue Sky" laws of the various states, the Trust Indenture
Act and the bylaws and rules of the National Association of Securities Dealers,
Inc. ("NASD"), in conjunction with an exchange offer for, or registered resale
of, the Securities pursuant to the A/B Exchange Registration Rights Agreement,
the Registration Rights Agreements and the qualification of the Indenture and
the Trustee.
(l) Except for this Agreement, the A/B Exchange Registration
Rights Agreement, and the Registration Rights Agreements and registration rights
with respect to common stock purchase warrants of TARC and TARC's 16% Senior
Subordinated Notes due 2003, none of TARC, TCR Holding and TransContinental has
entered into any pending agreement (i) to register its securities under the
Securities Act or (ii) other than as contemplated herein, to purchase or offer
to purchase any securities of TARC, TCR Holding, TransContinental or any of
their respective affiliates.
(m) Upon execution and delivery thereof, the Security
Agreement will create, in favor of the Trustee (as defined therein), for the
benefit of the holders of the Notes, a valid grant of a first priority security
interest in the Personal Property Collateral and the proceeds thereof and, upon
the filings or the recording required by the Security Agreement, the Trustee
will have, other than with respect to Permitted Liens, a first priority
perfected security interest in the Personal Property Collateral. Upon execution
and delivery thereof, the Company Mortgage will create, in favor of the New
Lenders, a valid grant of a security interest in the Real Property Collateral
and the proceeds thereof and, upon the filings or the recording required by such
instrument, the New Lenders will have, other than with respect to Permitted
Liens, a valid first priority perfected security interest in such collateral.
Upon the execution and delivery thereof,
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<PAGE> 11
the Construction Collateral and Disbursement Agreement will create, in favor of
the Trustee (as defined therein), for the benefit of the holders of the Notes, a
valid grant of a first priority security interest in that portion of the
Personal Property Collateral that the agreement purports to cover and the
proceeds thereof and, when the Trustee becomes identified in the records of a
securities intermediary, the Trustee will have a first priority perfected
security interest in such Personal Property Collateral.
(n) Schedule 2(n) contains a true and complete list of all
licenses, certificates, permits, consents, orders, authorizations and approvals
(collectively, "LICENSES") used in and material, individually or in the
aggregate, to the Business or operations of TARC, and, following consummation of
the transactions contemplated by this Agreement and the other Transaction
Documents (including the Reorganization), TCR Holding or TransContinental. TARC,
TCR Holding and TransContinental hold and will hold, as the case may be, all
material Licenses from governmental authorities that are necessary to the
conduct of Businesses and to enable all Real Property and Improvements (as
described in the Company Mortgage and including the Tank Storage Facility) to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used and as expected to be occupied and used upon completion of the
Refinery; such Licenses are in full force and effect and no proceeding has been
instituted or, to the knowledge of TARC, TCR Holding or TransContinental, is
threatened, pending or contemplated which in any manner affects or draws into
question the validity or effectiveness thereof; such Licenses contain no
restrictions that are or could be reasonably be expected to be materially
burdensome to the conduct of the Business; and to the knowledge of TARC, TCR
Holding and TransContinental, no event has occurred that permits (nor has an
event occurred that with notice or lapse of time or both would permit) the
modification, revocation or termination of such Licenses or that might result in
any other material impairment of the rights of TARC, TCR Holding or
TransContinental therein other than modifications, revocations or terminations
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(o) Schedule 2(o) contains a true and complete list of all the
patent rights, inventions, trademarks, service marks, trade names and copyrights
used in and material, individually or in the aggregate, to the Business or
operations of TARC and, following consummation of the transactions contemplated
by this Agreement and the other Transaction Documents (including the
Reorganization), TCR Holding and TransContinental (the "INTELLECTUAL PROPERTY").
No other Intellectual Property is used or is necessary to construct the Refinery
and to operate the Refinery and the other Transferred Assets, and none of TARC,
TCR Holding and TransContinental has received any written notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to, any Intellectual Property which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. There are no
restrictions on the direct or indirect transfer of any such Intellectual
Property or any Contract, or any interest therein, in respect of such
Intellectual Property held by TARC or to be held by TCR Holding or
TransContinental following consummation of the Reorganization.
(p) Each of the Improvements listed on Schedule 2(p) have been
sufficiently constructed in accordance with the Plans (as defined in the
Indenture and existing on the date hereof and the Closing Date), and each of the
Improvements comprising the Tank Storage Facility have been sufficiently
constructed so that, in each case, it may be operated for its intended purpose.
All water, gas, electrical, steam, compressed air, telecommunications, sanitary
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<PAGE> 12
and storm sewage lines and systems and other similar systems necessary for the
operation of the Real Property and Improvements are installed and operating and
are sufficient to enable the Real Property and Improvements to continue to be
used and operated in the manner currently being used and operated, such systems
as are anticipated to be installed and operated in accordance with the Plans
will, upon such installation in accordance with the Plans, be sufficient to
enable the Real Property and Improvements to be used and operated in the manner
currently contemplated upon completion of the Capital Improvement Program (as
defined in the Indenture, described in the Offering Circulars and existing on
the date hereof (the "CAPITAL IMPROVEMENT PROGRAM"), and none of TARC, TCR
Holding and TransContinental has any knowledge of any factor or condition that
could result in the termination or material impairment of the furnishing
thereof. No Improvement or portion thereof is or, upon consummation of the
Reorganization and completion of the Refinery in accordance with the Plans, will
be, dependent for its access, operation or utility on any land, building or
other Improvement not included in the Real Property or subject to easements,
servitudes or similar rights in favor of TARC.
(q) None of TARC, TCR Holding and TransContinental has
received any notice, or has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any Real Property or Improvements
or any part thereof or of any sale or other disposition of any Real Property or
Improvements or any part thereof in lieu of condemnation.
(r) No portion of any Real Property or Improvements has
suffered any material damage by fire or other casualty loss which has not
heretofore been completely repaired and restored to its original condition.
(s) As of the date hereof, no party to any reciprocal easement
agreement affecting any of the Real Property or Improvements is, and as of the
Closing Date, no such party will be, in material default thereunder and no event
has, or will have, occurred which, with the giving of notice or lapse of time or
both, would constitute a default thereunder. All maintenance payments with
respect to such reciprocal easement agreements which were due and payable prior
to the date hereof have been paid.
(t) TARC has provided the Beneficiary (as defined in the
Company Mortgage) a true, correct and complete listing of the real property tax
bills for the Real Property Collateral and all other real property owned by
TARC, TCR Holding or TransContinental for the current tax year and bills with
respect to any special assessments affecting any of such Real Property. All real
property taxes and special assessments with respect to such Real Property which
were due and payable prior to the date hereof have been paid in full. TARC has
not received any written notice of any special assessment action or proceeding
or real property tax reassessment with respect to the Real Property.
(u) The Real Property and Improvements are in compliance with
all building, fire, zoning, environmental and other ordinances and regulations
applicable thereto except to the extent that any failure to so comply could not
adversely affect the conduct of the Business or the completion or operation of
the Refinery.
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<PAGE> 13
(v) Except as disclosed in Schedule 2(v), the Real Property
and Improvements and the present use and condition thereof do not violate, in
any material respect, any applicable deed restrictions or other covenants,
restrictions or agreements, site plan approvals, zoning or subdivision
regulations or urban redevelopment plans applicable thereto, as modified by any
duly issued variances. Except as disclosed in Schedule 2(v), no building or
Improvement which is part of any of the Real Property encroaches, in any
material respect, upon any property owned by any adjacent landowner or upon any
real property interest held by any other individual, corporation, partnership,
limited liability company or other legal entity or association ("PERSON") with
respect to any of such real property.
(w) No notices of violation of law or municipal ordinances or
of federal, state, county or municipal or other governmental agency regulations,
orders or requirements relating to any of the Real Property or Improvements that
have not been completely cured have been entered or received by TARC, TCR
Holding or TransContinental, and TARC, TCR Holding and TransContinental have no
reason to believe that any such notice may or will be entered.
(x) All water, sewer, gas, electricity or telephone and other
utilities serving the Real Property and Improvements are supplied directly to
the Real Property and Improvements by facilities of public utilities except as
set forth in Schedule 2(x).
(y) Except as disclosed in both the Disclosure Statements
hereto and except for ordinary course business lawsuits which could not
reasonably be expected to result in a Material Adverse Effect, there are no
actions or proceedings (zoning or otherwise) or governmental investigations
pending, or, to the knowledge of TARC, TCR Holding or TransContinental,
threatened against or relating to any of such Persons or the property of such
Persons, nor, to the knowledge of TARC, TCR Holding and TransContinental, is
there any basis for such action.
(z) None of TARC, TCR Holding and TransContinental has any
knowledge of any federal, state, county or municipal plans to change any
highways or road systems in the vicinity of any of the Real Property or to
restrict or change access from any such highway or road to any of the Real
Property or of any pending or threatened condemnation of any of the Real
Property or Improvements or any parts thereof or of any plans for improvements
which might result in a special assessment against any of the Real Property or
Improvements.
(aa) The foundation, structure and roof of each building and
improvement comprising a part of the Real Property and Improvements are sound in
all material respects.
(bb) The construction of the Refinery and the operation of the
other Transferred Assets has been and, assuming the Refinery is completed and
operated in accordance with the Plans, will be (giving effect to any waivers or
variances which have been obtained and remain in effect or the obtaining of
those Licenses that appear on Schedule 2(j) under the caption "Permits in
Progress" (the "PENDING PERMITS")) in compliance with all applicable state,
federal and local laws, regulations, ordinances, standards, statutes, orders,
rules and other regulations, where the failure to comply therewith could have a
Material Adverse Effect or materially impair operation of the Refinery as it is
contemplated to be operated as described in the Disclosure Statements. Neither
TARC, TCR Holding nor TransContinental has any reason to believe that
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<PAGE> 14
the Pending Permits will not be approved by the relevant licensing authority.
Under applicable zoning and use laws, ordinances, rules and regulations, all
necessary subdivision approvals have been obtained for the construction of the
Refinery, except to the extent the failure to have or obtain any such approval
would not have a Material Adverse Effect.
(cc) As of October 31, 1998, the Company did not have
obligations outstanding in excess of $59,000,000 consisting of accounts payable
and other short-term obligations incurred in connection with the Capital
Improvement Program. TARC, TCR Holding and TransContinental estimate that as of
October 31, 1998, additional construction costs of $138,000,000 to $159,000,000
(in addition to such accounts payable) were required to complete the Capital
Improvement Program. TARC, TCR Holding and TransContinental have no reason to
believe that such estimate is inaccurate.
(dd) Except for matters specifically reasonably identifiable
in the Disclosure Documents or otherwise disclosed in writing to the TCW Funds
and the Purchaser as exceptions to this representation in this Agreement;
(i) each of TARC, TCR Holding and TransContinental
and, to the best knowledge of TARC, TCR Holding and TransContinental, any Person
for whom any of the foregoing are or may be responsible by law or Contract, is
in compliance with all federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern (as defined below), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"ENVIRONMENTAL LAWS"), which compliance includes, but is not limited to, (1)
compliance with all standards, schedules and timetables therein, and (2) the
possession of all Licenses required under the Environmental Laws with respect to
the operation of the business, property and assets of TARC, TCR Holding and
TransContinental or any such Person, and compliance with the terms and
conditions thereof and (3) any federal, state, local or foreign approvals
pursuant to any Environmental Laws that pertain or relate to the transactions
contemplated by this Agreement (including, without limitation, the issuance of
the Securities and the Reorganization) except for such failures to comply as
could not reasonably be expected to result in costs, fines, penalties or other
losses in excess of $200,000 individually or $1 million in the aggregate;
(ii) none of TARC, TCR Holding and TransContinental has
received any notice or claim (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that it is in
violation of any Environmental Law; none of TARC, TCR Holding and
TransContinental has any liability under any Environmental Law; and, to the best
knowledge of each of TARC, TCR Holding and TransContinental, there are no past
or present actions, activities, circumstances, conditions, events or incidents
that may be expected to prevent or interfere with full compliance by each of
TARC, TCR Holding and TransContinental (or any Person for whom TARC, TCR Holding
and TransContinental is or may be responsible by law or contract) with
applicable Environmental Laws in the future except for failures to comply (or
related notices of claims) as could not reasonably be expected to result in
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<PAGE> 15
costs, fines, penalties or other losses in excess of $200,000 individually or
$1 million in the aggregate;
(iii) there is no claim, action, cause of action,
investigation or notice (written or oral) by any Person alleging potential or
actual liability (including, without limitation, potential or actual liability
for investigating costs, clean up costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties) arising out
of, based upon, resulting from or relating to or under any Environmental Law,
including, without limitation, any such liability relating to the presence, or
release into the environment of any Material of Environmental Concern, or
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law (collectively, "ENVIRONMENTAL LIABILITY") pending, or to the
best knowledge of TARC, TCR Holding and TransContinental, threatened against
TARC, TCR Holding and TransContinental except for violations (or related notices
of claims) as could not reasonably be expected to result in costs, fines,
penalties or other losses in excess of $200,000 individually or $1 million in
the aggregate;
(iv) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any pollutants,
contaminants, chemicals, industrial, toxic or hazardous wastes, substances or
constituents, petroleum and petroleum products (or any by-product, waste or
constituent thereof), asbestos or asbestos-containing materials, or
polychlorinated biphenyls (collectively, "MATERIALS OF ENVIRONMENTAL CONCERN"),
that could reasonably be expected to form the basis of any Environmental
Liability against TARC, TCR Holding and TransContinental exceeding, in the case
of Environmental Liabilities relating to violations of Environmental Laws or as
could not reasonably be expected to result in costs, fines, penalties or other
losses in excess of $200,000 individually or $1 million in the aggregate;
(v) no real property or facility owned, operated,
leased, managed or controlled by TARC, TCR Holding or TransContinental, or, to
the best knowledge of each of TARC, TCR Holding and TransContinental, any
predecessor in interest for which TARC, TCR Holding or TransContinental could be
responsible, is listed or proposed for listing on the National Priorities List
or the Comprehensive Environmental Response, Compensation, and Liability
Information System pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, or on any comparable state or local
lists established pursuant to any Environmental Law;
(vi) there have been no releases (including, without
limitation, any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping, on-site or off-site) of Materials of Environmental Concern by TARC, TCR
Holding or TransContinental or, to the best knowledge of each of TARC, TCR
Holding and TransContinental, any predecessor in interest, for which TARC, TCR
Holding or TransContinental could reasonably be expected to incur liability
under or pursuant to any Environmental Law, at, on, under, from or into any
facility or real property owned, operated, leased, managed or controlled by
TARC, TCR Holding or TransContinental, and each of TARC, TCR Holding and
TransContinental has not incurred or reasonably could be expected to incur any
Environmental Liability for contamination at, on, under, from or into any
on-site or off-site locations where TARC, TCR Holding or TransContinental has
stored, disposed
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<PAGE> 16
or arranged for the disposal of Materials of Environmental Concern, except for
such releases as could not reasonably be expected to result in violations of
Environmental Laws that could not reasonably be expected to result in costs,
fines, penalties or other losses in excess of $200,000 individually or $1
million in the aggregate;
(vii) the condition of all underground and above-ground
storage tanks, other storage receptacles and related piping, that are located on
a facility or property owned, operated, leased, managed or controlled by TARC,
TCR Holding or TransContinental is such that each of TARC, TCR Holding and
TransContinental is not, and cannot reasonably be expected to become, subject to
any Environmental Liability exceeding, in the case of Environmental Liabilities
relating to violations of Environmental Laws or as could not reasonably be
expected to result in costs, fines, penalties or other losses in excess of
$200,000 individually or $1 million in the aggregate; and
(viii) there is no asbestos contained in or forming
part of any building, building component, equipment, structure or office space,
or otherwise stored in or on property, buildings or structures owned, operated,
leased, managed or controlled by TARC, TCR Holding or TransContinental and no
polychlorinated biphenyls ("PCBs") or PCB-containing items are used or stored at
any property, owned, operated, leased or managed for which removal, abatement or
cleanup is or may be required or for which such matters TARC, TCR Holding or
TransContinental could be liable, except for such removal, abatement or cleanup
as could not reasonably be expected to result in costs, fines, penalties or
other losses in excess of $200,000 individually or $1 million in the aggregate.
(ee) Each of TARC, TCR Holding, TransContinental and each
member of any affiliated group filing a consolidated return for Federal income
tax purposes or of which any of TARC, TCR Holding and TransContinental are
members and each member of any group filing a combined tax return for state or
local income tax purposes of which any of TARC, TCR Holding and TransContinental
are members (each of the foregoing, a "RELEVANT CORPORATION"), has timely filed
all Federal, state and local income and other material tax returns and notices
required to be filed by applicable law; no audit (except for audits disclosed in
Schedule 2(ee)), administrative proceedings or court proceedings are presently
pending with regard to any material potential Federal, state or local tax of any
nature; no Relevant Corporation has any knowledge of any tax deficiencies which
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; each Relevant Corporation has paid (within the time and
in the manner prescribed by law) all Federal, state and local taxes of any
nature which have been due on or prior to the date hereof, in each case except
for those not yet delinquent and those being contested in good faith by
appropriate proceedings diligently conducted for which each Relevant Corporation
has established on its books and records adequate reserves to pay all
outstanding tax liabilities in accordance with GAAP; no Relevant Corporation has
requested any extension of time within which to file any material tax return,
which return has not since been filed; the amounts currently set up as
provisions for taxes or otherwise by each Relevant Corporation on its books and
records are sufficient for the payment of all its unpaid Federal, state and
local taxes accrued through the dates as of which they speak, and for which such
Relevant Corporation may be liable in its own right, or as a transferee of the
assets of, or as successor to any other corporation, association, partnership,
joint venture or other entity or pursuant to Treasury Regulation
Section 1.1502-6, any successor thereto and any state or local counterpart
thereto;
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<PAGE> 17
(ff) TARC maintains (and in the future TCR Holding and
TransContinental will maintain) a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(gg) Immediately following consummation of the transactions
contemplated by this Agreement and the other Transaction Documents (including
without limitation, the issuance and sale of the Securities and the
Reorganization), TransContinental will, in the opinion of each of TARC, TCR
Holding and TransContinental, be Solvent. As used herein, the term "SOLVENT"
means, with respect to TransContinental on such date (i) the fair value and
present fair saleable value of TransContinental's assets would exceed
TransContinental's known liabilities (including known contingent liabilities),
(ii) TransContinental should be able to pay its debts and liabilities as they
become absolute and mature and (iii) the capital remaining in TransContinental
would not be unreasonably small for the Business.
(hh) None of TARC, TCR Holding or TransContinental is in
violation of any law, ordinance, governmental rule or regulation or court decree
to which it may be subject, which violation could have, individually or in the
aggregate, a Material Adverse Effect.
(ii) TARC, TCR Holding and TransContinental are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged and the Contracts governing such insurance may be freely assigned to
each of TCR Holding and TransContinental pursuant to the Reorganization; since
1991, TARC has not failed to obtain insurance coverage of any nature by reason
of the refusal of insurers to provide such coverage; and TARC does not have any
reason to believe that it, TCR Holding or TransContinental would be unable to
renew existing insurance coverage from similar insurers as may be necessary to
continue the Business at a cost that would not have, individually or in the
aggregate, a Material Adverse Effect.
(jj) Except as disclosed in each of the Disclosure Statements
as of their respective dates, as of the date hereof and as of the Closing Date,
none of TARC, TCR Holding and TransContinental had, has or will have, as the
case may be, violated any Federal, state or local law relating to discrimination
in employment nor any applicable wage or hour laws, nor any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder ("ERISA"), nor has TARC, TCR Holding or
TransContinental engaged in any unfair labor practice, which in each case could
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect. Except as disclosed in each of the Disclosure
Statements as of their respective dates, as of the date hereof and as of the
Closing Date, there was, is or will be, as the case may be (i) no unfair labor
practice complaint pending against TARC or, to the knowledge of TARC, TCR
Holding and TransContinental, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations board and
neither TARC, TCR Holding nor TransContinental is party to any collective
bargaining agreement, (ii) no significant strike, labor dispute, slowdown
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<PAGE> 18
or stoppage pending against, TARC, TCR Holding or TransContinental, or, to the
knowledge of, TARC, TCR Holding and TransContinental, threatened against any of
them and (iii) to the knowledge of, TARC, TCR Holding and TransContinental, no
union representation question existing, with respect to employees of TARC, TCR
Holding or TransContinental, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, individually or in the aggregate) such as would
not have a Material Adverse Effect, and, TARC, TCR Holding and TransContinental
have no reason to believe that the relationship of TARC, TCR Holding and
TransContinental with their employees is likely to have, individually or in the
aggregate, a Material Adverse Effect.
(kk) Subsequent to the respective dates as of which
information is given in each of the Disclosure Statements (i) TARC, TCR Holding
and TransContinental have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business except as described in or contemplated by this
Agreement or the Disclosure Statements; and (ii) there has not been any material
adverse change in the condition (financial or otherwise), results of operations,
business, prospects, net worth or assets of TARC, TCR Holding or
TransContinental, from the date as of which information is given in each of the
Disclosure Statements.
(ll) None of, TARC, TCR Holding, TransContinental and any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finders'
fees in connection with the issuance of the Securities or the consummation of
the Reorganization, other than to the New Lenders.
(mm) None of, TARC, TCR Holding, TransContinental nor any
agent thereof acting on behalf of any of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Securities and the use of the proceeds therefrom to violate Section 7 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or any
regulation promulgated thereunder, including, without limitation, Regulation T
(12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System, in
each case as in effect on the date hereof or as the same may hereafter be in
effect on the Closing Date.
(nn) Assuming that the representations, warranties and
covenants of the New Lenders and the Purchaser, respectively, contained in this
Agreement are true and correct and have been and will be complied with, no
registration of the Securities under the Securities Act or qualification of an
indenture under the Trust Indenture Act is required for the offer, sale and
delivery of any of the Securities to either the New Lenders or the Purchaser,
respectively, or the initial resale thereof in the manner contemplated by this
Agreement.
(oo) In connection with the offer and sale of the Securities,
none of TEC, TARC, TCR Holding or TransContinental have taken nor will take,
directly or indirectly, any action prohibited by Regulation M under the Exchange
Act.
(pp) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
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<PAGE> 19
(qq) PricewaterhouseCoopers, L.L.P. are independent
accountants with respect to TARC.
(rr) The financial statements of TARC and notes thereto
(including the related schedules, if any) incorporated by reference in each of
the Disclosure Statements as of their respective date and, as of the date hereof
presented or present, as the case may be, and as of the Closing Date will
present, fairly, in all material respects, the financial position of TARC and
the results of TARC's operations and cash flows purported to be shown thereby,
at the dates and for the periods indicated, and have been prepared in accordance
with GAAP throughout the periods indicated (except as otherwise indicated
therein and subject, in the case of interim statements, to normal year-end
adjustments); the unaudited pro forma condensed financial information included
in each of the Disclosure Statements as of its date and as of the date hereof
presented or present, as the case may be, and as of the Closing Date will
present, fairly in all material respects the information shown therein in
accordance with the adjustments and assumptions described therein, have been
prepared, in all material respects, in accordance with the rules and guidelines
of the Commission with respect to the financial data presented and give effect
to assumptions which have been made on a reasonable basis and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein; and the other financial, accounting and statistical
information and data related to TARC set forth in each of the Disclosure
Statements as of its date and as of the date hereof presented or present, as the
case may be, and as of the Closing Date will present fairly, in all material
respects, the information purported to be shown thereby at the respective dates
and for the respective periods to which they apply, and except as disclosed
therein, have been prepared on a basis consistent with the financial statements
and the books and records of the entities as to which such information is shown.
(ss) None of TARC, TCR Holding and TransContinental nor any of
their respective affiliates (as defined in Rule 501 under the Securities Act,
"AFFILIATE") has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale of
the Securities in a manner that would require the registration under the
Securities Act of the Securities as contemplated to be offered or (ii) engaged
in any form of general solicitation or general advertising in connection with
the offering of the Securities (as such terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
(tt) None of TARC, TCR Holding and TransContinental is, and
after giving effect to the offering and sale of the Securities and the
application of the proceeds therefrom will be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(uu) TARC, TCR Holding and TransContinental will consummate
the Reorganization immediately following consummation of the issuance and sale
of the Notes and the TCR Stock. The Reorganization has been or, as of the
Closing Date will have been, duly and validly consummated and the respective
capitalizations of TARC, TCR Holding and TransContinental will be as set forth
in Section 2(e) hereof.
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<PAGE> 20
(vv) The failures, exclusions and other exceptions to the
representations and warranties of TEC, TARC, TCR Holding and TransContinental,
taken as a whole, would not have a Material Adverse Effect.
(ww) None of TARC, TCR Holding and TransContinental nor any of
their respective affiliates does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes 1996, as amended, and all regulations promulgated thereunder.
(xx) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, which has been
served upon TARC and is now pending, or, to the knowledge of TARC, threatened,
against or affecting TARC, which is required to be disclosed in each of the
Disclosure Statements (other than as disclosed therein), or which might result
in any material adverse change in the condition (financial or otherwise) or in
the earnings, business affairs or business prospects of TARC, or which might
materially and adversely affect the properties or assets thereof, or which could
prohibit or limit in any way the consummation of any of the transactions
contemplated by this Agreement, the Indenture or the Notes or the other
Transaction Documents. All pending legal or governmental proceedings to which
TARC is a party or of which any of its property is the subject which are not
described in each of the Disclosure Statements or consisting of ordinary routine
litigation incidental to the Business, are, considered in the aggregate, not
material.
(yy) Neither TARC, TCR Holding or TransContinental nor any
of their respective officers, directors, employees or agents, acting on behalf
of any such corporations has at any time (A) made any contributions to any
candidate for political office in violation of law, or failed to disclose fully
any contribution to any candidate for political office in accordance with any
applicable statute, regulation or ordinance requiring such disclosure, (B) made
any payment to any local, state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by applicable law, (C) made any payment
outside the ordinary course of business to any purchasing or selling agent or
person charged with similar duties of any entity to which any of , TARC, TCR
Holding or TransContinental sells or from which any of, TARC, TCR Holding or
TransContinental buys products for the purpose of influencing such agent or
person to buy products from or sell products to any of, TARC, TCR Holding or
TransContinental, or (D) except as set forth in each of the Disclosure
Statements, engaged in any transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of, TARC, TCR
Holding or TransContinental, as the case may be.
(zz) the Master Services Agreement dated July 19, 1994 and
as amended effective January 1, 1995 and January 5, 1998, between TARC and
Southeast has been terminated and all amounts accrued or payable thereunder
(other than reimbursable expenses of Southeast) including without limitation,
all administrative fees payable pursuant to Section 3 thereof, have been
forgiven or otherwise extinguishable and do not constitute a liability of any of
TARC, TCR Holding or Transcontinental as of the date hereof.
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<PAGE> 21
Representations and warranties of TARC, TCR Holding and TransContinental made to
their "KNOWLEDGE" shall be understood for purposes of this Agreement to be made
to the knowledge after due inquiry of the executive officers and directors and,
for purposes of Section 2(dd), the environmental manager of TARC, TCR Holding or
TransContinental, as the case may be, unless otherwise stated in this Agreement.
3. Offering; Restrictions on Transfer. The New Lenders and the
Purchaser have advised TARC, TCR Holding and TransContinental that the New
Lenders and the Purchaser may make an offering of the Securities purchased by
the New Lenders and the Purchaser after this Agreement is entered into as in the
New Lenders' and the Purchaser's sole judgment is advisable. Each New Lender and
Purchaser hereby, severally and not jointly, represents and warrants to, and
agrees with, TARC, TCR Holding and TransContinental that:
(a) the Securities have not been registered under the
Securities Act and may not be offered or sold except pursuant to an effective
registration statement or an exemption from the registration requirements of the
Securities Act; such New Lender or Purchaser (i) has not and, absent an
effective registration statement permitting resale of such Securities by such
New Lender or Purchaser, will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) has and, absent an effective registration statement permitting
resale of such Securities by such New Lenders or Purchaser, will solicit offers
for the Securities only from, and will offer the Securities only to, (A) persons
who it reasonably believes to be "qualified institutional buyers" within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A or (B) a limited number of other institutional
investors reasonably believed by such New Lenders or Purchaser to be "accredited
investors" as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act and, in the case of such purchaser described in this clause
(ii)(B), provide the obligor on the Notes a letter in substantially the form of
Exhibit A to this Agreement; and
(b) it is either a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act or an "accredited investor" within
the meaning of Rule 501 under the Securities Act, and, if an accredited
investor, will provide TARC prior to the Closing Date with a letter in the form
of Exhibit A attached to this Agreement.
The New Lenders and the Purchaser understand that TARC, TCR Holding and
TransContinental, and, with respect to their opinions delivered pursuant to this
Agreement, counsel to TARC and counsel to the New Lenders and the Purchaser,
will rely upon the accuracy and truth of the foregoing representations,
warranties and agreements and the New Lenders and the Purchaser hereby consent
to such reliance.
4. Purchase and Delivery; Commission. TARC and
TransContinental agree to sell to the New Lenders in the amounts set forth on
Schedule I and the Purchaser in the amount set forth on Schedule IA and such
parties, upon the basis of the representations and warranties herein contained,
but subject to the conditions hereinafter stated, agree to purchase in the
aggregate (i) $150,000,000 in aggregate principal amount of Notes from TARC,
(ii) 240,000 shares of TCR Voting Common Stock, 6,000,000 shares of Class B
Preferred Stock, 3,300,000
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<PAGE> 22
shares of Class C Preferred Stock, 8,700,000 shares of Class D Preferred Stock,
and 17,760,000 shares of Class E Preferred Stock, in each case from TARC, and
(iii) 6,000,000 shares of TransContinental Preferred Stock from
TransContinental.
Payment for the Securities shall be made to the order of TARC
and TransContinental by wire transfer of immediately available funds to the
Construction Disbursement Account (as defined in the Indenture) and such other
accounts as TARC, TransContinental and the New Lenders and the Purchaser shall
agree upon, at 8:00 a.m. New York City time on December 15, 1998 or at such
other time and date as TARC, TransContinental, the New Lenders and the Purchaser
may agree upon in writing, such time and date being herein called the "CLOSING
DATE," against delivery of the Securities at the offices of Milbank, Tweed,
Hadley & McCloy, 350 Park Avenue, 10th Floor, New York, New York 10022, or such
other location as the New Lenders or (with respect to the Securities to be
purchased by the Purchaser) the Purchaser, shall designate, at 8:00 a.m., New
York City time on the Closing Date. Subject to Section 5(y), TARC shall receive
$146,971,950 in payment for the Securities sold by it (including the TCR Stock
and the Notes) to the New Lenders and the Purchaser and TransContinental shall
receive $4,098,000 in payment for the TransContinental Preferred Stock sold by
it to the New Lenders.
It is understood that each certificate evidencing Securities
shall bear a legend to the following effect, unless the issuer of such Security
and, in the case of the Notes, the Trustee determine otherwise consistent with
applicable law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE
PROVIDED UNDER RULE 144(K) UNDER THE SECURITIES ACT AS PERMITTING
RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE
ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE
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<PAGE> 23
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A) (1), (2), (3)
OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER
OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S, THE TRUSTEE'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO THE COMPANY AND THE TRANSFER AGENT,
AND IN THE CASE OF THE NOTES, THE TRUSTEE, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR.
In addition certificates representing shares of the TCR Non-Voting Preferred
Stock (other than shares of Class E Preferred Stock) shall bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS OF (I) THE REPURCHASE RIGHTS AGREEMENT DATED AS OF DECEMBER
15, 1998 (THE "REPURCHASE RIGHTS AGREEMENT"), BY AND AMONG THE ISSUER,
TRANSAMERICAN ENERGY CORPORATION AND CERTAIN STOCKHOLDERS OF THE ISSUER
AND (II) THE STOCKHOLDERS AGREEMENT BY AND AMONG THE ISSUER,
TRANSAMERICAN REFINING CORPORATION AND THE STOCKHOLDERS OF THE ISSUER
(THE "STOCKHOLDERS AGREEMENT"). THE ISSUER WILL FURNISH TO THE RECORD
HOLDER HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST TO THE ISSUER AT ITS
PRINCIPAL PLACE OF BUSINESS OR ITS REGISTERED OFFICE A COPY OF THE
REPURCHASE RIGHTS AGREEMENT AND THE STOCKHOLDERS AGREEMENT. A
TRANSFEREE, PLEDGEE OR MORTGAGEE OF THE SECURITIES REPRESENTED BY THE
CERTIFICATE SHALL BE DEEMED TO HAVE NOTICE OF AND TO BE BOUND BY THE
TERMS OF THE REPURCHASE RIGHTS AGREEMENT AND THE STOCKHOLDERS
AGREEMENT.
Certificates representing the Class E Preferred Stock shall also bear the
following legend:
THE SECURITIES REPRESENTED BY THE CERTIFICATE ARE SUBJECT TO
THE TERMS OF THE STOCKHOLDERS AGREEMENT BY AND AMONG THE ISSUER,
TRANSAMERICAN REFINING CORPORATION AND THE STOCKHOLDERS OF THE ISSUER
(THE "STOCKHOLDERS AGREEMENT"). THE ISSUER WILL FURNISH TO THE RECORD
HOLDER HEREOF WITHOUT
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<PAGE> 24
CHARGE UPON WRITTEN REQUEST TO THE ISSUER AT ITS PRINCIPAL PLACE OF
BUSINESS OR ITS REGISTERED OFFICE A COPY OF THE STOCKHOLDERS AGREEMENT.
A TRANSFEREE, PLEDGEE OR MORTGAGEE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE SHALL BE DEEMED TO HAVE NOTICE OF AND TO BE BOUND BY
THE TERMS OF THE STOCKHOLDERS AGREEMENT.
Certificates representing the TransContinental Preferred Stock shall bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS OF THE STOCKHOLDERS AGREEMENT BY AND AMONG THE ISSUER, TCR
HOLDING CORPORATION AND THE HOLDERS OF THE SECURITIES (THE
"STOCKHOLDERS AGREEMENT"). THE ISSUER WILL FURNISH TO THE RECORD HOLDER
HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST TO THE ISSUER AT ITS
PRINCIPAL PLACE OF BUSINESS OR ITS REGISTERED OFFICE A COPY OF THE
STOCKHOLDERS AGREEMENT. A TRANSFEREE, PLEDGEE OR MORTGAGEE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE DEEMED TO HAVE
NOTICE OF AND TO BE BOUND BY THE TERMS OF STOCKHOLDERS AGREEMENT.
TARC shall pay any transfer taxes payable in connection with
the initial delivery to the New Lenders and the Purchaser of the Securities.
5. Conditions to Closing. The obligation of the New Lenders
and the Purchaser to purchase and pay for the Securities will be subject to the
accuracy of the representations and warranties on the part of TEC, TARC, TCR
Holding and TransContinental herein, to the accuracy of the statements of the
authorized representatives of TEC, TARC, TCR Holding and TransContinental made
in any certificates pursuant to the provisions hereof, to the performance by
TEC, TARC, TCR Holding and TransContinental of their respective obligations
hereunder and to the following additional conditions precedent:
(a) Subsequent to the date hereof or, if earlier, the dates as
of which information is given, in each of the Disclosure Statements there shall
not have been any change which, in the judgment of the New Lenders or the
Purchaser, has or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect such that it is impractical or inadvisable
to purchase the Securities. No stop order or other similar decree preventing the
use of either of the Disclosure Statements, or any order asserting that the
transactions contemplated hereunder (including, without limitation, the issuance
of the Securities and the Reorganization) are subject to the registration
requirements of the Securities Act or "Blue Sky" laws of any jurisdiction has
been issued and no proceeding for that purpose has commenced or is pending or,
to the knowledge of TARC, TCR Holding and TransContinental is contemplated.
(b) TARC, TCR Holding and TransContinental, respectively,
shall have furnished to the New Lenders and the Purchaser certificates, signed
by the Chief Executive Officer and the principal financial officer of each of
TARC, TCR Holding and TransContinental and a certificate of the Vice President,
Chief Financial Officer and Secretary of TEC, in each
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<PAGE> 25
case dated the Closing Date, to the effect that the signers of such certificate
have carefully examined each of the Disclosure Statements, the Indenture, this
Agreement and the other Transaction Documents and that:
(i) the representations and warranties of TEC, TARC,
TCR Holding and TransContinental that are qualified as to materiality in this
Agreement are true and correct, and those not so qualified are true and correct
in all material respects, on and as of the Closing Date with the same effect as
if made on the Closing Date and TEC, TARC, TCR Holding and TransContinental have
complied with all the agreements and satisfied all the conditions in this
Agreement on their respective parts to be performed or satisfied at or prior to
the Closing Date;
(ii) in the case of the certificate to be provided by
TARC, attached to such certificate is a copy of the Plans, which consist of (a)
the plans and specifications that describe and show the proposed expansion and
modification of the Refinery and (b) a current budget that accurately sets forth
the expected budget for such activities; and
(iii) in the case of the certificate to be provided by
TARC, since the date of the most recent financial statements included in each of
the Disclosure Statements, there has been no material adverse change in the
condition (financial or otherwise), results of operations, business, prospects,
net worth or assets of TARC, whether or not arising from transactions in the
ordinary course of business, except as set forth in the Disclosure Statements;
and
(c) TARC shall have furnished to the New Lenders and the
Purchaser the opinion of Gardere & Wynne, L.L.P, counsel for TARC, TCR Holding
and TransContinental dated the Closing Date, to the effect set forth on Schedule
5(c).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
laws of the State of New York, the State of Texas, the corporation laws of the
State of Delaware, or the laws of the United States of America, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the New Lenders and the Purchaser and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of TEC, TARC, TCR Holding and TransContinental and public officials.
In addition such counsel shall state that such counsel
assisted in the preparation of each of the Disclosure Statements and no facts
have come to the attention of such counsel that lead such counsel to believe
that each of the Disclosure Statements (excluding financial statements and other
financial and statistical data contained therein, as to which such counsel need
not express an opinion) as of its date and as of the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) TARC shall have furnished to the New Lenders and the
Purchaser the opinion of Campbell, McCranie, Sistrunk, Anzelmo & Hardy, a
Professional Law Corporation,
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counsel for TARC, TCR Holding and TransContinental dated the Closing Date, to
the effect set forth on Schedule 5(d).
(e) TARC, TCR Holding and TransContinental shall have received
on or before the Closing Date (i) all approvals, permits and licenses required
for work completed as of the Closing Date on the Refinery and (ii) a form of
final title policy with respect to the land naming the Trustee as named insured
in an amount not less than $350,000,000 and otherwise in form reasonably
satisfactory to the New Lenders.
(f) TARC and the Trustee shall have executed and delivered the
Indenture in substantially the form of the draft dated the date hereof with such
changes as may be reasonably satisfactory to the New Lenders and the Purchaser,
and the Indenture shall be in full force and effect.
(g) TARC shall have furnished to the New Lenders and the
Purchaser on the date hereof and on the Closing Date, a letter of
PricewaterhouseCoopers L.L.P., as independent auditors to TARC, addressed to the
New Lenders and the Purchaser and dated the date hereof or the Closing Date as
the case may be, in form and substance satisfactory to the New Lenders and the
Purchaser, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
consolidated financial statements, summary and selected consolidated financial
information and certain other financial information contained in each of the
Disclosure Statements.
(h) The Notes shall be eligible for trading on the Private
Offerings, Resales and Trading through Automated Linkages Market ("PORTAL")
system of the NASD.
(i) TARC, TCR Holding, TransContinental, the Trustee and the
Depository Trust Company shall have executed and delivered a letter of
representations with respect to the Notes sufficient to register the Notes in
global form.
(j) TARC, TCR Holding and TransContinental shall have executed
and delivered this Agreement and the other Transaction Documents to which they
are party, and this Agreement and such other Transaction Documents shall be in
full force and effect.
(k) TARC, TCR Holding and TransContinental shall have filed
such UCC Financing Statements, UCC Assignments and UCC Releases with the
Secretary of State or other appropriate authority of the appropriate
jurisdictions as is required to perfect the security interest in the Personal
Property Collateral that is granted by the Security Agreement and as such
Security Agreement is assigned and assumed pursuant to the TARC Assumption
Agreement and the TransContinental Assumption Agreement in a form and otherwise
in a manner satisfactory to the New Lenders and the Purchaser.
(l) TARC shall have recorded the Company Mortgage, and such
assignment and assumption agreements as may be necessary in connection with the
transfer of the Real Property pursuant to the Reorganization and the assignment
to and assumption by TCR Holding and TransContinental, respectively, of the
obligations under the Company Mortgage, with the appropriate authorities of the
appropriate jurisdiction to create a first priority lien on the Real
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<PAGE> 27
Property Collateral granted by Company Mortgage in a form and otherwise in a
manner satisfactory to the New Lenders.
(m) The Trustee shall have become identified in the records of
a securities intermediary as the person having a security entitlement against
the securities intermediary (as set forth in the New York UCC Section 8-102(7))
with respect to the Personal Property Collateral in which a security interest is
granted under the Construction Collateral and Disbursement Agreement in a manner
sufficient to create a first priority perfected security interest in such
Personal Property Collateral.
(n) TARC, TCR Holding and TransContinental shall have
furnished to the New Lenders and the Purchaser an accurate certificate dated as
of the Closing Date, in form and substance satisfactory to the New Lenders and
the Purchaser, signed by the Secretary or an Assistant Secretary of each of
TARC, TCR Holding and TransContinental, and attaching Articles or Certificates
of Incorporation, bylaws, resolutions, a specimen of the Notes and a specimen of
each of the other Securities and such other documents and records as the New
Lenders and the Purchaser may request.
(o) TARC, TCR Holding and TransContinental shall have paid the
fees and expenses set forth in Section 7.
(p) The holders of at least 95% of TARC's 16% Subordinated
Notes due 2003, assuming the consent of the TCW Funds with respect to all such
notes held by them shall have consented to the transactions contemplated hereby
and by the other Transaction Documents (including, without limitation, the
issuance of the Securities and the Reorganization), the holders of the Tank
Storage Bonds shall have consented to the assignment by TARC of the assets
securing such securities to, and the assumption of the obligations with respect
to such securities by, TCR Holding and to the assignment by TCR Holding to
TransContinental of such obligations, the holders of at least 95% of each of
TEC's 11 1/2% Senior Secured Notes due 2002 and 13% Senior Secured Discount
Notes due 2002 shall have consented to the release of their security interest in
the Personal Property Collateral and the Real Property Collateral and to the
transactions contemplated hereby (including, without limitation, the issuance of
the Securities and the Reorganization), consent agreements, supplemental
indentures and supplemental warrants in form and substance satisfactory to the
New Lenders and the Purchaser shall have been executed and delivered to the New
Lenders and the Purchaser with respect to such obligations and outstanding
warrants issued by TARC and all other consents of third parties necessary to
consummate the transactions contemplated hereby and by the other Transaction
Documents (including, without limitation, the issuance of the Securities and the
Reorganization) shall have been obtained.
(q) TransTexas Gas Corporation, a Delaware corporation
("TTG"), shall have transferred to the trustee under the indenture governing the
TEC Notes sufficient funds to pay in full the interest payment due December 15,
1998 (less $8,100,000 which shall consist of $2,100,000 of accounts payable paid
by TARC to TTG and $6,000,000 in proceeds from an anticipated intercompany loan
from TEC to TTG) on its senior secured promissory note in favor of TEC in the
aggregate principal amount of $450,000,000 to the indenture trustee thereunder
and there shall be no Event of Default that has occurred and is continuing under
the TEC Notes.
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<PAGE> 28
(r) TARC shall have provided, or caused to be provided, for
each of TCR Holding and TransContinental, through obtaining new policies or
through extension of existing policies, insurance against loss or damage of the
kinds that are set forth in the Indenture or the Mortgage, which insurance shall
extend for a period of not less than one month from the Closing Date and which
insurance, to the extent it extends in excess of one month after the Closing
Date, is cancelable at the option of TCR Holding or TransContinental, as the
case may be, at no additional cost.
(s) All of the capital stock of TCR Holding issued prior to
the Closing Date shall have been redeemed and TCR Holding and TransContinental
shall have the authorized capitalization set forth in Section 2(e).
(t) TARC, TCR Holding and TransContinental shall have each
irrevocably committed to the consummation of the Reorganization pursuant to
Transaction Documents in form and substance satisfactory to the New Lenders and
the Purchaser.
(u) TTG shall have entered into a lease with TARC, in form and
substance satisfactory to the New Lenders and the Purchaser and which is freely
assignable to both TCR Holding and TransContinental pursuant to the
Reorganization, with respect to the chief executive office of TARC located at
1300 North Sam Houston Parkway East, Suite 200, Houston, Texas.
(v) The Disclosure Statements shall have been printed and
copies, in the quantity requested by the Purchaser shall have been made
available to the Purchaser not later than 12:00 noon (New York time) on the date
of this Agreement or such later date and time as the Purchaser may approve.
(w) The rights of TARC under the escrow of $5,000,000 to
secure environmental indemnities made by TARC in favor of GATX Terminals
Corporation shall have been transferred to TCR Holding and TransContinental
pursuant to documentation satisfactory to the New Lenders and the Purchaser.
(x) The title agent, upon receipt of funds necessary to
satisfy obligations secured by materialmen's and mechanics' Liens, shall have
delivered the title insurance policy referred to in 5(e) above, without
exceptions taken for any mechanic's or materialmen's Liens.
(y) TARC shall have paid to the TCW Funds a fee of $5,000,000
for their services as lead investors; provided, that the TCW Funds may elect to
deduct such fee from the purchase price to be paid for the Notes by the TCW
Funds.
(z) Jefferies shall have received an opinion of counsel from
Skadden, Arps, Slate, Meagher & Flom reasonably satisfactory to it.
(aa) TARC shall have paid the fees and expenses of the counsel
and consultants for the New Lenders and the Purchaser.
It shall be a further condition to the obligation of the New
Lenders and the Purchaser to purchase the TransContinental Preferred Stock that
TARC, TCR Holding and TransContinental shall have consummated the
Reorganization. In addition, TARC, TCR
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<PAGE> 29
Holding and TransContinental will furnish the New Lenders and the Purchaser at
Closing such additional opinions, certificates, letters and documents as the New
Lenders or the Purchaser may reasonably request.
6. Covenants of Issuers and TEC. In further consideration of
the agreements of the New Lenders and the Purchaser herein obtained, each of
TARC (with respect to its own actions only), TCR Holding and TransContinental
covenants and agrees with the New Lenders and the Purchaser as follows:
(a) To furnish the New Lenders and the Purchaser, without
charge, during the period mentioned in paragraph (c) below, as many copies of
each of the Disclosure Statements as the New Lenders and the Purchaser may
reasonably request;
(b) During the period mentioned in paragraph (c) below, before
amending or supplementing each of the Disclosure Statements, to furnish the New
Lenders and the Purchaser a copy of each such proposed amendment or supplement,
and to make no such proposed amendment or supplement to which the New Lenders or
the Purchaser reasonably object;
(c) If, during such period after the date hereof and prior to
the date on which all of the Securities have become subject to a registration
statement permitting resale by the New Lenders or the Purchaser, any event shall
occur as a result of which either of the Disclosure Statements as then amended
or supplemented would, in the judgement of TARC, TCR Holding, TransContinental
or counsel to the New Lenders or the Purchaser, include any untrue statement of
a material fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary to amend or
supplement either of the Disclosure Statements to comply with applicable law,
promptly to prepare and furnish, at its own expense, to the New Lenders and the
Purchaser, either an amendment or supplement to each of the Disclosure
Statements that corrects such statement or omission or effects such compliance;
(d) During the period mentioned in paragraph (c) above, to
advise the New Lenders and the Purchaser promptly of the happening of any event
as a result of which either of the Disclosure Statements would, in the opinion
of TARC, TCR Holding or TransContinental, include any untrue statement of a
material fact, or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(e) To use reasonable efforts to qualify the Securities for
offer and sale under the securities laws of such jurisdictions in the United
States as the New Lenders or the Purchaser may reasonably request, to file such
statements and reports as may be required by the laws of each such jurisdiction
in which the Securities have been so qualified, and to supply the New Lenders
and the Purchaser with such information as is necessary for the determination of
the legality of the Securities for investment under the laws of such
jurisdictions as the New Lenders or the Purchaser may request; except that in no
event shall TARC, TCR Holding or TransContinental be obligated in connection
therewith to qualify as a foreign corporation, or to execute a general consent
to service of process;
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<PAGE> 30
(f) So long as any Securities are outstanding, to provide the
Purchaser, Trustee and holders of any of the Securities copies of its annual
reports and of the information, documents and reports that TARC or
TransContinental, as applicable, is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act within 15 days after it
files them with the Commission and if, during any period in which Securities are
outstanding, TARC or TransContinental is not obligated to file annual reports,
documents or other reports with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act, to furnish to the Purchaser, Trustee and holders of any
Securities the same such annual reports, documents or other reports as if TARC
and TransContinental were so subject. In addition upon the request of any holder
of Securities or any prospective purchaser of the Securities designated by such
holder, TARC (to the extent it is still obligated on the Notes), TCR Holding and
TransContinental, as applicable, shall supply to such holder or such prospective
purchaser the information required under Rule 144A under the Securities Act,
unless TARC or TransContinental, as applicable, is then subject to Section 13 or
15(d) of the Exchange Act and reports filed thereunder satisfy the information
requirements of Rule 144A(d)(4) as then in effect;
(g) If requested by the New Lenders or the Purchaser, to use
all reasonable efforts to maintain the Securities as PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in the PORTAL market through such time as a registration statement
covering the Notes shall have become effective or all of the Notes shall have
become eligible for resale without the requirement that such resales comply with
the volume or manner of sale restrictions of Rule 144 of the Act;
(h) To hold the New Lenders and the Purchaser harmless against
any documentary, stamp or similar transfer or issue tax, including any interest
and penalties, on the issue, sale and delivery of the Securities in accordance
with the terms of this Agreement or as contemplated by the Disclosure Statements
and on the execution and delivery of this Agreement and the other Transaction
Documents which are or may be required to be paid under the laws of the United
States or any political subdivision or taxing authority thereof or therein;
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) that is or will be integrated with the sale of the Securities in a manner
that would require the registration of the Securities under the Securities Act;
(j) Not to solicit any offer to buy, offer or sell the
Securities by means of any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act other than to comply with clause (k);
(k) To (i) consummate the Reorganization immediately following
the issuance of the Notes and the sale of the TCR Stock hereunder and (ii)
comply with all of the terms and provisions of the A/B Exchange Registration
Rights Agreement and the other Transaction Documents;
(l) For a period of five years following the Closing Date, to
furnish to the New Lenders and the Purchaser copies of any annual reports,
quarterly reports and current
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<PAGE> 31
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other documents,
reports and information as shall be furnished by TARC, TCR Holding or
TransContinental to the Trustee or to the holders of the Securities pursuant to
the Indenture;
(m) To deposit not less than $60.3 million of the proceeds
from the sale of the Securities into the Construction Collateral and
Disbursement Account; and
(n) Not, for a period of 90 days from the date of the Offering
Circular, without the prior written consent of the Purchaser, directly or
indirectly, offer, sell, grant any option to purchase or otherwise dispose of,
any securities of TARC, TCR Holding or TransContinental.
(o) TransContinental shall deliver to the TCW Funds:
(i) as soon as available and in any event within 15
days after the end of each month and 60 days after the end of each quarterly
fiscal period of each fiscal year of TCR Holding and TransContinental (other
than the fourth fiscal quarter), consolidated and consolidating statements of
income, retained earnings and cash flow of each of TCR Holding and
TransContinental and their respective consolidated subsidiaries for such period
and for the period from the beginning of the respective fiscal year to the end
of such period, and the related consolidated and consolidating balance sheets of
each of TCR Holding and TransContinental and its consolidated subsidiaries as at
the end of such period, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the corresponding
period in the preceding fiscal year, accompanied by a certificate of a senior
financial officer of TCR Holding or TransContinental, as the case may be, which
certificate shall state that those consolidated financial statements fairly
present the consolidated financial condition and results of operations of TCR
Holding or TransContinental, as the case may be, and its consolidated
subsidiaries, and those consolidating financial statements fairly present the
respective individual unconsolidated financial condition and results of
operations of TCR Holding or TransContinental, as the case may be, and of each
of their respective consolidated subsidiaries, in each case in accordance with
GAAP, as at the end of, and for, such period (subject to normal year-end audit
adjustments);
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of TCR Holding or TransContinental, as
the case may be, consolidated and consolidating statements of income, retained
earnings and cash flow of TCR Holding or TransContinental, as the case may be,
and its consolidated subsidiaries for such fiscal year and the related
consolidated and consolidating balance sheets of TCR Holding or
TransContinental, as the case may be, and its consolidated subsidiaries as at
the end of such fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding fiscal
year, and accompanied by a certificate of a senior financial officer of TCR
Holding or TransContinental, as the case may be, which certificate shall state
that those consolidating financial statements fairly present the respective
unconsolidated financial condition and results of operations of TCR Holding or
TransContinental, as the case may be, and of each of its consolidated
subsidiaries, in each case in accordance with GAAP as at the end of, and for,
such fiscal year.
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<PAGE> 32
(p) In addition, TARC agrees to offer 2,640,000 shares of
Class E Preferred Stock to holders of certain of TARC's outstanding common stock
purchase warrants in exchange for such warrants.
(q) So long as any Notes are outstanding, TEC shall forbear,
regardless of any default or event of default under the TEC Swingline Note, from
exercising its rights under any pledge or other security agreement or
arrangement to acquire, whether by foreclosure or otherwise, upon issued and
outstanding shares of common stock, par value $.01 per share, of
TransContinental unless, at the time of such proposed exercise of its rights,
either the trustee under the TEC Indenture or the holders of the TEC Notes shall
be exercising their rights to foreclose upon the collateral securing such TEC
Notes. TEC acknowledges that its covenant in this Section 6(q) is a material
inducement to the New Lenders and the Purchaser to purchase the Securities and
that the New Lenders and the Purchaser are relying on such covenant in
purchasing the Securities.
7. Expenses and Fees.
(a) Whether or not this Agreement becomes effective or is
terminated or the sale of the Securities to the New Lenders and the Purchaser is
consummated, TARC agrees to pay (to the extent not paid by TARC from the
proceeds of the issuance of the Securities) (i) the costs incident to the
authorization, issuance, sale and delivery of the Securities, the consummation
of the Reorganization and any taxes payable in either connection; (ii) the costs
(including, without limitation, fees and expenses of the accountants and counsel
for TARC, TCR Holding and TransContinental) incident to the preparation,
printing and delivery and distribution to the New Lenders and the Purchaser of
each of the Disclosure Statements and any amendments and exhibits thereto, as
provided in this Agreement; (iii) the costs of delivery and shipping of this
Agreement, the Disclosure Statements and the other Transaction Documents,
including, but not limited to any "Blue Sky" memoranda; (iv) the fees payable to
rating agencies in connection with the rating of the Securities; (v) the fees
and expenses (including fees and disbursements of counsel to the New Lenders and
the Purchaser in connection therewith) of qualifying the Securities for offering
and sale under the securities laws of the several jurisdictions; (vi) any
applicable filing fees associated with filings made with the NASD in connection
with the PORTAL application for the Notes; (vii) the costs and charges of the
trustees and any paying agent, stock transfer agent or registrar; (viii) all
other costs and expenses incident to the performance of its obligations
hereunder or under the other Transaction Documents for which provision is not
otherwise made in this Section 7 and (ix) all costs and expenses of the New
Lenders and the Purchaser incident to the transactions contemplated hereby and
in each of the other Transaction Documents.
(b) On the Closing Date, TARC, TCR Holding and
TransContinental jointly and severally agree to (i) reimburse Jefferies for its
expenses (including, without limitation, the fees and expenses of its legal
counsels) and (ii) pay to the TCW Funds a structuring fee in the amount of
$1,500,000. In addition, TARC will deliver 3,000,000 shares of Class B
Non-Voting Common Stock to the TCW Funds as an additional structuring fee on the
Closing Date.
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<PAGE> 33
8. Indemnification and Contribution.
(a) Each of TEC, TARC, TCR Holding and TransContinental
agrees, jointly and severally, to indemnify and hold harmless the TCW Funds and
their respective affiliates, the New Lenders and the Purchaser, respectively,
their respective officers, authorized representatives and directors and each
person, if any, who controls any of the TCW Funds, the New Lenders or the
Purchaser, respectively, within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, TCW, the New Lenders or the Purchaser, respectively,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any reasonable legal or other expenses actually incurred by
the New Lenders or the Purchaser, respectively, or any such controlling or
affiliated person in connection with defending or investigating any such action
or claim) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in either of the
Disclosure Statements and any amendments or supplements thereto, or in any "blue
sky" application or other document executed by TARC, TCR Holding or
TransContinental in connection with any such application procedure or based upon
written information furnished by TARC, TCR Holding or TransContinental in
connection with the purchase of securities hereunder specifically to be filed in
any state or other jurisdiction in order to qualify any or all the Securities
under the securities laws thereof or specifically to be filed with the
Commission or any securities association or securities exchange (each, an
"APPLICATION"), or caused by, arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission relating to the New Lenders or
the Purchaser, respectively, made in either of the Disclosure Statements, or any
Application, made in reliance upon and in conformity with information relating
to the New Lenders or the Purchaser, respectively, furnished to TARC, TCR
Holding or TransContinental in writing by the New Lenders or the Purchaser,
respectively, expressly for use therein. The parties hereto agree that the only
statements made in the Disclosure Statements, or any Application, furnished in
writing by the New Lenders or the Purchasers expressly for use therein as those
set forth in such Disclosure Statements under the heading "Plan of Distribution"
in the first paragraph, third paragraph, fourth paragraph, fifth paragraph and
sixth paragraph (third sentence only) thereof;
(b) Each of TEC, TARC, TCR Holding and TransContinental
further agrees, jointly and severally, to indemnify and hold harmless the New
Lenders and the Purchaser, respectively, their respective officers, authorized
representatives and directors and each person, if any, who controls the New
Lenders or the Purchaser, respectively, within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, or is under common
control with, or is controlled by, the New Lenders or the Purchaser,
respectively, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any reasonable legal or other
expenses actually incurred by the New Lenders or the Purchaser, respectively, or
any such controlling or affiliated person in connection with defending or
investigating any such action or claim) caused by, arising out of or based upon
(i) a breach by any of TEC, TARC, TCR Holding and TransContinental of any
representation, warranty, covenant or agreement in this Agreement or (ii) any
action taken or inaction on the part of any of TEC, TARC, TCR Holding or
TransContinental in connection with the issuance and sale of the Securities or
the
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<PAGE> 34
consummation of the Reorganization; provided that neither TEC's nor TARC's
indemnity shall extend to losses claims, damages and liabilities breaches caused
by, arising out of or based upon breaches by TCR Holding and TransContinental,
which occur as a result of action taken or inaction after the Closing Date).
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be instituted
or asserted against any person in respect of which indemnity may be sought
pursuant to either of paragraph (a) or (b) above, such person (hereinafter
called the "INDEMNIFIED PARTY") shall promptly notify the person against whom
such indemnity may be sought (hereinafter called the "INDEMNIFYING PARTY") in
writing; provided, however, that the failure to so notify the indemnifying party
shall not relieve it of any obligation or liability that it may have hereunder
or otherwise (unless and only to the extent that such failure directly results
in the loss or compromise of any material rights or defenses by the indemnifying
party and the indemnifying party was not otherwise aware of such action or
claim). The indemnifying party, upon request of the indemnified party, shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others that the indemnifying party may designate in such proceeding and shall
pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such action or proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed in writing to the
contrary, (ii) the indemnifying party shall have failed within a reasonable
period of time to retain counsel reasonably satisfactory to the indemnified
party, or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
or any affiliate of either and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that, unless there exists a conflict among
indemnified parties, the indemnifying party shall not, in connection with any
one such proceeding or separate but substantially similar related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any appropriate local counsel) for all indemnified
parties, and that all such fees and expenses shall be reimbursed promptly after
the receipt of the invoice therefor as they are incurred. Any such separate firm
shall be designated in writing by (i) the TCW Funds, with respect to the New
Lenders, their affiliates and their respective successors and assigns and (ii)
the Purchaser, with respect to the Purchasers, its affiliates and their
respective successors and assigns. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its prior written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff for which the indemnified party is entitled to indemnification
pursuant to this Agreement, the indemnifying party agrees to indemnify and hold
harmless each indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party.
(d) To the extent the indemnification provided in paragraph
(a) or (b) of this Section 8 is for any reason unavailable to (other than by
reason of exceptions provided therein),
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<PAGE> 35
or insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to therein, then each indemnifying party under such paragraphs, in lieu
of indemnifying such indemnified party thereunder and in order to provide for
just and equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by TEC, TARC, TCR Holding and TransContinental on the one hand
and the New Lenders or the Purchaser on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, not only such relative benefits but also the
relative fault of TEC, TARC, TCR Holding and TransContinental on the one hand
and the New Lenders or the Purchaser on the other hand in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by TEC, TARC, TCR Holding and TransContinental on the one hand and the New
Lenders or the Purchaser on the other hand in connection with the offering of
the Securities shall be deemed to be in the same proportion as the total
proceeds from the offering of the Securities (net of discounts and commissions
but before deducting expenses) received by TARC, TCR Holding and
TransContinental bears to the fees received by the New Lenders or the Purchaser
who have received any such fees in respect thereof. The relative fault of TEC,
TARC, TCR Holding and TransContinental on the one hand and the New Lenders or
the Purchaser on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by TEC, TARC, TCR Holding and TransContinental on the one hand or by
the New Lenders or the Purchaser on the other hand, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) TEC, TARC, TCR Holding, TransContinental and the New
Lenders and the Purchaser agree that it would not be just and equitable if
contribution pursuant to Section 8(d) were determined by pro rata allocation or
by any other method of allocation that does not take account of the equitable
considerations referred to in Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or
other expenses actually incurred by such indemnified party in connection with
defending or investigating any such action or claim. Notwithstanding the
provisions of Section 8(d), no New Lender or Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities purchased and resold by it exceeds the amount of any damages that
the New Lender or the Purchaser has otherwise been required to pay or has paid
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution provisions contained in this
Section 8 and the representations and warranties of TEC, TARC, TCR Holding and
TransContinental contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the New Lenders or
-34-
<PAGE> 36
the Purchaser or any person controlling the New Lenders or the Purchaser or
under common control with or controlled by the New Lenders or the Purchaser or
by or on behalf of TEC, TARC, TCR Holding and TransContinental and their
respective officers, authorized representatives or directors or any person
controlling TEC, TARC, TCR Holding and TransContinental and (iii) acceptance of
and payment for any of the Securities or consummation of the Reorganization.
The indemnity and contribution agreements contained in this
Section 8 will be in addition to any liability that the indemnifying party or
parties may otherwise have to the indemnified party or parties referred to
above.
9. Termination and Survival.
(a) This Agreement may be terminated for any reason at any
time prior to the delivery and payment of the Securities on the Closing Date, as
the case may be, by the New Lenders or the Purchaser upon written notice of such
termination to TARC, if prior to such time (i) there has been, since the
respective dates as of which information is given in either of the Disclosure
Statements, (A) any material adverse change in the condition, (financial or
otherwise), results of operations, business, prospects, net worth or assets of
TARC, TCR Holding or TransContinental, whether or not arising in the ordinary
course of business or (B) except as contemplated by this Agreement, any material
transaction entered into by TARC, TCR Holding or TransContinental other than in
the ordinary course of business, or (ii) there has occurred any outbreak or
escalation of hostilities or other calamity or crisis or material change in
existing national or international financial, political, economic or securities
market conditions, the effect of which is such as to make it, in the judgment of
the New Lenders or the Purchaser, impracticable or inadvisable to purchase the
Securities or enforce contracts for the resale of Securities, or (iii) trading
generally on the New York Stock Exchange or quotations on The Nasdaq Stock
Exchange, either has been suspended, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been required
by either of said organizations or by order of the Commission or any other
governmental authority or, if a banking moratorium has been declared, by either
Federal or New York authorities, or (iv) any downgrading shall have occurred in
the rating accorded the securities of TEC or TARC by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act.
(b) Notwithstanding any other provision of this Agreement,
this Agreement shall terminate if not consummated on or prior to December 15,
1998 unless the time for consummation of this Agreement is extended in a writing
by each of the parties to this Agreement.
(c) In the event of any such termination, the provisions of
Section 7 hereof, the indemnity agreement and contribution provisions set forth
in Section 8 hereof, and the provisions of Sections 10 and 15 hereof shall
remain in effect.
10. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of TARC, TCR Holding or
TransContinental submitted pursuant hereto,
-35-
<PAGE> 37
including indemnity and contribution agreements, shall remain operative and in
full force and effect, regardless of any termination of this Agreement, or any
investigation made by or on behalf of the New Lenders or the Purchaser or any
person controlling the New Lenders or the Purchaser or by or on behalf of TARC,
TCR Holding, TransContinental or their respective officers or directors, and
shall survive acceptance of and payment for the Securities hereunder and
consummation of the Reorganization.
11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the New
Lenders shall be directed as indicated on the signature pages of this Agreement,
with a copy to Trust Company of the West, 11100 Santa Monica Boulevard, Suite
2000, Los Angeles, California, 90025, Attention: Nicholas W. Tell; Milbank,
Tweed, Hadley & McCloy, 601 South Figueroa Street, 30th Floor, Los Angeles,
California, 90017, Attention: Kenneth J. Baronsky, Esq.; notices to the
Purchaser shall be directed to Jefferies & Company, Inc., 11100 Santa Monica
Boulevard, 10th Floor, Los Angeles, California, 90025, Attention: Jerry M.
Gluck, Esq., with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South
Grand Avenue, 34th Floor, Los Angeles, California 90071, Attention Rodrigo A.
Guerra, Jr., Esq.; notices to TEC and TARC shall be directed to it at 1300 North
Sam Houston Parkway East, Suite 200, Houston, Texas 77032, Attention: Chief
Executive Officer, with a copy to Gardere & Wynne, L.L.P. 1601 Elm Street, 3000
Thanksgiving Tower, Dallas, Texas 75201, Attention: C. Robert Butterfield, Esq.;
and notices to TCR Holding or TransContinental shall be directed to it at 14902
River Road, New Sarpy, Louisiana, Attention: Chief Executive Officer, with a
copy to Trust Company of the West, 11100 Santa Monica Boulevard, Suite 2000, Los
Angeles, California, 90025, Attention: Nicholas W. Tell, Jr.; Milbank, Tweed,
Hadley & McCloy, 601 South Figueroa Street, 30th Floor, Los Angeles, California,
90017, Attention: Kenneth J. Baronsky, Esq.
12. Headings. The headings of the sections of this document
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
13. Parties. This Agreement shall inure to the benefit of and
be binding upon TEC, TARC, TCR Holding, TransContinental, the New Lenders and
the Purchaser, any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provisions herein contained. No purchaser of Securities from the New
Lenders or the Purchaser shall be deemed to be a successor by reason merely of
such purchase.
14. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
15. Governing Law. THIS AGREEMENT, THE SECURITIES AND ALL
ISSUES HEREUNDER AND THEREUNDER, INCLUDING (WITHOUT LIMITATION) THE
DETERMINATION OF THE MAXIMUM LAWFUL RATE OF INTEREST THAT MAY BE CONTRACTED FOR,
CHARGED OR RECEIVED WITH RESPECT TO THE NOTES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE
-36-
<PAGE> 38
INTERNAL LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NYCPLR 327(b). TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING, WHETHER IN TORT, CONTRACT OR OTHERWISE, ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS OTHER THAN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY NEW LENDER OR TRUSTEE TO ENFORCE
ANY RIGHT OR EXERCISE ANY REMEDY UNDER THE COMPANY MORTGAGE, THE SECURITY
AGREEMENT OR THE CONSTRUCTION COLLATERAL AND DISBURSEMENT AGREEMENT
(COLLECTIVELY, "COLLATERAL ACTIONS"), AND IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING (OTHER THAN COLLATERAL ACTIONS)
SHALL BE HEARD AND DETERMINED ONLY IN ANY SUCH COURT. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF ANY NEW LENDER, PURCHASER OR THEIR RESPECTIVE AGENTS
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF TEC, TARC, TCR HOLDING OR
TRANSCONTINENTAL IN ANY COLLATERAL ACTION IN ANY OTHER JURISDICTION.
-37-
<PAGE> 39
Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between TEC, TARC,
TCR Holding and TransContinental, on the one hand, and the New Lenders and the
Purchaser on the other hand.
Very truly yours,
TRANSAMERICAN ENERGY CORPORATION,
a Delaware corporation
By:
---------------------------------------
-------------------------
-------------------------
TRANSAMERICAN REFINING CORPORATION,
a Texas corporation
By:
---------------------------------------
-------------------------
-------------------------
TCR HOLDING CORPORATION,
a Delaware corporation
By:
---------------------------------------
-------------------------
-------------------------
TRANSCONTINENTAL REFINING CORPORATION,
a Delaware corporation
By:
---------------------------------------
-------------------------
-------------------------
<PAGE> 40
Accepted:
December 15, 1998
TCW FUNDS:
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd.
as General Partner
By:
----------------------------------
Name:
Title:
By: TCW Investment Management Company
as Investment Advisor
By:
----------------------------------
Name:
Title:
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (LINC II), L.P., as General Partner
By: TCW Advisers (Bermuda), Ltd.
as General Partner
By:
----------------------------------
Name:
Title:
<PAGE> 41
By: TCW Investment Management Company
as Investment Advisor
By:
----------------------------------
Name:
Title:
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW Investment Management Company,
its Investment Manager
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
<PAGE> 42
TCW SHARED OPPORTUNITY FUND IIB, L.L.C.
By: TCW Asset Management Company,
its Investment Advisor
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW Asset Management Company
as Investment Advisor
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
<PAGE> 43
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
BROWN UNIVERSITY THIRD CENTURY FUND
By:
--------------------------------------
Mark L. Attanasio,
its Investment Advisor
Tax I.D. No.: 13-6065573 (Nominee)
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Mark L. Attanasio
(310) 235-5910
(310) 235-5966/fax
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky, Esq.
<PAGE> 44
JEFFERIES & COMPANY, INC., as Purchaser
with respect to the Securities listed on
Schedule 1A
By:
--------------------------------------
Joe Maly
Managing Director
Address:
11100 Santa Monica Boulevard
Los Angeles, California 90027
Attention: Joe Maly
JEFFERIES & COMPANY, INC., with respect
to the Securities listed next to its
name on Schedule 1
By:
--------------------------------------
Joe Maly
Managing Director
Address:
11100 Santa Monica Boulevard
Los Angeles, California 90027
Attention: Joe Maly
<PAGE> 45
SCHEDULE I
<TABLE>
<CAPTION>
AMOUNT OF NOTES TO
PURCHASER BE PURCHASED PURCHASE PRICE
- --------- ------------------ --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. $ 22,000,000 $ 21,242,034
TCW Leveraged Income Trust II, L.P. 22,000,000 21,242,034
TCW Shared Opportunity Fund, II, L.P. 30,000,000 28,966,410
TCW Shared Opportunity Fund IIB, L.L.C. 5,000,000 4,827,735
TCW Shared Opportunity Fund III, L.P. 20,000,000 19,310,940
Brown University Third Century Fund 1,000,000 965,547
Jefferies & Company, Inc. $ 50,000,000 $ 48,277,350
------------ ------------
TOTAL: $150,000,000 $144,832,050
============ ============
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF
TRANSCONTINENTAL
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- --------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 880,000 shares $ 601,040
TCW Leveraged Income Trust II, L.P. 880,000 601,040
TCW Shared Opportunity Fund, II, L.P. 1,200,000 819,600
TCW Shared Opportunity Fund IIB, L.L.C. 200,000 136,600
TCW Shared Opportunity Fund III, L.P. 800,000 546,400
Brown University Third Century Fund 40,000 27,320
Jefferies & Company, Inc. 2,000,000 shares $1,366,000
--------- ----------
TOTAL: 6,000,000 shares $4,098,000
========= ==========
</TABLE>
<PAGE> 46
<TABLE>
<CAPTION>
AMOUNT OF TCR VOTING
COMMON STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- ------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 35,797 shares $ 2,255
TCW Leveraged Income Trust II, L.P. 35,797 2,255
TCW Shared Opportunity Fund, II, L.P. 48,814 3,075
TCW Shared Opportunity Fund IIB, L.L.C. 8,136 513
TCW Shared Opportunity Fund III, L.P. 32,542 2,050
Brown University Third Century Fund 1,627 103
Jefferies & Company, Inc. 77,288 shares $ 4,869
------- -------
TOTAL: 240,000 shares $15,120
======= =======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS B
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- --------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 440,000 shares $ 26,400
TCW Leveraged Income Trust II, L.P. 440,000 26,400
TCW Shared Opportunity Fund, II, L.P. 600,000 36,000
TCW Shared Opportunity Fund IIB, L.L.C. 100,000 6,000
TCW Shared Opportunity Fund III, L.P. 400,000 24,000
Brown University Third Century Fund 20,000 1,200
Jefferies & Company, Inc. 1,000,000 shares $ 60,000
--------- --------
TOTAL: 3,000,000 shares $180,000
========= ========
</TABLE>
<PAGE> 47
<TABLE>
<CAPTION>
AMOUNT OF CLASS C
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- --------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 242,000 shares $13,552
TCW Leveraged Income Trust II, L.P. 242,000 13,552
TCW Shared Opportunity Fund, II, L.P. 330,000 18,480
TCW Shared Opportunity Fund IIB, L.L.C. 55,000 3,080
TCW Shared Opportunity Fund III, L.P. 220,000 12,320
Brown University Third Century Fund 11,000 616
Jefferies & Company, Inc. 550,000 shares $30,800
------- -------
TOTAL: 1,650,000 shares $92,400
========= =======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS D
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- --------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 638,000 shares $ 33,814
TCW Leveraged Income Trust II, L.P. 638,000 33,814
TCW Shared Opportunity Fund, II, L.P. 870,000 46,110
TCW Shared Opportunity Fund IIB, L.L.C. 145,000 7,685
TCW Shared Opportunity Fund III, L.P. 580,000 30,740
Brown University Third Century Fund 29,000 1,537
Jefferies & Company, Inc. 1,450,000 shares $ 76,850
--------- --------
TOTAL: 4,350,000 shares $230,550
========= ========
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
AMOUNT OF CLASS E
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- --------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 1,284,203 shares $ 80,905
TCW Leveraged Income Trust II, L.P. 1,284,203 80,905
TCW Shared Opportunity Fund, II, L.P. 1,751,186 110,325
TCW Shared Opportunity Fund IIB, L.L.C. 291,864 18,387
TCW Shared Opportunity Fund III, L.P. 1,167,458 73,550
Brown University Third Century Fund 58,373 3,677
Jefferies & Company, Inc. 2,922,712 shares $184,131
--------- --------
TOTAL: 8,760,000 shares $551,880
========= ========
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS B
NON-VOTING COMMON STOCK
PURCHASER TO BE ISSUED PURCHASE PRICE
- --------- ----------------------- --------------
<S> <C> <C>
Trust Company of the West:
TCW Leveraged Income Trust, L.P. 660,000 shares N/A
TCW Leveraged Income Trust II, L.P. 660,000 N/A
TCW Shared Opportunity Fund, II, L.P. 900,000 N/A
TCW Shared Opportunity Fund IIB, L.L.C. 150,000 N/A
TCW Shared Opportunity Fund III, L.P. 600,000 N/A
Brown University Third Century Fund 30,000 shares N/A
--------- ---
TOTAL: 3,000,000 shares N/A
========= ===
</TABLE>
<PAGE> 49
SCHEDULE IA
<TABLE>
<CAPTION>
AMOUNT OF CLASS B
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- ------------------------------------ --------------
<S> <C> <C>
Jefferies & Company, Inc. 3,000,000 shares $180,000
--------- --------
TOTAL: 3,000,000 shares $180,000
========= ========
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS C
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- ------------------------------------ --------------
<S> <C> <C>
Jefferies & Company, Inc. 1,650,000 shares $92,400
--------- -------
TOTAL: 1,650,000 shares $92,400
========= =======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS D
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- ------------------------------------ --------------
<S> <C> <C>
Jefferies & Company, Inc. 4,350,000 shares $230,550
--------- --------
TOTAL: 4,350,000 shares $230,550
========= ========
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF CLASS E
PREFERRED STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
- --------- ------------------------------------ --------------
<S> <C> <C>
Jefferies & Company, Inc. 9,000,000 shares $567,000
--------- --------
TOTAL: 9,000,000 shares $567,000
========= ========
</TABLE>
<PAGE> 50
Omitted Schedules
-----------------
Pursuant to Item 601(b)(2) of Regulation S-K, the Company has omitted from
this filing certain schedules to Exhibit 2.1. The Company agrees to furnish
supplementally copies of any such omitted schedules to the Commission upon
request. The contents of the omitted schedules are described below:
Schedule 1(c) - Liabilities of TARC to be paid by proceeds retained
by TARC.
Schedule 2(b)(i) - Real Property and Investment Assets
Schedule 2(b)(ii) - Liens
Schedule 2(b)(iii) - Permitted Liens
Schedule 2(j) - Contracts
Schedule 2(n) - Licenses
Schedule 2(o) - Intellectual Property
Schedule 2(p) - Operable Units
Schedule 2(v) - Deed Restrictions and Encroachments
Schedule 2(x) - Exceptions to Public Utilities
Schedule 2(EE) - Current Tax Filings and Audits
<PAGE> 1
EXHIBIT 2.2
ASSET TRANSFER AGREEMENT
by and between
TRANSAMERICAN REFINING CORPORATION
(a Texas Corporation)
and
TCR HOLDING CORPORATION
(a Delaware Corporation)
<PAGE> 2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
<TABLE>
<CAPTION>
PAGE
NO.
---
<S> <C>
ARTICLE I TRANSFER OF ASSETS AND CLOSING.........................................................................1
1.01 Assets.........................................................................................1
1.02 Liabilities....................................................................................1
1.03 Closing........................................................................................2
1.04 Further Assurances; Post-Closing Cooperation...................................................2
1.05 Third-Party Consents...........................................................................3
1.06 Agreed Value...................................................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF TARC................................................................3
2.01 Representations and Warranties in the Securities Purchase Agreement............................3
2.02 Disclosure.....................................................................................3
2.03 Real Property Lease Obligations................................................................4
2.04 Personal Property Leases Obligations...........................................................4
2.05 Indebtedness...................................................................................4
2.06 Accounts Payable...............................................................................4
2.07 Contracts and Licenses.........................................................................4
2.08 Legal Proceedings..............................................................................4
2.09 Liens..........................................................................................4
2.10 Taxes..........................................................................................4
ARTICLE III INDEMNIFICATION......................................................................................5
3.01 Indemnification................................................................................5
3.02 Survival of Indemnity and Representations and Warranties.......................................6
3.03 General Indemnification Procedures.............................................................6
3.04 Indemnification of Third Party Claims..........................................................6
ARTICLE IV TAX...................................................................................................9
4.01 Transfer Taxes.................................................................................9
4.02 Tax Cooperation................................................................................9
4.03 Tax Indemnification............................................................................9
ARTICLE V DEFINITIONS............................................................................................9
5.01 Definitions....................................................................................9
5.02 Construction of Certain Terms and Phrases.....................................................13
ARTICLE VI MISCELLANEOUS........................................................................................13
6.01 Notices.......................................................................................13
6.02 Bulk Sales Act................................................................................14
6.03 Waiver of Vendors' Privileges.................................................................14
6.04 Entire Agreement..............................................................................14
6.05 Expenses......................................................................................14
6.06 Waiver........................................................................................14
6.07 Amendment.....................................................................................14
6.08 No Third Party Beneficiary....................................................................14
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
6.09 Headings......................................................................................14
6.10 Invalid Provisions............................................................................14
6.11 Governing Law.................................................................................15
6.12 Counterparts..................................................................................15
</TABLE>
SCHEDULE A Assumed Liabilities
SCHEDULE B General Assignment and Bill of Sale
SCHEDULE C Assumption Agreement
SCHEDULE D Real Property Leases
SCHEDULE E Personal Property Leases
SCHEDULE F Indebtedness
SCHEDULE G Accounts Payable as of December 2, 1998
SCHEDULE H Contracts and Licenses
SCHEDULE I Legal Proceedings
SCHEDULE J Liens
SCHEDULE K Retained Assets
SCHEDULE L Retained Liabilities
SCHEDULE M Current Tax Filings and Audits
<PAGE> 4
This ASSET TRANSFER AGREEMENT dated as of December 15, 1998 is
made and entered into by and between TransAmerican Refining Corporation, a Texas
corporation ("TARC"), TransAmerica Energy Corporation, a Delaware corporation
("TEC") and TCR Holding Corporation, a Delaware corporation ("TCR Holding").
Capitalized terms not otherwise defined herein have the meanings set forth in
Section 5.01 hereof.
WHEREAS, TARC is engaged in the business of owning,
constructing, developing and operating a petroleum refinery in St. Charles
Parish, Louisiana (the "Refinery");
WHEREAS, TEC, TARC, TCR Holding and TransContinental Refining
Corporation, a Delaware corporation and wholly-owned subsidiary of TCR Holding
("TransContinental"), have entered into a Securities Purchase Agreement dated
December 10, 1998 with Jefferies & Company, Inc., as amended and restated
December 15, 1998 by and among TEC, TARC, TCR Holding, TransContinental, TCW
Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P, TCW Shared
Opportunity Fund III, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared
Opportunity Fund IIB, LLC, and Jefferies & Company, Inc. (the "Securities
Purchase Agreement"); and
WHEREAS, it is a condition to the consummation of the
transactions under the Securities Purchase Agreement that TARC transfer and
assign to TCR Holding, and that TCR Holding acquire from TARC certain of the
assets of TARC and that TCR Holding assume certain liabilities of TARC;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND CLOSING
1.01 Assets
(a) Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, TARC will transfer, convey, assign and
deliver to TCR Holding, and TCR Holding will acquire, at the Closing, all of
TARC's right, title and interest in, to and under the Assets and Properties of
TARC, except as otherwise provided in Sections 1.01(b) and 1.02, as the same
shall exist on the Closing Date (the "Assets").
(b) Retained Assets. Notwithstanding anything in this
Agreement to the contrary, the Retained Assets shall be excluded from and shall
not constitute Assets and TCR Holding shall have neither any rights nor any
obligations with respect thereto.
1.02 Liabilities. In consideration of the transfer,
conveyance, assignment and delivery of the Assets pursuant to this Agreement, on
the terms and subject to the conditions set forth in this Agreement, at the
Closing, TCR Holding will assume and will agree to pay, perform
<PAGE> 5
and discharge when due the Liabilities of TARC listed in Schedule A hereto (the
"Assumed Liabilities").
1.03 Closing. The Closing will take place on the Closing Date
at the offices of Milbank, Tweed, Hadley & McCloy, 350 Park Avenue, New York,
New York. On the Closing Date, (i) TARC will assign and transfer to TCR Holding
all of its right, title and interest in and to the Assets (free and clear of all
Liens, other than Permitted Liens) by delivery of (A) a General Assignment and
Bill of Sale in the form of Schedule B hereto (the "General Assignment), duly
executed by TARC, (B) an assignment of Intellectual Property in form and
substance acceptable to TCR Holding, (C) general warranty deeds in proper
statutory form for recording and otherwise in form and substance acceptable to
TCR Holding conveying title to the Assets comprised of real property and all of
the rights arising out of the ownership thereof or appurtenant thereto, together
with all buildings, structures, facilities, fixtures and other improvements
thereto, and (D) such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance acceptable to TCR Holding and its
counsel, as shall be effective to vest in TCR Holding good title to the Assets
(the General Assignment and the other instruments referred to in clauses (B),(C)
and (D) being collectively referred to herein as the "Assignment Instruments")
and (ii) TCR Holding will assume the Assumed Liabilities pursuant to (X) an
Assumption Agreement in the form of Schedule C hereto (the "Assumption
Agreement"), duly executed by TCR Holding, and (Y) such other instruments of
assumption as shall be effective to cause TCR Holding to assume the Assumed
Liabilities as and to the extent provided in Section 1.02 (the Assumption
Agreement and such other instruments referred to in clause (Y) being
collectively referred to herein as the "Assumption Instruments").
1.04 Further Assurances; Post-Closing Cooperation.
(a) At any time or from time to time after the Closing, at TCR
Holding's request and without further consideration, TARC shall execute and
deliver to TCR Holding such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as TCR Holding may reasonably deem necessary or desirable in
order more effectively to transfer, convey and assign to TCR Holding, and to
confirm TCR Holding's title to, all of the Assets, and, to the full extent
permitted by Law, to put TCR Holding in actual possession and operating control
of the Refinery and the Assets and to assist TCR Holding in exercising all
rights with respect thereto, and otherwise to cause TARC to fulfill its
obligations under this Agreement.
(b) Effective on the Closing Date, TARC hereby constitutes and
appoints TCR Holding the true and lawful attorney of TARC, with full power of
substitution, in the name of TARC or TCR Holding, but on behalf of TARC and for
the benefit of TCR Holding: (i) to demand and receive from time to time any and
all of the Assets and to make endorsements and give receipts and releases for
and in respect of the same and any part thereof; (ii) to institute, prosecute,
compromise and settle any and all Actions or Proceedings that TCR Holding may
deem proper in order to collect, assert or enforce any claim, right or title of
any kind in or to the Assets; (iii) to defend or compromise any or all Actions
or Proceedings in respect of any of the Assets; and (iv) to do all such acts and
things in relation to the matters set forth in the preceding clauses (i) through
(iii) as TCR Holding shall deem desirable. TARC hereby acknowledges that
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the appointment hereby made and the powers hereby granted are coupled with an
interest and are not and shall not be revocable by it in any manner or for any
reason. TARC shall execute and deliver to TCR Holding at the Closing an
acknowledged power of attorney to the foregoing effect.
(c) Following the Closing, TARC will afford TCR Holding, its
counsel and accountants access to the books, records and other data relating to
the Assets in TARC's possession, if any, with respect to periods prior to the
Closing and the right to make copies and extracts therefrom. Further, TARC
agrees for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any books, records and other data without first
offering in writing to surrender such books, records and other data to TCR
Holding and TCR Holding shall not have agreed to take possession thereof within
thirty (30) days of such offer.
1.05 Third-Party Consents. To the extent that any Contract is
not assignable without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment thereof if such assignment
or attempted assignment would constitute a breach of or a default under any
contract either constituting or governing Contract. TARC shall use its best
efforts to obtain the consent of such other party to the assignment of any
Contract in all cases in which such consent is or may be required for such
assignment. If any such consent shall not be obtained, TARC shall cooperate with
TCR Holding in any arrangement designed to provide TCR Holding with the benefits
intended to be assigned to TCR Holding under or pursuant to such Asset,
including enforcement at the cost and for the account of TARC of any and all
rights of TARC against the other party thereto arising out of the breach or
cancellation thereof by such other party or otherwise.
1.06 Agreed Value. The parties agree that for purposes of all
federal and state income tax filings the agreed upon value of the Assets will be
$1,100,000,000 as of October 31, 1998.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TARC
TARC and TEC hereby represent and warrant, jointly and
severally to TCR Holding as follows:
2.01 Representations and Warranties in the Securities Purchase
Agreement. TARC and TEC hereby represents and warrants to TCR Holding for the
benefit of TCR Holding that each of the representations and warranties made by
TARC and TEC in the Securities Purchase Agreement are true and correct.
2.02 Disclosure. All material facts relating to the condition
of the Refinery and the other Assets and Properties and Liabilities of TARC have
been disclosed to TCR Holding in the Securities Purchase Agreement and neither
the Securities Purchase Agreement nor any of the documents or certificates
delivered by or on behalf of TARC in connection therewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make
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the statements herein or therein, in the light of the circumstances under which
they were made, not misleading.
2.03 Real Property Lease Obligations. Schedule D contains a
true and correct list of all leases and subleases of real property as to which
TARC is the lessee or sublessee.
2.04 Personal Property Leases Obligations. Schedule E contains
a true and correct list of all leases and subleases of furniture, fixtures,
equipment, machinery, vehicles and other tangible personal property used or held
for use by TARC in the conduct of its business as to which TARC is the lessee or
sublessee.
2.05 Indebtedness. Schedule F contains a true and correct list
of all Indebtedness of TARC.
2.06 Accounts Payable. Schedule G contains a true and correct
list of all obligations of TARC with respect to accounts payable as of December
2, 1998 and all accrued liabilities as of December 14, 1998. All such accounts
payable were incurred in the ordinary course of the Business and, to the extent
incurred as part of the development of Phase I or Phase II of the Refinery, were
incurred in accordance with the Plans (as defined in the Securities Purchase
Agreement).
2.07 Contracts and Licenses. Schedule H contains a true and
correct list of all (i) Contracts (other than those listed in Schedules D and E)
to which TARC is a party and which are utilized in the conduct of TARC's
business, including, without limitation, Contracts relating to suppliers, sales
representatives, distributors, purchase orders, marketing arrangements and
manufacturing arrangements and (ii) all Licenses owned or possessed by TARC or
utilized by TARC in the conduct of its business.
2.08 Legal Proceedings. Schedule I contains a true and
complete list of all Actions and Proceedings to which TARC is a party or to
which any of the Assets and Properties of TARC is subject.
2.09 Liens. Schedule J contains a true and correct list of all
Liens on the Assets and Properties of TARC.
2.10 Taxes.
(a) TARC (or the affiliated group of which TARC is a member)
has filed (or will file) all Tax Returns required to be filed by applicable law
on or prior to Closing Date. All Tax Returns were (and, as to Tax Returns not
filed as of the date hereof, will be) true, complete and correct and filed on a
timely basis. TARC (or the affiliated group of which TARC is a member) has paid
(and as to Tax Returns not filed as of the date hereof, will pay) all Taxes that
are due, or claimed or asserted by any taxing authority to be due for the
periods covered by the Tax Returns or (ii) has duly and fully provided reserves
adequate to pay all Taxes in accordance with GAAP. TARC (or the affiliated group
of which TARC is a member) maintains (and until the Closing Date will maintain)
on its books and records reserves adequate to pay all Taxes not yet due and
payable.
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(b) There are no Tax liens upon the Assets other than liens
for Taxes not yet due and payable.
(c) TARC (or the affiliated group of which TARC is a member)
has complied (and until the Closing Date will comply) with all applicable laws,
rules, and regulations relating to the payment and withholding of Taxes
(including withholding and reporting requirements under Code Sections 1441
through 1464, 3401 through 3406, 6041 and 6049 and similar provisions under any
other laws) and has, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper governmental
authorities all required amounts.
(d) Except as set forth in Schedule M, TARC (or the affiliated
group of which it is a member) has not requested any extension of time within
which to file any Tax Return and has not executed any outstanding waivers or
comparable consents regarding the application of the statute of limitations for
any Taxes or Tax Returns; the statute of limitations for the assessment of all
Taxes has expired for all applicable Tax Returns of TARC (or the affiliated
group of which it is a member); Tax Returns have been examined by the
appropriate taxing authorities for all periods; (iii) no deficiency for any
Taxes has been suggested, proposed, asserted or assessed against TARC or any
member if the affiliated group of which TARC is a member that has not been
resolved and paid in full; and (iv) no audits or other administrative
proceedings or court proceedings are presently pending with regard to any Taxes
or Tax Returns of TARC or any member of the affiliated group of which TARC is a
member.
ARTICLE III
INDEMNIFICATION
3.01 Indemnification.
(a) Each of TARC and TEC shall, jointly and severally, to the
fullest extent permitted by applicable law, indemnify TCR Holding, its officers,
directors, Affiliates, agents and representatives and their respective
successors and assigns (collectively, the "TCR Parties") in respect of, and hold
the TCR Parties harmless from and against, any and all Losses suffered, incurred
or sustained, as suffered, incurred or sustained by any of them or to which any
of them becomes subject, resulting from, arising out of or relating to (i) any
breach of representation or warranty or nonfulfillment of or failure to perform
any agreement on the part of TARC contained in this Agreement (including those
made by reference to the Securities Purchase Agreement) or (ii) the Retained
Assets or any Retained Liability.
(b) TCR Holding shall, to the fullest extent permitted by
applicable law, indemnify TARC, its officers, directors, Affiliates, agents and
representatives and their respective successors and assigns (collectively, the
"TARC Parties") in respect of, and hold the TARC Parties harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
the Assets or the Assumed Liabilities, except to the extent any such loss arises
out of any Loss giving rise to indemnification under Section 3.01(a).
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3.02 Survival of Indemnity and Representations and Warranties.
The indemnity provisions contained in this Article III and the representations
and warranties of TARC and TEC contained in this Agreement (including those made
by reference to the Securities Purchase Agreement) shall survive indefinitely
regardless of (i) any investigation made at any time by or on behalf of any TCR
Party, (ii) any termination of this Agreement or the Securities Purchase
Agreement or (iii) acceptance of the Assets by TCR Holding.
3.03 General Indemnification Procedures. Any party claiming
entitlement to indemnification pursuant to Section 3.01 (the "Indemnified
Party"), shall give the party obligated to provide indemnification under Section
3.01 (the "Indemnifying Party") notice of any matter which an Indemnified Party
has determined has given or could give rise to a right of indemnification under
this Agreement, within 90 days of such determination, stating the amount of the
Loss, if known, and method of computation thereof, and containing a reference to
the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises; provided, however, that the failure to
provide such notice shall not release the Indemnifying Party from any of its
obligations under this Article III, except to the extent the Indemnifying Party
is materially prejudiced by such failure, and shall not relieve the Indemnifying
Party from any other obligation or liability that it may have to any Indemnified
Party otherwise than under this Article III.
3.04 Indemnification of Third Party Claims.
(a) The obligations and Liabilities of an Indemnifying Party
under this Article III with respect to Losses arising from claims of any third
party which are subject to the indemnification provided for in this Article III
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions:
(1) If an Indemnified Party shall receive notice of any Third
Party Claim, the Indemnified Party shall give the Indemnifying
Party notice of such Third Party Claim within 30 days of the
receipt by the Indemnified Party of such notice; provided,
however, that the failure to provide such notice shall not
release the Indemnifying Party from any of its obligations
under this Article III, except to the extent the Indemnifying
Party is materially prejudiced by such failure, and shall not
relieve the Indemnifying Party from any other obligation or
liability that it may have to any Indemnified Party otherwise
than under this Article III.
(2) If the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder
against any Losses that may result from such Third Party
Claim, then the Indemnifying Party shall be entitled to assume
and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice
of its intention to do so to the Indemnified Party; provided,
however, that if there exists or is reasonably likely to exist
a conflict of interest that would make it inappropriate for
the same counsel to represent both the Indemnified Party and
the Indemnifying Party, then the Indemnified Party shall be
entitled, upon obtaining the prior written approval of the
Indemnifying Party, to retain its own counsel, in each
jurisdiction for which
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the Indemnified Party determines counsel is required, at the
expense of the Indemnifying Party; provided further, that in
no event shall the Indemnifying Party be obligated to pay the
fees and expenses of more than one counsel for all Indemnified
Parties in each such jurisdiction.
(3) In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third Party Claim,
as provided above, the Indemnified Party shall cooperate with
the Indemnifying Party in such defense and make available to
the Indemnifying Party, without further cost or expense to the
Indemnifying Party, all witnesses, pertinent records,
materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating
thereto as is reasonably required by the Indemnifying Party.
(4) In the event the Indemnified Party is, directly or
indirectly, conducting the defense against any such Third
Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the
Indemnified Party, without further cost or expense to the
Indemnified Party, all such witnesses, records, materials and
information in the Indemnifying Party's possession or under
the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party.
(5) No Third Party Claim may be settled without the prior
written consent of the Indemnifying Party, unless such
settlement (i) includes an unconditional release of both the
Indemnifying Party and each Indemnified Party from all
liability arising out of such Third Party claim and (ii) does
not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of either the
Indemnifying Party or any Indemnified Party.
(6) The Indemnified Party agrees to repay to the Indemnifying
Party all amounts advanced to the Indemnified Party or
expended on Indemnified Party's behalf pursuant to this
Article III in the event that a court of competent
jurisdiction subsequently determines that the Indemnified
Party was not entitled to be indemnified pursuant to the terms
of this Article III.
(b) Subject to the foregoing conditions and obligations and
the conditions set forth below, TCR Holding has agreed to provide the TARC
Parties with limited indemnification with respect to the proceeding commenced by
the New Orleans District Office of the U.S. Equal Employment Opportunity
Commission ("EEOC"), which proceeding is captioned, "Commissioner Joyce E.
Tucker, Charging Party, and TransAmerican Refining Company/Southeast Louisiana
Contractors of Norco, Inc., Respondent, Charge Number ###-##-#### (the "EEOC
Charge"):
(1) TCR Holding shall, to the fullest extent permitted by
applicable law, indemnify and hold the TARC Parties harmless
against all judgments, fines and amounts paid in settlement,
to the extent actually and reasonably incurred by the TARC
Parties in connection with the EEOC Charge or any EEOC
Litigation (as
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such term is defined below), but excluding all expenses
(including reasonable attorneys' fees and disbursements)
incurred by the TARC Parties in connection therewith, to a
maximum amount of $1,000,000 (the "Indemnification Amount").
(2) TARC shall keep TCR Holding apprised of all activities
regarding the EEOC Charge, including, without limitation, all
communications from the EEOC, whether written or oral, any
attempt by the EEOC to engage in conciliation with respect to
the EEOC Charge and any actual or threatened court action
based on or arising out of the EEOC Charge (the "EEOC
Litigation");
(3) TCR Holding, at its option, shall be permitted to
participate in any activity relating to the EEOC Charge,
including any conciliation or other discussions with the EEOC,
and/or any EEOC Litigation and to assume the defense of
thereof, in whole or in part;
(4) TARC must cooperate fully in the defense of the EEOC
Charge and any EEOC Litigation; and
(5) TARC must refrain from settling or otherwise disposing of
the EEOC Charge and/or any EEOC Litigation, or having any
discussions in connection therewith, without obtaining TCR
Holding's prior written consent. In addition, TARC may not
enter into a settlement agreement with respect to the EEOC
Charge and/or any EEOC Litigation unless such settlement
agreement (i) includes an unconditional release of TCR
Holding, as a third party beneficiary, and (ii) does not
include a statement as to or any admission of fault,
culpability or a failure to act by or on behalf of either TARC
or TCR Holding.
(6) The Indemnification Amount shall be reduced by the
following:
(i) Any amounts recovered by TARC, or any of
its successors or assigns, or John R. Stanley, or anyone
acting on his behalf, in connection with the action captioned
TransAmerican Refining Company and John R. Stanley v. Bill
Elder, WWL-TV A.H. Belo Corp, Case No.: WWL-TV 30-S-94168, in
state court in Louisiana, whether by settlement, by judgment
of the court or otherwise, and
(ii) All amounts spent by TCR Holding in
connection with its participation in or assumption of the
defense of the EEOC Charge or any EEOC Litigation, as provided
above, including, without limitation, all reasonable
attorneys' fees, costs and disbursements.
(7) Notwithstanding the foregoing, TCR Holding shall not be
obligated to indemnify the TARC Parties if a court of
competent jurisdiction shall determine that the TARC Parties,
or anyone acting on any of the TARC Parties' behalf,
misrepresented any material fact with regard to the EEOC
Charge in the course of
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negotiations in connection with the Transaction Documents (as
defined in the Securities Purchase Agreement).
ARTICLE IV
TAX
4.01 Transfer Taxes. TCR Holding shall pay all Transfer Taxes
arising out of or in connection with the transactions effected pursuant to this
Agreement, and shall indemnify, defend, and hold harmless TARC on an after-Tax
basis with respect to such Transfer Taxes. TCR Holding shall file all necessary
documentation and Tax Returns with respect to such Transfer Taxes.
4.02 Tax Cooperation. After the Closing Date, TARC and the
affiliated group of which it is a member will cooperate in the preparation of
all Tax Returns, will provide any records and other information that TRC Holding
requests, will provide access to, and the cooperation of, its auditor, and will
cooperate with TRC Holding in connection with any Tax investigation, audit or
other proceeding.
4.03 Tax Indemnification. After the Closing Date, TARC will
indemnify and hold harmless TCR Holding from and against any and all claims,
actions, causes of action, liabilities, losses, damages, and reasonable
out-of-pocket expenses and costs resulting from, arising out of or relating to
all Taxes imposed on TARC or any member of the affiliated group of which TARC is
a member, including Taxes imposed on TARC or any such member under Treas. Reg.
Section 1.1502-6 or any state or local counterpart thereto or as a result of any
contractual agreements between TARC or any member of the affiliated group of
which TARC is a member and any other persons the Closing Date
ARTICLE V
DEFINITIONS
5.01 Definitions.
(a) Defined Terms. As used in this Agreement, the following
defined terms have the meanings indicated below:
"Act" has the meaning set forth in Section 2.04.
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that (i) directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified or (ii) is an employee, officer,
director or stockholder of such person. For purposes of this
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definition, control of a Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
Contract or otherwise and, in any event and without limitation of the previous
sentence, any Person owning ten percent (10%) or more of the voting securities
of another Person shall be deemed to control that Person.
"Agreement" means this Asset Transfer Agreement and the
Schedules hereto as the same shall be amended from time to time.
"Assets" has the meaning set forth in Section 1.01(a).
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Assignment Instruments" has the meaning set forth in
Section 1.03.
"Assumed Liabilities" has the meaning set forth in
Section 1.02.
"Assumption Agreement" has the meaning set forth in
Section 1.03.
"Assumption Instruments" has the meaning set forth in
Section 1.03.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in New York or California are authorized or obligated
to close.
"Closing" means the closing of the transactions contemplated
by Section 1.03.
"Closing Date" means December 15, 1998 or such other date as
the parties hereto may mutually agree.
"Code" means the Internal Revenue Code of 1986.
"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"General Assignment" has the meaning set forth in
Section 1.03.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the
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ordinary course of business), (iv) under capital leases and (v) in the nature of
guarantees of the obligations described in clauses (i) through (iv) above of any
other Person.
"Indemnified Party" has the meaning set forth in Section 3.07.
"Indemnifying Party" has the meaning set forth in
Section 3.07.
"Indenture" means the Indenture of even date herewith among
TARC and The Bank of New York as trustee (the "Trustee") governing the 15%
Senior Secured Notes due 2003 issued by TARC and to be assumed by TCR Holding.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights.
"Investment Assets" means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase and
securities convertible into or exchangeable for other securities), interests in
joint ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by TARC (other
than trade receivables generated in the ordinary course of business of the
TARC).
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"License" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment).
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"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Permitted Lien" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (ii) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent and (iii) any
minor imperfection of title or similar Lien which individually or in the
aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of
TARC's business.
"Person" means any natural person, corporation, limited
liability company, general partnership, limited partnership, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.
"Refinery" has the meaning set forth in the recitals to this
Agreement.
"Retained Assets" means those assets of TARC listed in
Schedule K hereto.
"Retained Liabilities" means all Liabilities of TARC other
than Assumed Liabilities, including the Liabilities listed on Schedule L hereto.
"Securities" has the meaning set forth in the recitals to this
Agreement.
"Securities Purchase Agreement" has the meaning set forth in
the recitals to this Agreement.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not and any expenses incurred
in connection with the determination, settlement or litigation of any Tax
liability.
"Tax Return" means a report, return or other information
(including any amendments) required to be supplied to a governmental entity by
(i) TARC or (ii) any member of the affiliated group of which TARC is a member
with respect to Taxes that relate to the Assets.
"TCR Parties" has the meaning set forth in Section 3.01.
"Third Party Claim" has the meaning ascribed to it in Section
3.03.
"Transfer Taxes" means all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees.
12
<PAGE> 16
5.02 Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; and
(iv) the terms "Article" or "Section" refer to the specified Article or Section
of this Agreement. Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.
ARTICLE VI
MISCELLANEOUS
6.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to TCR Holding, to:
14902 River Road
New Sarpy, LA 70078
Attn: Glenn McGinnis
with copies to:
Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, California 90025
Attn: Nicholas W. Tell
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angles, California 90017
Attn: Kenneth J. Baronsky
If to TARC, to:
1300 East North Belt, Suite 310
Houston, TX 77032-2949
Attn: Ed Donahue
13
<PAGE> 17
with a copy to:
Gardere & Wynne, LLP
1601 Elm Street
3000 Thanksgiving Tower
Dallas, TX 75201
Attn: C. Robert Butterfield
6.02 Bulk Sales Act. The parties hereby waive compliance with
the bulk sales act or comparable statutory provisions of each applicable
jurisdiction.
6.03 Waiver of Vendors' Privileges. TARC waives any and all
vendors' privileges to which TARC is entitled and further waives any right to
rescind or dissolve the transfer of the Assets conveyed to TCR Holdings on
account of the nonfulfillment of any of TCR Holdings' obligations hereunder, to
which TARC might be entitled pursuant to La. Civ. Code Arts. 2561-2564 or
otherwise and further warrants that third parties may deal with TCR Holdings,
free and clear of any express or implied resolutory condition or any express or
implied right of recission.
6.04 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties with respect thereto.
6.05 Expenses. Except as set forth herein, each party will pay
its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated hereby
and thereby.
6.06 Waiver. No waiver of any provision of this Agreement
shall be deemed a waiver of any other provisions hereof, nor shall any waiver in
any one instance be deemed a continuing waiver or a waiver in any other
instance. No waiver shall be binding unless executed in writing by the party to
be charged with such waiver.
6.07 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
6.08 No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article III.
6.09 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
6.10 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby,
14
<PAGE> 18
(a) such provision will be fully severable, (b) this Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof and (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom.
6.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
contract executed and performed in such state, including, without limitation,
Section 5-1401 of the New York General Obligations Law.
6.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
15
<PAGE> 19
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party as of the date first
above written.
TCR HOLDING CORPORATION
By:
----------------------------------
Name:
Title:
TRANSAMERICAN REFINING CORPORATION
By:
----------------------------------
Name:
Title:
16
<PAGE> 20
TARC/TCR HOLDING
ASSET TRANSFER AGREEMENT
SCHEDULE A
ASSUMED LIABILITIES
1. $150 million aggregate principal amount of the 15% Senior
Secured Notes due 2003 ("Notes") issued pursuant to the Indenture (the
"Indenture") dated as of December 15, 1998, between TransAmerican Refining
Corporation and The Bank of New York, as Trustee, as secured by (a) an Act of
Mortgage, Assignment of Leases and Rents, Security Agreement and Financing
Statement dated as of December 14, 1998, by TransAmerican Refining Corporation,
as mortgagor, in favor of The Bank of New York, as Trustee, as mortgagee,
recorded in the records of the Clerk of Court, St. Charles Parish, Louisiana,
Entry No. 227767, MOB _________, folio _________, COB ________, folio
__________; and (b) a Security Agreement (the "Security Agreement"), dated as of
December 15, 1998 by TransAmerican Refining Corporation, in favor of The Bank of
New York, as Trustee, together with the financing statement(s) filed in
connection therewith.
2. The Indenture.
3. As defined in the Indenture:
(a) The Notes;
(b) The Project Agreements;
(c) The Construction Collateral and Disbursement
Agreement; and
(d) The Registration Rights Agreement.
4. Real Property Lease Obligations. All obligations of
TARC under the leases and subleases listed on
Schedule D.
5. Personal Property Lease Obligations. All obligations of
TARC under the leases and subleases listed on
Schedule E.
6. Indebtedness. All obligations of TARC under the
Indebtedness listed under the heading "Assumed" on
Schedule F.
7. Accounts Payable. All obligations of TARC under (i) the
accounts payable listed on Schedule G to the extent
such accounts payable were incurred in the ordinary
course of Business, and to the extent incurred as part
of development of Phase I or Phase II of the Refinery,
were incurred in accordance with the Plans (as defined
in the Securities Purchase Agreement) and (ii) those
additional accrued liabilities of TARC listed under the
heading "Assumed" on Schedule G.
A-1
<PAGE> 21
8. Contracts and Licenses. All obligations of TARC under
(i) the Contracts listed under the heading "Assumed
Contracts" on Schedule H and (ii) all of the Licenses
listed on Schedule H.
9. Legal Proceedings. All obligations of TARC arising out
of the Actions and Proceedings listed on Schedule I,
other than TARC and JRS v. Bill Elder, WWL-TV, A.H.
Belo Corp.
10. Liens. Those Liens listed under the heading "Assumed"
on Schedule J.
11. The other Transaction Documents, as defined in the
Securities Purchase Agreement.
Liabilities not otherwise assumed or specifically related
hereunder up to $500, plus additional liabilities incurred in the ordinary
course of business not to exceed $1.0 million in the aggregate.
Penalty interest on TARC sub debt (so long as an exchange
offer is consummated within 2 months (or 3 months if the exchange offer
Registration Statement is reviewed by the Securities and Exchange Commission)).
A-2
<PAGE> 22
SCHEDULE B
GENERAL ASSIGNMENT AND BILL OF SALE
THIS GENERAL ASSIGNMENT AND BILL OF SALE is entered into this
15th day of December, 1998 by and between TCR Holding Corporation, a Delaware
corporation ("Purchaser"), and TransAmerican Refining Corporation, a Texas
corporation ("Seller").
WHEREAS, Purchaser and Seller have entered into an Asset
Transfer Agreement, dated as of December 15, 1998 (the "Asset Transfer
Agreement"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Asset Transfer Agreement), pursuant to which Seller has
agreed to transfer, convey, assign and deliver to Purchaser and Purchaser has
agreed to purchase from Seller substantially all of the Assets and Properties of
Seller, and Purchaser has agreed, in partial consideration therefor, to assume
certain obligations in connection therewith by executing an Assumption Agreement
of even date herewith;
WHEREAS, Seller desires to transfer and assign to Purchaser
the Assets and Properties of Seller pursuant to Section 1.04 of the Asset
Transfer Agreement and Purchaser desires to accept the transfer, conveyance,
assignment and delivery thereof;
NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, Seller hereby irrevocably
transfers, conveys, assigns and delivers to Purchaser all of Seller's right,
title and interest in, to and under all of the Assets of Seller, other than the
Retained Assets listed in Schedule K to the Asset Transfer Agreement, as the
same shall exist on the date hereof TO HAVE AND TO HOLD the same unto Purchaser,
its successors and assigns, forever.
Purchaser hereby accepts the transfer, conveyance, assignment
and delivery of the Assets.
At any time or from time to time after the date hereof, at
Purchaser's request and without further consideration, Seller shall execute and
deliver to Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as Purchaser may reasonably deem necessary or desirable in
order more effectively to transfer, convey and assign to Purchaser, and to
confirm Purchaser's title to, all of the Assets, and, to the full extent
permitted by Law, to put Purchaser in actual possession and operating control of
the Assets and to assist Purchaser in exercising all rights with respect
thereto.
Seller hereby constitutes and appoints Purchaser the true and
lawful attorney of Seller, with full power of substitution, in the name of
Seller or Purchaser, but on behalf of and for the benefit of Purchaser: (i) to
demand and receive from time to time any and all of the Assets and to make
endorsements and give receipts and releases for and in respect of the same
<PAGE> 23
and any part thereof; (ii) to institute, prosecute, compromise and settle any
and all Actions or Proceedings that Purchaser may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Assets; (iii) to defend or compromise any or all Actions or Proceedings in
respect of any of the Assets; and (iv) to do all such acts and things in
relation to the matters set forth in the preceding clauses (i) through (iii) as
Purchaser shall deem desirable. Seller hereby acknowledges that the appointment
hereby made and the powers hereby granted are coupled with an interest and are
not and shall not be revocable by it in any manner or for any reason.
This General Assignment and Bill of Sale may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
This General Assignment and Bill of Sale shall be governed by
and construed in accordance with the laws of the State of New York applicable to
a contract executed and performed in such State without giving effect to the
conflicts of laws principles thereof, except that if it is necessary in any
other jurisdiction to have the law of such other jurisdiction govern this
General Assignment and Bill of Sale in order for this General Assignment and
Bill of Sale to be effective in any respect, then the laws of such other
jurisdiction shall govern this General Assignment and Bill of Sale to such
extent.
IN WITNESS WHEREOF, the undersigned have caused their duly
authorized officers to execute this General Assignment and Bill of Sale on the
day and year first above written.
TCR HOLDING CORPORATION
By:
----------------------------------
Name:
Title:
TRANSAMERICAN REFINING CORPORATION
By:
----------------------------------
Name:
Title:
<PAGE> 24
SCHEDULE C
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT is entered into this 15th day of
December, 1998 by and between TCR Holding Corporation, a Delaware corporation
("Purchaser"), and TransAmerican Refining Corporation, a Texas corporation
("Seller").
WHEREAS, Purchaser and Seller have entered into an Asset
Transfer Agreement, dated as of December 15, 1998 (the "Asset Transfer
Agreement"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Asset Transfer Agreement), pursuant to which Seller has
agreed to sell, transfer, convey, assign and deliver to Purchaser and Purchaser
has agreed to purchase from Seller substantially all of the Assets and
Properties of Seller, and Purchaser has agreed, in partial consideration
therefor, to assume certain obligations in connection therewith by executing
this Assumption Agreement;
WHEREAS, pursuant to Section 1.04 of the Asset Transfer
Agreement, Purchaser is required to execute and deliver to Seller this
Assumption Agreement whereby Purchaser assumes such obligations;
NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, Purchaser hereby undertakes
and agrees from and after the date hereof, subject to the limitations contained
herein, to assume and to pay, perform and discharge when due the Assumed
Liabilities.
Nothing contained herein shall require Purchaser to pay or
discharge any debts or obligations expressly assumed hereby so long as Purchaser
shall in good faith contest or cause to be contested the amount or validity
thereof.
Other than as specifically stated above or in the Asset
Transfer Agreement, Purchaser assumes no debt, liability or obligation of
Seller, including without limitation the Retained Liabilities, by this
Assumption Agreement, and it is expressly understood and agreed that all debts,
liabilities and obligations not assumed hereby by Purchaser shall remain the
sole obligation of Seller, its successors and assigns.
No Person other than Seller, its successors and assigns shall
have any rights under this Assumption Agreement or the provisions contained
herein.
This Assumption Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
This Assumption Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to a contract
executed and performed in such
<PAGE> 25
State without giving effect to the conflicts of laws principles thereof, except
that if it is necessary in any other jurisdiction to have the law of such other
jurisdiction govern this Assumption Agreement in order for this Assumption
Agreement to be effective in any respect, then the laws of such other
jurisdiction shall govern this Assumption Agreement to such extent.
IN WITNESS WHEREOF, the undersigned have caused their duly
authorized officers to execute this Assumption Agreement on the day and year
first above written.
TCR HOLDING CORPORATION
By:
----------------------------------
Name:
Title:
TRANSAMERICAN REFINING CORPORATION
By:
----------------------------------
Name:
Title:
<PAGE> 26
Omitted Schedules
-----------------
Pursuant to Item 601(b)(2) of Regulation S-K, the Company has omitted
from this filing certain schedules to Exhibit 2.2. The Company agrees to
furnish supplementally copies of any such omitted schedules to the Commission
upon request. The contents of the omitted schedules are described below:
Schedule D -- Real Property Leases
Schedule E -- Personal Property Leases
Schedule F -- Indebtedness
Schedule G -- Accounts Payable as of December 2, 1998
Schedule H -- Contracts and Licenses
Schedule I -- Legal Proceedings
Schedule J -- Liens
Schedule K -- Retained Assets
Schedule L -- Retained Liabilities
Schedule M -- Current Tax Filings and Audits
<PAGE> 1
EXHIBIT 2.3
ASSET TRANSFER AGREEMENT
by and between
TCR HOLDING CORPORATION
(a Delaware Corporation)
and
TRANSCONTINENTAL REFINING CORPORATION
(A Delaware Corporation)
<PAGE> 2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
<TABLE>
<CAPTION>
Page
No.
----
<S> <C>
ARTICLE I TRANSFER OF ASSETS AND CLOSING......................................1
1.01 ASSETS............................................................1
1.02 LIABILITIES.......................................................2
1.03 CLOSING...........................................................2
1.04 FURTHER ASSURANCES; POST-CLOSING COOPERATION......................2
1.05 THIRD-PARTY CONSENTS..............................................3
1.06 AGREED VALUE......................................................3
ARTICLE II INDEMNIFICATION....................................................4
2.01 INDEMNIFICATION...................................................4
2.02 SURVIVAL OF INDEMNITY AND REPRESENTATIONS AND WARRANTIES..........4
2.03 INDEMNIFICATION PROCEDURES........................................4
ARTICLE III TAX...............................................................5
3.01 TRANSFER TAXES....................................................5
3.02 TAX COOPERATION...................................................5
3.03 TAX INDEMNIFICATION...............................................6
ARTICLE IV DEFINITIONS........................................................6
4.01 DEFINITIONS.......................................................6
ARTICLE V MISCELLANEOUS.......................................................9
5.01 NOTICES...........................................................9
5.02 BULK SALES ACT...................................................10
5.03 WAIVER...........................................................10
5.04 ENTIRE AGREEMENT.................................................10
5.05 EXPENSES.........................................................10
5.06 WAIVER...........................................................10
5.07 AMENDMENT........................................................10
5.08 NO THIRD PARTY BENEFICIARY.......................................11
5.09 HEADINGS.........................................................11
5.10 INVALID PROVISIONS...............................................11
5.11 GOVERNING LAW....................................................11
5.12 COUNTERPARTS.....................................................11
</TABLE>
SCHEDULE A Retained Liabilities
SCHEDULE B General Assignment and Bill of Sale
SCHEDULE C Assumption Agreement
SCHEDULE D Retained Assets
<PAGE> 3
This ASSET TRANSFER AGREEMENT dated as of December 15, 1998 is
made and entered into by and between TCR Holding Corporation, a Delaware
corporation ("TCR Holding"), and TransContinental Refining Corporation, a
Delaware corporation ("TransContinental"). Capitalized terms not otherwise
defined herein have the meanings set forth in Section 4.01 hereof.
WHEREAS, TransAmerican Energy Corporation, a Delaware
Corporation ("TEC"), TransAmerican Refining Corporation, a Texas corporation
("TARC"), TCR Holding and TransContinental have entered into a Securities
Purchase Agreement dated December 10, 1998 with Jefferies & Company, Inc., as
amended and restated by and among TEC, TARC, TCR Holding, TransContinental, TCW
Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P, TCW Shared
Opportunity Fund III, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared
Opportunity Fund IIB, LLC, and Jefferies & Company, Inc. on December 15, 1998
(the "Securities Purchase Agreement");
WHEREAS, it is a condition to the consummation of the
transactions under the Securities Purchase Agreement that TARC transfer and
assign to TCR Holding, and that TCR Holding acquire from TARC substantially all
of the assets of TARC and that TCR Holding assume certain liabilities of TARC
pursuant to an Asset Transfer Agreement of even date herewith between TARC and
TCR Holding (the "TARC Asset Transfer Agreement");
WHEREAS, it is a condition to the consummation of the
transactions under the Securities Purchase Agreement that TCR Holding transfer
and assign to TransContinental, and that TransContinental acquire from TCR
Holding substantially all of the assets of TCR Holding acquired pursuant to the
TARC Asset Transfer Agreement and that TransContinental assume certain
liabilities of TCR Holding assumed pursuant to the TARC Asset Transfer
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND CLOSING
1.01 Assets.
(a) Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, TCR Holding will transfer, convey,
assign and deliver to TransContinental, and TransContinental will acquire, at
the Closing, all of TCR Holding's right, title and interest in, to and under the
Assets and Properties of TCR Holding, except as otherwise provided in Sections
1.01(b) and 1.02, as the same shall exist on the Closing Date (the "Assets").
(b) Retained Assets. Notwithstanding anything in this
Agreement to the contrary, the Retained Assets shall be excluded from and shall
not constitute Assets and TransContinental shall have neither any rights nor any
obligations with respect thereto.
<PAGE> 4
1.02 Liabilities. In consideration of the transfer,
conveyance, assignment and delivery of the Assets pursuant to this Agreement, on
the terms and subject to the conditions set forth in this Agreement, at the
Closing, TransContinental will assume and will agree to pay, perform and
discharge when due all of the Liabilities of TCR Holding (the "Assumed
Liabilities") other than those liabilities listed in Schedule A hereto (the
"Retained Liabilities").
1.03 Closing. The Closing will take place on the Closing Date
at the offices of Milbank, Tweed, Hadley & McCloy, 350 Park Avenue, New York,
New York. On the Closing Date, (i) TCR Holding will assign and transfer to
TransContinental all of its right, title and interest in and to the Assets (free
and clear of all Liens, other than Permitted Liens) by delivery of (A) a General
Assignment and Bill of Sale in the form of Schedule B hereto (the "General
Assignment), duly executed by TCR Holding, (B) an assignment of Intellectual
Property in form and substance acceptable to TransContinental, (C) general
warranty deeds in proper statutory form for recording and otherwise in form and
substance acceptable to TransContinental conveying title to the Assets comprised
of real property and all of the rights arising out of the ownership thereof or
appurtenant thereto, together with all buildings, structures, facilities,
fixtures and other improvements thereto, and (D) such other good and sufficient
instruments of conveyance, assignment and transfer, in form and substance
acceptable to TransContinental and its counsel, as shall be effective to vest in
TransContinental good title to the Assets (the General Assignment and the other
instruments referred to in clauses (B),(C) and (D) being collectively referred
to herein as the "Assignment Instruments") and (ii) TransContinental will assume
the Assumed Liabilities pursuant to (X) an Assumption Agreement in the form of
Schedule C hereto (the "Assumption Agreement"), duly executed by
TransContinental, and (Y) such other instruments of assumption as shall be
effective to cause TransContinental to assume the Assumed Liabilities as and to
the extent provided in Section 1.02 (the Assumption Agreement and such other
instruments referred to in clause (Y) being collectively referred to herein as
the "Assumption Instruments").
1.04 Further Assurances; Post-Closing Cooperation. At any time
or from time to time after the Closing, at TransContinental's request and
without further consideration, TCR Holding shall execute and deliver to
TransContinental such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as TransContinental may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to
TransContinental, and to confirm TransContinental's title to, all of the Assets,
and, to the full extent permitted by Law, to put TransContinental in actual
possession and operating control of the and the Assets and to assist
TransContinental in exercising all rights with respect thereto, and otherwise to
cause TCR Holding to fulfill its obligations under this Agreement.
<PAGE> 5
(a) Effective on the Closing Date, TCR Holding hereby
constitutes and appoints TransContinental the true and lawful attorney of TCR
Holding, with full power of substitution, in the name of TCR Holding or
TransContinental, but on behalf of TCR Holding and for the benefit of
TransContinental: (i) to demand and receive from time to time any and all of the
Assets and to make endorsements and give receipts and releases for and in
respect of the same and any part thereof; (ii) to institute, prosecute,
compromise and settle any and all Actions or Proceedings that TransContinental
may deem proper in order to collect, assert or enforce any claim, right or title
of any kind in or to the Assets; (iii) to defend or compromise any or all
Actions or Proceedings in respect of any of the Assets; and (iv) to do all such
acts and things in relation to the matters set forth in the preceding clauses
(i) through (iii) as TransContinental shall deem desirable. TCR Holding hereby
acknowledges that the appointment hereby made and the powers hereby granted are
coupled with an interest and are not and shall not be revocable by it in any
manner or for any reason. TCR Holding shall execute and deliver to
TransContinental at the Closing an acknowledged power of attorney to the
foregoing effect.
(b) Following the Closing, TCR Holding will afford
TransContinental, its counsel and accountants access to the books, records and
other data relating to the Assets in TCR Holding's possession, if any, with
respect to periods prior to the Closing and the right to make copies and
extracts therefrom. Further, TCR Holding agrees for a period extending six (6)
years after the Closing Date not to destroy or otherwise dispose of any books,
records and other data without first offering in writing to surrender such
books, records and other data to TransContinental and TransContinental shall not
have agreed to take possession thereof within thirty (30) days of such offer.
1.05 Third-Party Consents. To the extent that any Contract is
not assignable without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment thereof if such assignment
or attempted assignment would constitute a breach of or a default under any
Contract either constituting or governing such Contract. TCR Holding shall use
its best efforts to obtain the consent of such other party to the assignment of
any such Contract in all cases in which such consent is or may be required for
such assignment. If any such consent shall not be obtained, TCR Holding shall
cooperate with TransContinental in any arrangement designed to provide
TransContinental with the benefits intended to be assigned to TransContinental
under or pursuant to such Contract, including enforcement at the cost and for
the account of TCR Holding of any and all rights of TCR Holding against the
other party thereto arising out of the breach or cancellation thereof by such
other party or otherwise.
1.06 Agreed Value. The parties agree that for purposes of all
federal and state income tax filings, the agreed upon value of the Assets will
be $1,100,000,000 as of October 31, 1998.
<PAGE> 6
ARTICLE II
INDEMNIFICATION
2.01 Indemnification.
(a) TCR Holding shall indemnify TransContinental, its
officers, directors, Affiliates, agents and representatives and their respective
successors and assigns (collectively, the "TransContinental Parties") in respect
of, and hold the TransContinental Parties harmless from and against, any and all
Losses suffered, incurred or sustained, as suffered, incurred or sustained by
any of them or to which any of them becomes subject, resulting from, arising out
of or relating to (i) any breach of representation or warranty or nonfulfillment
of or failure to perform any agreement on the part of TCR Holding contained in
this Agreement or (ii) the Retained Assets or any Retained Liability.
(b) TransContinental shall indemnify TCR Holding, its
officers, directors, Affiliates, agents and representatives and their respective
successors and assigns (collectively, the "TCR Parties") in respect of, and
hold TCR Holding harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to the Assets or the Assumed
Liabilities except to the extent that any such loss arises out of any Loss
giving rise to indemnification under Section 2.01(a).
2.02 Survival of Indemnity and Representations and Warranties.
The indemnity provisions contained in this Article II shall survive indefinitely
regardless of (i) any investigation made at any time by or on behalf of any
TransContinental Party, (ii) any termination of this Agreement or the Securities
Purchase Agreement or (iii) acceptance of the Assets by TransContinental.
2.03 Indemnification Procedures. An Indemnified Party shall
give the party obligated to provide indemnification under Section 2.01 (the
"Indemnified Party") notice of any matter which an Indemnified Party has
determined has given or could give rise to a right of indemnification under this
Agreement, within 90 days of such determination, stating the amount of the Loss,
if known, and method of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises; provided, however, that the failure to provide such notice
shall not release the Indemnifying Party from any of its obligations under this
Article II except to the extent the Indemnifying Party is materially prejudiced
by such failure and shall not relieve the Indemnifying Party from any other
obligation or liability that it may have to any Indemnified Party otherwise than
under this Article II. The obligations and Liabilities of an Indemnifying Party
under this Article II with respect to Losses arising from claims of any third
party which are subject to the indemnification provided for in this Article II
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: if an Indemnified Party shall receive notice of
any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim within 30 days of the receipt by the
Indemnified Party of such notice; provided, however, that the failure to provide
such notice shall
<PAGE> 7
not release the Indemnifying Party from any of its obligations under this
Article II except to the extent the Indemnifying Party is materially prejudiced
by such failure and shall not relieve the Indemnifying Party from any other
obligation or liability that it may have to any Indemnified Party otherwise than
under this Article II. If the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Indemnifying Party shall be
entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its intention to
do so to the Indemnified Party; provided, however, that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the judgment of the Indemnified Party, in its sole and absolute
discretion, for the same counsel to represent both the Indemnified Party and the
Indemnifying Party, then the Indemnified Party shall be entitled to retain its
own counsel, in each jurisdiction for which the Indemnified Party determines
counsel is required, at the expense of the Indemnifying Party; provided further,
that in no event shall the Indemnifying Party be obligated to pay the fees and
expenses of more than one independent counsel for all Indemnified Parties in
each such jurisdiction. In the event the Indemnifying Party exercises the right
to undertake any such defense against any such Third Party Claim as provided
above, the Indemnified Party shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying
Party's expense, all witnesses, pertinent records, materials and information in
the Indemnified Party's possession or under the Indemnified Party's control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, at the Indemnifying Party's expense, all such witnesses,
records, materials and information in the Indemnifying Party's possession or
under the Indemnifying Party's control relating thereto as is reasonably
required by the Indemnified Party. No such Third Party Claim may be settled
without the prior written consent of each Indemnified Party subject to such
Third Party Claim unless such settlement (i) includes an unconditional release
of both the Indemnifying Party and each Indemnified Party from all liability
arising out of such Third Party claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
either the Indemnifying Party or any Indemnified Party.
ARTICLE III
TAX
3.01 Transfer Taxes. TransContinental shall pay all Transfer
Taxes arising out of or in connection with the transactions effected pursuant to
this Agreement, and shall indemnify, defend, and hold harmless TCR Holding on an
after-Tax basis with respect to such Transfer Taxes. TransContinental shall file
all necessary documentation and Tax Returns with respect to such Transfer Taxes.
3.02 Tax Cooperation. After the Closing Date, TCR Holding and
the affiliated group of which it is a member will cooperate in the preparation
of all Tax Returns, will provide any records and other information that TRC
Holding requests, will provide access to, and the cooperation of, its auditor,
and will cooperate with TRC Holding in connection with any Tax investigation,
audit or other proceeding.
<PAGE> 8
3.03 Tax Indemnification. After the Closing Date, TCR Holding
will indemnify and hold harmless TransContinental from and against any and all
claims, actions, causes of action, liabilities, losses, damages, and reasonable
out-of-pocket expenses and costs resulting from, arising out of or relating to,
all Taxes imposed on TCR Holding or any member of the affiliated group of which
TCR Holding is a member, including Taxes imposed on TCR Holding or any such
member under Treas. Reg. Section 1.1502-6 or any state or local counterpart
thereto or as a result of any contractual agreements between TCR Holding or any
member of the affiliated group of which TCR Holding is a member and any other
persons,
ARTICLE IV
DEFINITIONS
4.01 Definitions.
(a) Defined Terms. As used in this Agreement, the following
defined terms have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that (i) directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified or (ii) is an employee, officer,
director or stockholder of such person. For purposes of this definition, control
of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise and, in any event and without limitation of the previous sentence, any
Person owning ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.
"Agreement" means this Asset Transfer Agreement and the
Schedules hereto as the same shall be amended from time to time.
"Assets" has the meaning set forth in Section 1.01(a).
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
<PAGE> 9
"Assignment Instruments" has the meaning set forth in
Section 1.03.
"Assumed Liabilities" has the meaning set forth in
Section 1.02.
"Assumption Agreement" has the meaning set forth in
Section 1.03.
"Assumption Instruments" has the meaning set forth in
Section 1.03.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in New York or California are authorized or obligated
to close.
"Closing" means the closing of the transactions contemplated
by Section 1.03.
"Closing Date" means December 15, 1998 or such other date as
the parties hereto may mutually agree.
"Code" means the Internal Revenue Code of 1986.
"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"General Assignment" has the meaning set forth in
Section 1.03.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" has the meaning set forth in Section 2.07.
"Indemnifying Party" has the meaning set forth in
Section 2.07.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights.
<PAGE> 10
"Investment Assets" means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase and
securities convertible into or exchangeable for other securities), interests in
joint ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by TCR Holding
(other than trade receivables generated in the ordinary course of business of
the TCR Holding).
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment).
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Person" means any natural person, corporation, limited
liability company, general partnership, limited partnership, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.
"Retained Assets" means those assets of TCR Holding listed in
Schedule D hereto.
"Retained Liabilities" has the meaning set forth in
Section 1.02.
"Securities Purchase Agreement" has the meaning set forth in
the recitals to this Agreement.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not and any expenses incurred
in connection with the determination, settlement or litigation of any Tax
liability.
"Tax Return" means a report, return or other information
(including any amendments) required to be supplied to a governmental entity by
(i) TCR Holding or (ii) any member of the affiliated group of which TCR Holding
is a member with respect to Taxes that relate to the Assets.
<PAGE> 11
"Third Party Claim" has the meaning ascribed to it in
Section 2.03.
"TransContinental Parties" has the meaning set forth in
Section 2.01.
"Transfer Taxes" means all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees.
(b) Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; and
(iv) the terms "Article" or "Section" refer to the specified Article or Section
of this Agreement. Whenever this Agreement refers to a number of days, such
number shall refer to calendar days unless Business Days are specified.
ARTICLE V
MISCELLANEOUS
5.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to TransContinental, to:
14902 River Road
New Sarpy, LA 70078
Attn: Mr. Glenn McGinnis
with copies to:
Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, California 90025
Attention: Nicholas W. Tell
Milbank Tweed, Hadley & McCoy
601 South Figueroa Street, 30th Floor
Los Angeles, California 90017
Attention: Kenneth J. Baronsky
<PAGE> 12
If to TCR Holding, to:
14902 River Road
New Sarpy, LA 70078
Attn: Glenn McGinnis
with copies to:
Trust Company of the West
11100 Santa Monica Boulevard, Suite 2000
Los Angeles, California 90025
Attention: Nicholas W. Tell
Milbank, Tweed, Hadley & McCoy
601 South Figueroa Street, 30th Floor
Los Angeles, California 90017
Attention: Kenneth J. Baronsky
5.02 Bulk Sales Act. The parties hereby waive compliance with
the bulk sales act or comparable statutory provisions of each applicable
jurisdiction.
5.03 Waiver. TCR Holding waives any and all vendor's privilege
to which TCR Holding is entitled and further waives any right to rescind or
dissolve the transfer of the Assets conveyed to TransContinental on account of
the nonfulfillment of any of TransContinental's obligations hereunder, to which
TCR Holding might be entitled pursuant to La. Civ. Code Arts. 2561-2564 or
otherwise and further warrants that third parties may deal with
TransContinental, free and clear of any express or implied resolutely condition
or any express or implied right of recession.
5.04 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties with respect thereto.
5.05 Expenses. Except as set forth herein, each party will pay
its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated hereby
and thereby.
5.06 Waiver. No waiver of any provision of this Agreement
shall be deemed a waiver of any other provisions hereof, nor shall any waiver in
any one instance be deemed a continuing waiver or a waiver in any other
instance. No waiver shall be binding unless executed in writing by the party to
be charged with such waiver.
5.07 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
<PAGE> 13
5.08 No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article II.
5.09 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
5.10 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
5.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
contract executed and performed in such state, including, without limitation,
ss.5-1401 of the New York General Obligations Law.
5.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party as of the date first above written.
TCR HOLDING CORPORATION
By:
----------------------------------------
Name:
Title:
TRANSCONTINENTAL REFINING CORPORATION
By:
----------------------------------------
Name:
Title:
<PAGE> 15
SCHEDULE A
RETAINED LIABILITIES
1. TCR Holding's obligations under this Agreement.
2. TCR Holding's obligations under the TEC Swingline Note (as defined in the
Securities Purchase Agreement)
<PAGE> 16
SCHEDULE B
GENERAL ASSIGNMENT AND BILL OF SALE
THIS GENERAL ASSIGNMENT AND BILL OF SALE is entered into this
15th day of December, 1998 by and between, TransContinental Refining Corporation
a Delaware corporation ("Purchaser"), and TCR Holding Corporation, a Delaware
corporation ("Seller").
WHEREAS, Purchaser and Seller have entered into an Asset
Transfer Agreement, dated as of December 15, 1998 (the "Asset Transfer
Agreement"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Asset Transfer Agreement), pursuant to which Seller has
agreed to transfer, convey, assign and deliver to Purchaser and Purchaser has
agreed to purchase from Seller substantially all of the Assets and Properties of
Seller, and Purchaser has agreed, in partial consideration therefor, to assume
certain obligations in connection therewith by executing an Assumption Agreement
of even date herewith;
WHEREAS, Seller desires to transfer and assign to Purchaser
the Assets and Properties of Seller pursuant to Section 1.04 of the Asset
Transfer Agreement and Purchaser desires to accept the transfer, conveyance,
assignment and delivery thereof;
NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, Seller hereby irrevocably
transfers, conveys, assigns and delivers to Purchaser all of Seller's right,
title and interest in, to and under all of the Assets of Seller, other than the
Retained Assets listed in Schedule G to the Agreement, as the same shall exist
on the date hereof TO HAVE AND TO HOLD the same unto Purchaser, its successors
and assigns, forever.
Purchaser hereby accepts the transfer, conveyance, assignment
and delivery of the Assets.
At any time or from time to time after the date hereof, at
Purchaser's request and without further consideration, Seller shall execute and
deliver to Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as Purchaser may reasonably deem necessary or desirable in
order more effectively to transfer, convey and assign to Purchaser, and to
confirm Purchaser's title to, all of the Assets, and, to the full extent
permitted by Law, to put Purchaser in actual possession and operating control of
the Assets and to assist Purchaser in exercising all rights with respect
thereto.
Seller hereby constitutes and appoints Purchaser the true and
lawful attorney of Seller, with full power of substitution, in the name of
Seller or Purchaser, but on behalf of and for the benefit of Purchaser: (i) to
demand and receive from time to time any and all of the Assets and to make
endorsements and give receipts and releases for and in respect of the same and
any part thereof; (ii) to institute, prosecute, compromise and settle any and
all Actions or
<PAGE> 17
2
Proceedings that Purchaser may deem proper in order to collect,
assert or enforce any claim, right or title of any kind in or to the Assets;
(iii) to defend or compromise any or all Actions or Proceedings in respect of
any of the Assets; and (iv) to do all such acts and things in relation to the
matters set forth in the preceding clauses (i) through (iii) as Purchaser shall
deem desirable. Seller hereby acknowledges that the appointment hereby made and
the powers hereby granted are coupled with an interest and are not and shall not
be revocable by it in any manner or for any reason.
This General Assignment and Bill of Sale may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
This General Assignment and Bill of Sale shall be governed by
and construed in accordance with the laws of the State of New York applicable to
a contract executed and performed in such State without giving effect to the
conflicts of laws principles thereof, except that if it is necessary in any
other jurisdiction to have the law of such other jurisdiction govern this
General Assignment and Bill of Sale in order for this General Assignment and
Bill of Sale to be effective in any respect, then the laws of such other
jurisdiction shall govern this General Assignment and Bill of Sale to such
extent.
IN WITNESS WHEREOF, the undersigned have caused their duly
authorized officers to execute this General Assignment and Bill of Sale on the
day and year first above written.
TCR HOLDING CORPORATION
By:
-----------------------------------------
Name:
Title:
TRANSCONTINENTAL REFINING CORPORATION
By:
-----------------------------------------
Name:
Title:
<PAGE> 18
SCHEDULE C
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT is entered into this 15th day of
December, 1998 by and between TransContinental Refining Corporation, a Delaware
corporation ("Purchaser"), and TCR Holding Company, a Delaware corporation
("Seller").
WHEREAS, Purchaser and Seller have entered into an Asset
Transfer Agreement, dated as of December 15, 1998 (the "Asset Transfer
Agreement"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Asset Transfer Agreement), pursuant to which Seller has
agreed to sell, transfer, convey, assign and deliver to Purchaser and Purchaser
has agreed to purchase from Seller substantially all of the Assets and
Properties of Seller, and Purchaser has agreed, in partial consideration
therefor, to assume certain obligations in connection therewith by executing
this Assumption Agreement;
WHEREAS, pursuant to Section 1.04 of the Asset Transfer
Agreement, Purchaser is required to execute and deliver to Seller this Agreement
whereby Purchaser assumes such obligations;
NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, Purchaser hereby undertakes
and agrees from and after the date hereof, subject to the limitations contained
herein, to assume and to pay, perform and discharge when due the Assumed
Liabilities.
Nothing contained herein shall require Purchaser to pay or
discharge any debts or obligations expressly assumed hereby so long as Purchaser
shall in good faith contest or cause to be contested the amount or validity
thereof.
Other than as specifically stated above or in the Asset
Transfer Agreement, Purchaser assumes no debt, liability or obligation of
Seller, including without limitation the Retained Liabilities, by this
Assumption Agreement, and it is expressly understood and agreed that all debts,
liabilities and obligations not assumed hereby by Purchaser shall remain the
sole obligation of Seller, its successors and assigns.
No Person other than Seller, its successors and assigns shall
have any rights under this Assumption Agreement or the provisions contained
herein.
This Assumption Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
<PAGE> 19
-2-
This Assumption Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to a contract
executed and performed in such State without giving effect to the conflicts of
laws principles thereof, except that if it is necessary in any other
jurisdiction to have the law of such other jurisdiction govern this Assumption
Agreement in order for this Assumption Agreement to be effective in any respect,
then the laws of such other jurisdiction shall govern this Assumption Agreement
to such extent.
IN WITNESS WHEREOF, the undersigned have caused their duly
authorized officers to execute this Assumption Agreement on the day and year
first above written.
TCR HOLDING CORPORATION
By:
-----------------------------------------
Name:
Title:
TRANSCONTINENTAL REFINING CORPORATION
By:
-----------------------------------------
Name:
Title:
<PAGE> 20
SCHEDULE D
RETAINED ASSETS
1. The corporate minute books and stock ledger of TCR Holding;
2. TCR Holding's rights under this Agreement.
3. Capital Stock of TransContinental held by TCR Holding on the Closing
Date;
4. Rights of TCR Holding under the Swingline Note (as defined in the
Securities Purchase Agreement); and
5. $1,300,000 in cash.
6. D&O Insurance Policy.
